• The selling of merchandise and certain services to the
consumer. It ordinarily involves the selling of individual
units or small lots to large numbers of customers by a
business set up for that specific purpose. In the broadest
sense, retailing can be said to have begun the first time one
item of value was bartered for another. In the more
restricted sense of a specialized, full-time commercial
activity, retailing began several thousand years ago when
peddlers first began hawking their wares and when the first
marketplaces were formed.
Retailing is also the final link between the production of a good and
the end-consumer. The
economic characteristics of the end-consumer are thus crucial to the
retailing. Typically, the end-consumer can be characterized as being:
Small – consumers that the size of a given purchase forms a small part
both of the consumer’s total expenditure and of the retailer’s total sales.
Immobile – consumers that they are often not able or willing to travel
long distances in order to purchase the appropriate product); and
Uninformed – consumers that they often do not know which products
are available where, and what prices; and they may not be able to
observe product quality in advance of purchase).
• Retailing has a tremendous impact on the economy. It
involves high annual sales and employment. As a major
source of employment retailing offers a wide range of career
opportunities including; store management, merchandising
and owning a retail business.
Consumers benefit from retailing is that, retailers perform
marketing functions that makes it possible for customers to
have access to a broad variety of products and services.
Retailing also helps to create place, time and possession
utilities. A retailer’s service also helps to enhance a product’s
Retailing in a way, is the final stage in marketing channels
for consumer products. Retailers provide the vital link
between producers and ultimate consumers.
• A business or person that sells goods to the consumer, as
opposed to a wholesaler or supplier, who normally sell their
goods to another business.
Types of Retailers
• Department Store – This type of retailer is often the most complex offering a wide
range of products and can appear as a collection of smaller retail stores managed by
one company. The department store retailers offer products at various pricing levels.
This type of retailer adds high levels of customer service by adding convenience
enabling a large variety of products to be purchased from one retailer.
• Supermarkets – Generally this type of retailer concentrates in supplying a range of
food and beverage products. However many have now diversified and supply
products from the home, fashion and electrical products markets too. Supermarkets
have significant buying power and therefore often retail goods at low prices.
• Warehouse retailers – This type of retailer is usually situated in retail or Business
Park and where premises rents are lower. This enables this type of retailer to
stock, display and retail a large variety of good at very competitive prices.
Types of Retailers
• Speciality Retailers – Specialising in specific industries or products, this type of retailer is
able to offer the customer expert knowledge and a high level of service. They also add value by
offering accessories and additional related products at the same outlet.
• E-tailer – This type of retailer enables customers to shop on-line via the internet and buy
products which are then delivered. This type of retailer is highly convenient and is able to
supply a wider geographic customer base. E-tailers often have lower rent and overheads so
offer very competitive pricing.
• Convenience Retailer – Usually located in residential areas this type of retailer offers a
limited range of products at premium prices due to the added value of convenience.
• Discount Retailer – This type of retailer offers a variety of discounted products. They offer
low prices on less fashionable branded products from a range of suppliers by reselling end of
line and returned goods at discounted prices.
• Independent Retailer
• In independent retailer is one who builds his/her business
from the ground up. From the business planning stage to
opening day, the independent retail owner does it all.
He/she may hire consultants, staff and others to assist in the
business endeavor. The opportunities are endless.
• Existing Retail Business
• Someone who inherits or buys an existing business is taking
ownership and responsibility of someone else's hard work.
The foundation has already been laid.
• Purchasing a franchise is buying the right to use a
name, product, concept and business plan. The franchisee
will receive a proven business model from an established
• Retailers may find the business model of a licensed
dealership as a mix of franchise and independent retailer.
The licensee has the right (sometimes this is exclusive) to
sell a brand of products. Unlike a franchise, the dealer can
sell a variety of brands and there generally no fees to the
licensor. Dealerships may or may not be identified as an
authorized seller or by the company's trademark.
• Network Marketing
• Multi-level marketing (MLM) or network marketing is a
business model where the selling of products depends on
the people in the network. Not only is a product being sold,
but other salespeople are being recruited to sell that same
product or product line. It's probably not a type of business
one would initially consider when discussing retail
businesses, but Amway used this model quite successfully
for many years.