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Retailing
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Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store or kiosk, or by post, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses.
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Encyclopedia
Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store or kiosk, or by post, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy.
Shops may be on residential streets, shopping streets with few or no houses, or in a shopping center or mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, also referred to as B2C type of e-commerce, and mail order are forms of non-shop retailing.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.
Retail pricing
The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailers cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.
In Western countries, retail prices are often called psychological prices or odd prices.
Often prices are fixed and displayed on signs or labels. Alternatively, there can be price discrimination for a variety of reasons, where the retailer charges higher prices to some customers and lower prices to others. For example, a customer may have to pay more if the seller determines that he or she is willing to. The retailer may conclude this due to the customer's wealth, carelessness, lack of knowledge, or eagerness to buy. Another example is the practice of discounting for youths or students.
Etymology
Retail comes from the French word which refers to "cutting off, clip and divide" in terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring". Like the French, the word retail in both Dutch and German (detailhandel and Einzelhandel respectively) also refer to sale of small quantities of items.
Transfer mechanism
There are several ways in which consumers can receive goods from a retailer:
- Counter service, where goods are out of reach of buyers, and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. It was common before the 1900s in the United States, and is more common in certain countries.
- Delivery (commerce), where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalog was invented in 1744 and common in the late 1800s and early 1900s. Ordering by telephone is now common, either from a catalog, newspaper or television advertisement, or local restaurant menu for immediate service (especially for pizza delivery). Direct marketing (including telemarketing) and television shopping channels are also used to generate telephone orders. Online shopping started gaining significant market share in developed countries in the 2000s.
- Door-to-door sales where the salesperson sometimes travels with the goods for sale.
- Self-service, where goods may be handled and examined prior to purchase, has become more common since the 1920s.
Building types
A market isa physical location where buyers and sellers converge. Usually this is done in town squares, sidewalks or designated streets and may involve the construction of temporary structures (market stalls).
Markets are contrasted with shop or store trading, where a retailer has a permanent, dedicated building.
Buildings for retail have changed considerably over time. Market halls were constructed in the Middle Ages, which were essentially just covered marketplaces. The first shops in the modern sense used to deal with just one type of article, and usually adjoined the producer (baker, tailor, cobbler). In the U.S., retailers often provided boardwalks in front of their stores to protect customers from the mud. In the 19th century, in France, arcades were invented, which were a street of several different shops, roofed over. Counters, each dealing with a different kind of article, were invented; it was called a department store. One of the novelties of the department store was the introduction of fixed prices, making haggling unnecessary, and browsing more enjoyable. This is commonly considered the birth of consumerism. In cities, these were multi-story buildings which pioneered the escalator.
In the 1920s the first supermarket opened in the United States, heralding in a new era of retail: self-service. Around the same time the first shopping mall was constructed which incorporated elements from both the arcade and the department store. A mall consists of several department stores linked by arcades (many of whose shops are owned by the same firm under different names). The design was perfected by the Austrian architect Victor Gruen
All the stores rent their space from the mall owner. By mid-century, most of these were being developed as single enclosed, climate-controlled, projects in suburban areas. The mall has had a considerable impact on the retail structure and urban development in the United States.
In addition to the enclosed malls, there are also strip malls which are "outside" malls (in Britain they are called retail parks). These are often composed of one or more big-box stores or superstores.
Physical shops are known as brick and mortar stores in the United States, when contrasting them with online stores. Many shops are part of a chain: a number of similar shops with the same name selling the same products in different locations. The shops may be owned by one company, or there may be a franchising company that has franchising agreements with the shop owners (see also restaurant chain).
Sometimes online retailing replicates existing retail types such as online shops or virtual marketplaces such as Amazon.
Genres of retail
Some shops sell very good second-hand goods. In other cases, especially in the case of a nonprofit shop, the public donates goods to the shop to be sold (see also thrift store). In give-away shops goods can be taken for free.
There are also "consignment" shops, which are where a person can place an item in a store, and if it sells the person gives the shop owner a percentage of the sale price. The advantage of selling an item this way is that the established shop gives the item exposure to more potential buyers.
The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility like electric power.
Sales techniques
Behind the scenes at retail there is another factor at work. Corporations and independent store owners alike are always trying to get the edge on their competitors. One way to do this is to hire a merchandising solutions company to design custom store displays that will attract more customers in a certain demographic. The nation's largest retailers spend millions every year on in-store marketing programs that correspond to season and promotional changes. As products change, so will a retail landscape.
Retailers may use facing to create the look of a perfectly-stocked store even when it is not.
A destination store is one that customers will initiate a trip specifically to visit, sometimes over a large area. These stores are often used to "anchor" a shopping mall or plaza, generating foot traffic which is capitalized on by smaller retailers.
Customer service
According to the book "Discovery-Based Retail", customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment."
See also
Bibliography
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