Retailing consists of the
sale of goods or merchandise from a fixed location, such as a
department store,
boutique or
kiosk, or by
mail, 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. 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.
Shops may be on residential streets, shopping streets with few or no houses or in a
shopping 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, a type of
electronic commerce used for
business-to-consumer (B2C) transactions 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.
Etymology
thumb|The [[Apple Store retail location on the
Magnificent Mile in
Chicago.]]
thumb|The world's only [[Garmin retail location is located on the
Magnificent Mile in
Chicago.]]
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 refers to the sale of small quantities of items.
Retail pricing
The
pricing technique used by most retailers is
cost-plus pricing. This involves adding a
markup amount (or percentage) to the retailer's 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, when prices are not clearly displayed, there can be
price discrimination, where the sale price is dependent upon who the customer is. For example, a customer may have to pay more if the seller determines that he or she is willing and/or able to. Another example would be the practice of discounting for youths or students.
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.
- 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.
Second hand retail
Some shops sell second-hand goods. In the case of a
nonprofit shop, the public donates goods to the shop to be sold. In
give-away shops goods can be taken for free.
Another form is the
pawnshop, in which goods are sold that were used as collateral for loans. 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.
Discount stores
Discount stores offer a wide range of products, although they mainly offer value goods, such as housewares, clothes, kitchen-wares, gifts and healthcare products. These are sold at reduced prices, because many of them are either
brand name or
clearance products.
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 seasonal and promotional changes. As products change, so will a retail landscape. Retailers may also use
facing techniques 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 upon 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."
Bibliography
See also
