Retail describes the sale of a product or service to an individual consumer for personal use. Retail transactions occur through different sales channels, such as online, in a brick-and-mortar storefront, in direct sales, or via mail. The defining feature of a retail transaction is that the end user is the buyer.
What is retail?
This selling of goods can take place in a variety of ways, such as in-store at a brick-and-mortar location, online, through direct sales or via postal services and it includes anywhere from department stores to corner convenience shops. The retailer is the shop or business that is selling the goods and the consumer is the person who purchases those goods for use.
Types of retail business
Department stores
Department stores usually have a wide selection of products on offer, from homeware to children’s toys. These large retailers often stock both products from their own range and goods from other companies under the same roof. In the UK, stores such as John Lewis and Selfridges fall under this category.
Online stores
E-commerce, otherwise known as electronic commerce, involves the selling of goods by electronic means, including on mobile devices and computers. E-commerce is a hugely popular and profitable retail business type, accounting for a whopping £2,089.6 billion in the UK as of 2022.
Convenience stores
The classic corner shop (or convenience store as it’s also known) is a staple addition to streets in every town in the UK. These small stores stock all of a consumer’s everyday essentials, from milk to biscuits. The retail merchants in convenience stores are often central members of a local community and their businesses are long-standing and loved.
Supermarkets
Supermarkets are large marketplaces that stock a large variety of products, focused primarily on food and household objects. These stores are very often chain companies with brick-and-mortar locations all around the country and sometimes even around the world. Examples of supermarkets in the UK include Asda and Tesco.
Speciality stores
This retail type focuses on offering consumers a specific product type or category that it specialises in. For example, a store offering a selection of women’s clothes would be considered a speciality retail business given the breadth of products on offer to consumers.
Retailer vs. retailing
Independent retailer- An independent retailer is an entrepreneur who builds a retail business from the ground up. They often juggle multiple roles, from buyer to salesperson to brand marketer.
Franchise- A franchise is a ready-made business. Franchises have trademarked names, product lines, and an existing business model. Retail establishments can enter into deals to become a franchisee and benefit from the franchisor’s established market position—in return for a fee.
Retail supply chain
The retail supply chain consists of four players:
- Manufacturers who produce goods
- Wholesalers or distributors who buy goods from manufacturers
- Retailers who buy goods from wholesalers
- Consumers who buy goods from retailers
1. Manufacturers
Manufacturers start the retail supply chain by transforming raw materials into finished goods. For example, a toy manufacturer might take plastic, paint, and other materials to create a line of action figures.
2. Wholesalers
Wholesalers buy goods in bulk from manufacturers at lower prices and then sell them to retailers. For instance, a book wholesaler might buy thousands of copies of a new novel from a publisher, and then distribute them to bookstores nationwide.
3. Retailers
Retailers buy goods in large quantities from wholesalers or directly from manufacturers, then sell those goods in smaller quantities to the end users. A local hardware store, for example, might buy pallets of paint from a wholesaler and then sell them individually to shoppers.
4. Consumers
The consumer is the end of the retail supply chain. They buy goods from the retailer in small quantities to satisfy personal needs or wants. Consumer retail purchases can be anything—from buying a snack at a convenience store to hiring a landscaping team for your backyard.
FAQs
What is retail?
Retail refers to selling goods or services to an end user. Retailers buy goods from wholesalers, manufacturers, or other retailers and then sell them to consumers for a profit. In other words, retail is the direct selling of goods and services to a consumer.
What are 3 types of retailing?
- Brick-and-mortar retailing: This type of retailing involves traditional physical stores that customers can visit in person to shop for goods.
- Online retailing: This type of retailing involves purchasing goods through websites and other online marketplaces.
- Mobile retailing: This type of retailing involves buying and selling goods through mobile apps and devices.
What is considered retail?
Retail is the sale of goods or services from a business directly to a consumer for their use. It can include physical stores, online stores, and mobile stores. Retailers range from large department stores to small, independent businesses.
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