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Retail is the sale of
goods In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant ...

goods
and
services Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administrative service, a required part of the workload of Faculty (academic staff), university faculty * Civil service, the body of employees of a governm ...
to
consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or Service (economics), services primarily for personal, social, family, household and similar needs, not directly related to entrepreneurial or bu ...
s, in contrast to
wholesaling Wholesaling or distributing is the sale of goods or merchandise Merchandising is any practice which contributes to the sale of products to a retail consumer A consumer is a person or a group who intends to order, orders, or uses purchased ...
, which is sale to business or institutional customers. A retailer purchases goods in large quantities from
manufacturers Manufacturing is the creation or production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (g ...
, directly or through a wholesaler, and then sells in smaller quantities to consumers for a
profit Profit may refer to: Business and law * Profit (accounting) Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic en ...
. Retailers are the final link in the
supply chain In commerce, a supply chain is a system of organizations, people, activities, information, and resources involved in supplying a product (business), product or service (business), service to a consumer. Supply chain activities involve the transfo ...

supply chain
from producers to consumers.
Shopping Shopping is an activity in which a customer browses the available goods or services presented by one or more retailers with the potential intent to purchase a suitable selection of them. A typology of shopper types Typology is the study of ty ...

Shopping
generally refers to the act of
buying Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of ru ...

buying
products. Sometimes this is done to obtain
final goods A final goods or consumer goods is a commodity In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, ...
, including necessities such as food and clothing; sometimes it takes place as a
recreation Recreation is an activity of leisure Leisure has often been defined as a quality of experience or as free time. Free time is spent away from , , , , and , as well as necessary activities such as and ing. Leisure as an experience usuall ...

recreation
al activity. Recreational shopping often involves
window shopping Window shopping, sometimes called browsing, refers to an activity in which a consumer browses through or examines a store's merchandise as a form of leisure or external search behaviour without a current intent to buy. Depending on the individual, ...

window shopping
and browsing: it does not always result in a purchase. Retail markets and shops have a very ancient history, dating back to antiquity. Some of the earliest retailers were itinerant
peddler A peddler, in British English pedlar, also known as a chapman, packman, cheapjack, hawker, higler, huckster, (coster)monger, colporteur or solicitor, is a door-to-door and/or traveling vendor of good (economics), goods. In England, the term was ...

peddler
s. Over the centuries, retail shops were transformed from little more than "rude booths" to the sophisticated shopping malls of the modern era. Most modern retailers typically make a variety of strategic level decisions including the type of store, the
market Market may refer to: *Market (economics) *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an island shared by Finland and Sweden Art, entertainment, and media Films *Market (1965 film), ''Market'' (1965 ...
to be served, the optimal product assortment,
customer service Customer service is the provision of Service (economics), service to customers before, during, and after a purchase. The perception of success of such interactions is dependent on employees "who can adjust themselves to the personality of the gues ...
, supporting services and the store's overall market positioning. Once the strategic retail plan is in place, retailers devise the retail mix which includes product, price, place, promotion, personnel, and presentation. In the
digital age#REDIRECT Information Age The Information Age (also known as the Computer Age, Digital Age, or New Media Age) is a historical periodHuman history is commonly divided into three main Era, eras — Ancient history, Ancient, Post-classical history, ...
, an increasing number of retailers are seeking to reach broader markets by selling through multiple channels, including both
bricks and mortar Bricks and Mortar (foaled March 2, 2014) is an American Thoroughbred racehorse who was named the American Horse of the Year The American Award for Horse of the Year, one of the Eclipse Awards, is the highest honor given in American thoroughbred ...
and
online retailing Online shopping is a form of electronic commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of Product (business), products on online services or over the Internet. The term was coined and first employ ...
. Digital technologies are also changing the way that
consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or Service (economics), services primarily for personal, social, family, household and similar needs, not directly related to entrepreneurial or bu ...
s pay for goods and services. Retailing support services may also include the provision of credit, delivery services, advisory services, stylist services and a range of other supporting services. Retail shops occur in a diverse range of types and in many different contexts – from strip shopping centres in residential streets through to large, indoor
shopping mall A shopping mall (or simply mall) is a North American term for a large indoor shopping center A shopping center (American English) or shopping centre (Commonwealth English), also called a shopping complex, shopping arcade, shopping plaza or ga ...

shopping mall
s.
Shopping streets This page lists shopping streets and districts by city. Typically these are open-air street-side upscale shopping districts that are destination locations in cities. They may be located along a designated street, or clustered in mixed-use commer ...
may restrict traffic to pedestrians only. Sometimes a shopping street has a partial or full
roof A roof is the top covering of a building A building, or edifice, is a structure with a roof and walls standing more or less permanently in one place, such as a house A house is a single-unit residential building, which may range in co ...

roof
to create a more comfortable shopping environment – protecting customers from various types of weather conditions such as extreme temperatures, winds or
precipitation In meteorology Meteorology is a branch of the (which include and ), with a major focus on . The study of meteorology dates back , though significant progress in meteorology did not begin until the 18th century. The 19th century saw mod ...
. Forms of non-shop retailing include online retailing (a type of electronic-commerce used for business-to-consumer (B2C) transactions) and
mail order Mail order is the buying Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting or interrelated elements that ...
.


Etymology

The word ''retail'' comes from the
Old French Old French (, , ; Modern French French ( or ) is a Romance language The Romance languages, less commonly Latin or Neo-Latin languages, are the modern languages that evolved from Vulgar Latin Vulgar Latin, also known as Popular o ...
verb ''tailler'', meaning "to cut off, clip, pare, divide in terms of tailoring" (c. 1365). It was first recorded as a noun in 1433 with the meaning of "a sale in small quantities" from the
Middle French Middle French (french: moyen français) is a historical division of the French language French ( or ) is a Romance language of the Indo-European family The Indo-European languages are a language family A language is a structured ...
verb ''retailler'' meaning "a piece cut off, shred, scrap, paring". At the present, the meaning of the word ''retail'' (in English, French, Dutch, German and Spanish) refers to the sale of small quantities of items to consumers (as opposed to
wholesale Wholesaling or distributing is the sale of goods or merchandise Merchandising is any practice which contributes to the sale of products to a retail consumer A consumer is a person or a group who intends to order, orders, or uses purch ...
).


Definition and explanation

Retail refers to the activity of selling goods or services directly to consumers or end-users. Some retailers may sell to business customers, and such sales are termed ''non-retail activity.'' In some jurisdictions or regions, legal definitions of retail specify that at least 80 percent of sales activity must be to end-users. Retailing often occurs in retail stores or service establishments, but may also occur through direct selling such as through vending machines, door-to-door sales or electronic channels. Although the idea of retail is often associated with the purchase of goods, the term may be applied to service-providers that sell to consumers. Retail service providers include retail banking, tourism, insurance, private healthcare, private education, private security firms, legal firms, publishers, public transport and others. For example, a tourism provider might have a retail division that books travel and accommodation for consumers plus a wholesale division that purchases blocks of accommodation, hospitality, transport and sightseeing which are subsequently packaged into a holiday tour for sale to retail travel agents. Some retailers badge their stores as "wholesale outlets" offering "wholesale prices." While this practice may encourage consumers to imagine that they have access to lower prices, while being prepared to trade-off reduced prices for cramped in-store environments, in a strictly legal sense, a store that sells the majority of its merchandise direct to consumers, is defined as a retailer rather than a wholesaler. Different jurisdictions set parameters for the ratio of consumer to business sales that define a retail business.


History

Retail markets have existed since ancient times. Archaeological evidence for trade, probably involving barter systems, dates back more than 10,000 years. As civilizations grew, barter was replaced with retail trade involving coinage. Selling and buying are thought to have emerged in Asia Minor (modern Turkey) in around the 7th-millennium BCE. In
ancient Greece Ancient Greece ( el, Ἑλλάς, Hellás) was a civilization belonging to a period of History of Greece, Greek history from the Greek Dark Ages of the 12th–9th centuries BC to the end of Classical Antiquity, antiquity ( AD 600). This era wa ...
markets operated within the
agora Image:TyreAlMinaAgora.jpg, upAgora of Tyre, Lebanon, Tyre The agora (; grc, ἀγορά ''agorá'') was a central public space in ancient Ancient Greece, Greek polis, city-states. It is the best representation of a city-state's response to accom ...

agora
, an open space where, on market days, goods were displayed on mats or temporary stalls. In
ancient Rome In historiography Historiography is the study of the methods of historian ( 484– 425 BC) was a Greek historian who lived in the 5th century BC and one of the earliest historians whose work survives. A historian is a person who stud ...

ancient Rome
, trade took place in the
forum Forum (plural forums or fora) may refer to: Common uses * Forum (legal), designated space for public expression in the United States *Forum (Roman), open public space within a Roman city **Roman Forum, most famous example *Internet forum, discus ...
. The Roman forum was arguably the earliest example of a permanent retail shop-front. Recent research suggests that China exhibited a rich history of early retail systems. From as early as 200 BCE, Chinese packaging and branding were used to signal family, place names and product quality, and the use of government imposed product branding was used between 600 and 900 CE. Eckhart and Bengtsson have argued that during the Song Dynasty (960–1127), Chinese society developed a consumerist culture, where a high level of consumption was attainable for a wide variety of ordinary consumers rather than just the elite. In
Medieval England England in the Middle Ages concerns the history of England The British Isles became inhabited more than 800,000 years ago, as the discovery of stone tools and footprints at Happisburgh in Norfolk has indicated.; "Earliest footprints outside ...
and
Europe Europe is a continent A continent is any of several large landmass A landmass, or land mass, is a large region In geography Geography (from Greek: , ''geographia'', literally "earth description") is a field of scienc ...

Europe
, relatively few permanent shops were to be found; instead, customers walked into the tradesman's workshops where they discussed purchasing options directly with tradesmen. In the more populous cities, a small number of shops were beginning to emerge by the 13th century. Outside the major cities, most consumable purchases were made through markets or fairs. Market-places appear to have emerged independently outside Europe. The
Grand Bazaar
Grand Bazaar
in
Istanbul Istanbul ( , ; tr, İstanbul ), formerly known as Constantinople, is the List of largest cities and towns in Turkey, largest city in Turkey and the country's economic, cultural and historic center. The city straddles the Bosporus strait, and lie ...

Istanbul
is often cited as the world's oldest continuously-operating market; its construction began in 1455. The Spanish conquistadors wrote glowingly of markets in the Americas. In the 15th century, the
Mexica The Mexica (Nahuatl Nahuatl (; ),The Classical Nahuatl word (noun stem ''nāhua'', + absolutive ''-tl'' ) is thought to mean "a good, clear sound" This language name has several spellings, among them náhuatl (the standard spelling in the ...

Mexica
(
Aztec The Aztecs () were a Mesoamerican culture that flourished in central Mexico in the post-classic period from 1300 to 1521. The Aztec peoples included different Indigenous peoples of Mexico, ethnic groups of central Mexico, particularly those g ...

Aztec
) market of Tlatelolco was the largest in all the
Americas The Americas (also collectively called America) is a landmass comprising the totality of North America, North and South America. The Americas make up most of the land in Earth's Western Hemisphere and comprise the New World. Along with th ...

Americas
. By the 17th century, permanent shops with more regular trading hours were beginning to supplant markets and fairs as the main retail outlet. Provincial shopkeepers were active in almost every English market town. As the number of shops grew, they underwent a transformation. The trappings of a modern shop, which had been entirely absent from the sixteenth- and early seventeenth-century store, gradually made way for store interiors and shopfronts that are more familiar to modern shoppers. Prior to the eighteenth century, the typical retail store had no counter, display cases, chairs, mirrors, changing rooms, etc. However, the opportunity for the customer to browse merchandise, touch and feel products began to be available, with retail innovations from the late 17th and early 18th centuries. By the late eighteenth century, grand shopping arcades began to emerge across Europe and in the Antipodes. A shopping arcade refers to a multiple-vendor space, operating under a covered roof. Typically, the roof was constructed of glass to allow for natural light and to reduce the need for candles or electric lighting. Some of the earliest examples of shopping arcade appeared in Paris, due to its lack of pavement for pedestrians.Conlin, J., ''Tales of Two Cities: Paris, London and the Birth of the Modern City'', Atlantic Books, 2013, Chapter 2 While the arcades were the province of the bourgeoisie, a new type of retail venture emerged to serve the needs of the working poor.
John Stuart Mill John Stuart Mill (20 May 1806 – 7 May 1873), also cited as J. S. Mill, was an English philosopher, Political economy, political economist, Member of Parliament (United Kingdom), Member of Parliament (MP) and civil servant. One of the most i ...
wrote about the rise of the
co-operative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous The federal subject The federal subjects of Russia, also referred to as the subjects of the Russian Federation (russian: субъекты Российск ...
retail store, which he witnessed first-hand in the mid-nineteenth century. The modern era of retailing is defined as the period from the industrial revolution to the 21st century. In major cities, the
department store A department store is a retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics) ...
emerged in the mid- to late 19th century, and permanently reshaped shopping habits, and redefined concepts of service and luxury. Many of the early department stores were more than just a retail emporium; rather they were venues where shoppers could spend their leisure time and be entertained. Retail, using mail order, came of age during the mid-19th century. Although catalogue sales had been used since the 15th century, this method of retailing was confined to a few industries such as the sale of books and seeds. However, improvements in transport and postal services led several entrepreneurs on either side of the Atlantic to experiment with catalogue sales. In the post-war period, an American architect,
Victor Gruen Victor David Gruen, born Viktor David Grünbaum
retrieved 25 February 2012
(July 18, 1903 – February 14 ...
developed a concept for a shopping mall; a planned, self-contained shopping complex complete with an indoor plaza, statues, planting schemes, piped music, and car-parking. Gruen's vision was to create a shopping atmosphere where people felt so comfortable, they would spend more time in the environment, thereby enhancing opportunities for purchasing. The first of these malls opened at
Northland Mall Northland Mall was a shopping mall located on the north side of Columbus, Ohio Columbus is the List of U.S. state capitals, state capital and the List of cities in Ohio, most populous city in the U.S. state of Ohio. With a population estimated ...
near Detroit in 1954.Malcolm Gladwell
The Terrazzo Jungle
''The New Yorker'', March 15, 2004
Throughout the twentieth century, a trend towards larger store footprints became discernible. The average size of a U.S. supermarket grew from square feet in 1991 to square feet in 2000. By the end of the twentieth century, stores were using labels such as "mega-stores" and "warehouse" stores to reflect their growing size. The upward trend of increasing retail space was not consistent across nations and led in the early 21st century to a 2-fold difference in square footage per capita between the United States and Europe. As the 21st century takes shape, some indications suggest that large retail stores have come under increasing pressure from online sales models and that reductions in store size are evident. Under such competition and other issues such as business debt, there has been a noted business disruption called the
retail apocalypse The retail apocalypse is the closing of numerous brick-and-mortar retail Retail is the process of selling consumer goods or Service (economics), services to customers through multiple distribution channel, channels of distribution to earn a ...
in recent years which several retail businesses, especially in North America, are sharply reducing their number of stores, or going out of business entirely.


Retail strategy

The distinction between "strategic" and "managerial" decision-making is commonly used to distinguish "two phases having different goals and based on different conceptual tools. Strategic planning concerns the choice of policies aiming at improving the competitive position of the firm, taking account of challenges and opportunities proposed by the competitive environment. On the other hand, managerial decision-making is focused on the implementation of specific targets." In retailing, the strategic plan is designed to set out the
vision Vision or The Vision may refer to: Perception Optical perception * Visual perception Visual perception is the ability to interpret the surrounding environment (biophysical), environment through photopic vision (daytime vision), color vis ...
and provide guidance for retail decision-makers and provide an outline of how the product and service mix will optimize customer satisfaction. As part of the strategic planning process, it is customary for strategic planners to carry out a detailed environmental scan which seeks to identify trends and opportunities in the competitive environment, market environment, economic environment and statutory-political environment. The retail strategy is normally devised or reviewed every 3– 5 years by the chief executive officer. The strategic retail analysis typically includes following elements: * Market analysis – Market size, stage of market, market competitiveness, market attractiveness, market trends * Customer analysis –
Market segmentation In marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; ...
, demographic, geographic and psychographic profile, values and attitudes, shopping habits, brand preferences, analysis of needs and wants, media habits * Internal analysis – Other capabilities e.g. human resource capability, technological capability, financial capability, ability to generate
scale economies
scale economies
or
economies of scope Economies of scope are "efficiencies formed by variety, not volume" (the latter concept is "economies of scale In microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, ...
, trade relations, reputation, positioning, past performance * Competition analysis – Availability of substitutes, competitor's strengths and weaknesses, perceptual mapping, competitive trends * Review of product mix – :: Sales per square foot, stock-turnover rates, profitability per product line * Review of distribution channels – Lead-times between placing order and delivery, cost of distribution, cost efficiency of intermediaries * Evaluation of the economics of the strategy – Cost-benefit analysis of planned activities At the conclusion of the retail analysis, retail marketers should have a clear idea of which groups of customers are to be the target of marketing activities. Not all elements are, however, equal, often with demographics, shopping motivations, and spending directing consumer activities. Retail research studies suggest that there is a strong relationship between a store's positioning and the socio-economic status of customers. In addition, the retail strategy, including service quality, has a significant and positive association with customer loyalty. A marketing strategy effectively outlines all key aspects of firms' targeted audience, demographics, preferences. In a highly competitive market, the retail strategy sets up long-term sustainability. It focuses on customer relationships, stressing the importance of added value, customer satisfaction and highlights how the store's market positioning appeals to targeted groups of customers.


Retail marketing

Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation (also known as physical evidence). The retail mix is loosely based on the
marketing mix The term "marketing mix" is a foundation model for businesses, historically centered around product, price, place, and promotion (also known as the "4 Ps"). The marketing Marketing is the process of intentionally stimulating demand for and ...

marketing mix
, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, ''Personnel'' and ''Presentation'' since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the ''Retail Format'' (i.e. retail formula) should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the ''6 Ps of retailing'' (see diagram at right).The primary product-related decisions facing the retailer are the product assortment (what product lines, how many lines and which brands to carry); the type of customer service (high contact through to self-service) and the availability of support services (e.g. credit terms, delivery services, after sales care). These decisions depend on careful analysis of the market, demand, competition as well as the retailer's skills and expertise.
Customer service Customer service is the provision of Service (economics), service to customers before, during, and after a purchase. The perception of success of such interactions is dependent on employees "who can adjust themselves to the personality of the gues ...
is the "sum of acts and elements that allow consumers to receive what they need or desire from
he
he
retail establishment." Retailers must decide whether to provide a full service outlet or minimal service outlet, such as no-service in the case of vending machines; self-service with only basic sales assistance or a full service operation as in many boutiques and speciality stores. In addition, the retailer needs to make decisions about sales support such as customer delivery and after sales customer care. Place decisions are primarily concerned with consumer access and may involve location, space utilisation and operating hours. Retailers may consider a range of both qualitative and quantitative factors to evaluate to potential sites under consideration. Macro factors include market characteristics (demographic, economic and socio-cultural), demand, competition and infrastructure (e.g. the availability of power, roads, public transport systems). Micro factors include the size of the site (e.g. availability of parking), access for delivery vehicles. A major retail trend has been the shift to multi-channel retailing. To counter the disruption caused by online retail, many bricks and mortar retailers have entered the online retail space, by setting up online catalogue sales and
e-commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of Product (business), products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, su ...

e-commerce
websites. However, many retailers have noticed that consumers behave differently when shopping online. For instance, in terms of choice of online platform, shoppers tend to choose the online site of their preferred retailer initially, but as they gain more experience in online shopping, they become less loyal and more likely to switch to other retail sites.
Online stores Online shopping is a form of electronic commerce which allows consumers to directly buy good (economics), goods or Service (economics), services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of inte ...
are usually available 24 hours a day, and many consumers across the globe have Internet access both at work and at home. The broad pricing strategy is normally established in the company's overall strategic plan. In the case of chain stores, the pricing strategy would be set by head office. Broadly, there are six approaches to pricing strategy mentioned in the marketing literature: operations-oriented,Dibb, S., Simkin, L., Pride, W.C. and Ferrell, O.C., ''Marketing: Concepts and Strategies'', Cengage, 2013, Chapter 12 revenue-oriented, customer-oriented, value-based, relationship-oriented, and socially-oriented. When decision-makers have determined the broad approach to pricing (i.e., the pricing strategy), they turn their attention to pricing tactics. Tactical pricing decisions are shorter term prices, designed to accomplish specific short-term goals. Pricing tactics that are commonly used in retail include discount pricing,Rao, V.R. and Kartono, B., "Pricing Strategies and Objectives: A Cross-cultural Survey", in ''Handbook of Pricing Research in Marketing'', Rao, V.R. (ed), Northampton, MA, Edward Elgar, 2009, p. 15
everyday low price Everyday low price (also abbreviated as EDLP) is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping. EDLP saves retail stores the effort and expense needed to mark down prices ...
s, high-low pricing,
loss leader A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion Sales promotion is one of the elements of the prom ...
s,
product bundling In marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; ...
, promotional pricing, and
psychological pricing Psychological pricing (also price ending, charm pricing) is a pricing and marketing strategy based on the theory that certain prices have a psychological impact. In this pricing method, retail prices are often expressed as just-below numbers: numb ...
. Retailers must also plan for customer preferred payment modes – e.g. cash, credit, lay-by, Electronic Funds Transfer at Point-of-Sale (EFTPOS). All payment options require some type of handling and attract costs. Contrary to
common misconception This is a list of common misconceptions. Each entry is worded as a correction; the misconceptions themselves are implied rather than stated. These entries are concise summaries of the main subject articles, which can be consulted for more detai ...
, price is not the most important factor for consumers, when deciding to buy a product. Because patronage at a retail outlet varies, flexibility in
scheduling File:Departure for the south - Nashville.jpg, A train schedule informs travelers of the trains going to various locations, and indicates the times of departure. A schedule or a timetable, as a basic time-management tool, consists of a list of ...
is desirable.
Employee scheduling softwareEmployee scheduling software automated planning and scheduling, automates the process of creating and maintaining a Schedule (workplace), schedule. Automating the scheduling of employees increases productivity and allows organizations with hourly wor ...
is sold, which, using known patterns of customer patronage, more or less reliably predicts the need for staffing for various functions at times of the year, day of the month or week, and time of day. Usually needs vary widely. Conforming staff utilization to staffing needs requires a flexible workforce which is available when needed but does not have to be paid when they are not, part-time
workers The workforce or labour force is the labour pool either in employment or unemployed.https://www.bls.gov/bls/glossary.htm It is generally used to describe those working for a single types of companies, company or Industry (economics), industr ...
; as of 2012 70% of retail workers in the United States were part-time. This may result in financial problems for the workers, who while they are required to be available at all times if their work hours are to be maximized, may not have sufficient income to meet their family and other obligations. Retailers can employ different techniques to enhance sales volume and to improve the customer experience, such as Add-on, Upsell or Cross-sell; Selling on value; and knowing when to close the sale. Transactional marketing aims to find target consumers, then negotiate, trade, and finally end relationships to complete the transaction. In this one-time transaction process, both parties aim to maximize their own interests. As a result, transactional marketing raises follow-up problems such as poor after-sales service quality and a lack of feedback channels for both parties. In addition, because retail enterprises needed to redevelop client relationships for each transaction, marketing costs were high and customer retention was low. All these downsides to transactional marketing gradually pushed the retail industry towards establishing long-term cooperative relationships with customers. Through this lens, enterprises began to focus on the process from transaction to relationship. While expanding the sales market and attracting new customers is very important for the retail industry, it is also important to establish and maintain long term good relationships with previous customers, hence the name of the underlying concept, "relational marketing". Under this concept, retail enterprises value and attempt to improve relationships with customers, as customer relationships are conducive to maintaining stability in the current competitive retail market, and are also the future of retail enterprises. Presentation refers to the physical evidence that signals the retail image. Physical evidence may include a diverse range of elements – the store itself including premises, offices, exterior facade and interior layout, websites, delivery vans, warehouses, staff uniforms. The environment in which the retail service encounter occurs is sometimes known as the ''retail servicescape.'' The store environment consists of many elements such as smells, the physical environment (furnishings, layout and functionality), ambient conditions (lighting, temperature, noise) as well as signs, symbols and artifacts (e.g. sales promotions, shelf space, sample stations, visual communications). Retail designers pay close attention to the front of the store, which is known as the ''decompression zone''. In order to maximise the number of selling opportunities, retailers generally want customers to spend more time in a retail store. However, this must be balanced against customer expectations surrounding convenience, access and realistic waiting times. The way that brands are displayed is also part of the overall retail design. Where a product is placed on the shelves has implications for purchase likelihood as a result of visibility and access. Ambient conditions, such as lighting, temperature and music, are also part of the overall retail environment.Bailey, P. (2015, April). Marketing to the senses: A multisensory strategy to align the brand touchpoints. Admap, 2–7. It is common for a retail store to play music that relates to their target market.


Shopper profiles

Two different strands of research have investigated shopper behaviour. One strand is primarily concerned with shopper motivations. Another stream of research seeks to segment shoppers according to common, shared characteristics. To some extent, these streams of research are inter-related, but each stream offers different types of insights into shopper behaviour. Babin et al. carried out some of the earliest investigations into shopper motivations and identified two broad motives: ''utilitarian'' and ''hedonic.'' Utilitarian motivations are task-related and rational. For the shopper with utilitarian motives, purchasing is a work-related task that is to be accomplished in the most efficient and expedient manner. On the other hand, hedonic motives refer to pleasure. The shopper with hedonic motivations views shopping as a form of escapism where they are free to indulge fantasy and freedom. Hedonic shoppers are more involved in the shopping experience. Many different shopper profiles can be identified. Retailers develop customised segmentation analyses for each unique outlet. However, it is possible to identify a number of broad shopper profiles. One of the most well-known and widely cited shopper typologies is that developed by Sproles and Kendal in the mid-1980s. Sproles and Kendall's consumer typology has been shown to be relatively consistent across time and across cultures. Their typology is based on the consumer's approach to making purchase decisions. * Quality conscious/Perfectionist: Quality-consciousness is characterised by a consumer's search for the very best quality in products; quality conscious consumers tend to shop systematically making more comparisons and shopping around. * Brand-conscious: Brand-consciousness is characterised by a tendency to buy expensive, well-known brands or designer labels. Those who score high on brand-consciousness tend to believe that the higher prices are an indicator of quality and exhibit a preference for department stores or top-tier retail outlets. * Recreation-conscious/Hedonistic: Recreational shopping is characterised by the consumer's engagement in the purchase process. Those who score high on recreation-consciousness regard shopping itself as a form of enjoyment. * Price-conscious: A consumer who exhibits price-and-value consciousness. Price-conscious shoppers carefully shop around seeking lower prices, sales or discounts and are motivated by obtaining the best value for money * Novelty/fashion-conscious: characterised by a consumer's tendency to seek out new products or new experiences for the sake of excitement; who gain excitement from seeking new things; they like to keep up-to-date with fashions and trends, variety-seeking is associated with this dimension. * Impulsive: Impulsive consumers are somewhat careless in making purchase decisions, buy on the spur of the moment and are not overly concerned with expenditure levels or obtaining value. Those who score high on impulsive dimensions tend not to be engaged with the object at either a cognitive or emotional level. * Confused (by
overchoice Overchoice or choice overload is a cognitive impairment in which people have a difficult time making a decision when faced with many options. The term was first introduced by Alvin Toffler in his 1970 book, '' Future Shock''.Thomas W. Simon, ''Dem ...
): characterised by a consumer's confusion caused by too many product choices, too many stores or an overload of product information; tend to experience information overload. * Habitual/brand loyal: characterised by a consumer's tendency to follow a routine purchase pattern on each purchase occasion; consumers have favourite brands or stores and have formed habits in choosing; the purchase decision does not involve much evaluation or shopping around. Some researchers have adapted Sproles and Kendall's methodology for use in specific countries or cultural groups. Consumer decision styles are important for retailers and marketers because they describe behaviours that are relatively stable over time and for this reason, they are useful for market segmentation.


Types of retail outlets

The ''retail format'' (also known as the ''retail formula'') influences the consumer's store choice and addresses the consumer's expectations. At its most basic level, a retail format is a simple
marketplace fa:بازار A market, or marketplace, is a location where people regularly gather for the purchase and sale of provisions, livestock, and other goods. In different parts of the world, a market place may be described as a ''souk'' (from the ...

marketplace
, that is; a location where goods and services are exchanged. In some parts of the world, the retail sector is still dominated by small family-run stores, but large
retail chains A chain store or retail chain is a retail Retail is the process of selling consumer goods or Service (economics), services to customers through multiple distribution channel, channels of distribution to earn a profit. Retailers satisfy dema ...
are increasingly dominating the sector, because they can exert considerable buying power and pass on the savings in the form of lower prices. Many of these large retail chains also produce their own private labels which compete alongside manufacturer brands. Considerable consolidation of retail stores has changed the retail landscape, transferring power away from wholesalers and into the hands of the large retail chains. In Britain and Europe, the retail sale of goods is designated as a '' service activity.'' The European Service Directive applies to all retail trade including periodic markets, street traders and peddlers. Retail stores may be classified by the type of product carried. Softline retailers sell goods that are consumed after a
single-use A disposable (also called disposable product) is a product designed for a single use after which it is recycle Recycling is the process of converting waste Waste (or wastes) are unwanted or unusable materials. Waste is any substa ...
, or have a limited life (typically under three years) in they are normally consumed. Soft goods include
clothing Clothing (also known as clothes, apparel, and attire) are items worn on the body. Typically, clothing is made of fabrics or textile A textile is a flexible material made by creating an interlocking bundle of yarn Yarn is a long ...

clothing
, other
fabrics A textile is a flexible material made by creating an interlocking bundle of yarn Yarn is a long continuous length of interlocked fibre Fiber or fibre (from la, fibra, links=no) is a natural Nature, in the broadest sense, ...
,
footwear Footwear refers to garment File:KangaSiyu1.jpg, A kanga (African garment), kanga, worn throughout the African Great Lakes region Clothing (also known as clothes, apparel, and attire) are items worn on the body. Typically, clothing is made o ...

footwear
,
toiletries Personal care or toiletries are consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or Service (economics), services primarily for personal, social, family, household and similar needs, not d ...
,
cosmetics Cosmetics are constituted mixtures of chemical compound A chemical compound is a chemical substance A chemical substance is a form of matter In classical physics and general chemistry, matter is any substance that has mass and take ...
,
medicines A medication (also called medicament, medicine, pharmaceutical drug, medicinal drug or simply drug) is a drug File:Aspirine macro shot.jpg, Uncoated aspirin Tablet (pharmacy), tablets, consisting of about 90% acetylsalicylic acid, along w ...

medicines
and
stationery Stationery is a mass noun In linguistics Linguistics is the scientific study of language A language is a structured system of communication used by humans, including speech (spoken language), gestures (Signed language, sign lan ...
.
Grocery store A grocery store (North America), grocery or grocery shop (UK) is a store that primarily retails a general range of food products, which may be fresh Fresh or FRESH may refer to: People *DJ Fresh Daniel Edward Stein (born 11 April 197 ...

Grocery store
s, including
supermarkets A supermarket is a self-service Self-service is the practice of serving oneself, usually when making purchases. Aside from Automatic Teller Machines, which are not limited to banks, and customer-operated supermarket check-out, labor-savin ...

supermarkets
and
hypermarkets A hypermarket (sometimes called a hyperstore, supercentre or superstore) is a big-box store A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain ...

hypermarkets
, along with
convenience stores A convenience store, convenience shop, or corner store is a small retail Retail is the process of selling consumer goods or Service (economics), services to customers through multiple distribution channel, channels of distribution to earn ...
carry a mix of food products and consumable household items such as detergents, cleansers, personal hygiene products. Retailers selling consumer durables are sometimes known as ''hardline retailers'' –
automobiles A car (or automobile) is a wheeled motor vehicle A motor vehicle, also known as motorized vehicle or automotive vehicle, is a self-propelled vehicle A vehicle (from la, vehiculum) is a machine that transports people or cargo. Vehicle ...
, appliances,
electronics The field of electronics is a branch of physics and electrical engineering that deals with the emission, behaviour and effects of electrons The electron is a subatomic particle In physical sciences, subatomic particles are smaller than ...
,
furniture Furniture refers to movable objects intended to support various human activities such as seating (e.g., chairs, stools, and sofas), eating (table (furniture), tables), and sleeping (e.g., beds). Furniture is also used to hold objects at a con ...

furniture
,
sporting goods Sporting equipment, also called sporting goods, are the tools, materials, apparel, and gear used to compete in a sport and varies depending on the sport. The equipment ranges from balls, nets, and protective gear like helmets. Sporting equipment ...
,
lumber Lumber, also known as timber, is wood Wood is a porous and fibrous structural tissue found in the stems and roots of tree In botany, a tree is a perennial plant with an elongated Plant stem, stem, or trunk (botany), trunk, sup ...
, etc., and parts for them. Specialist retailers operate in many industries such as the arts e.g. green grocers,
contemporary art galleries A gallery show opening in New York City A contemporary art gallery is normally a commercial art gallery An art gallery is a room or a building in which visual art is displayed. Among the reasons art may be displayed are aesthetic enjoyment, cul ...
,
bookstores Bookselling is the commercial trading of book A book is a medium for recording information Information is processed, organised and structured data Data (; ) are individual facts, statistics, or items of information, often num ...
,
handicrafts A handicraft, sometimes more precisely expressed as artisanal handicraft or handmade, is any of a wide variety of types of work where useful and decorative objects are made completely by one’s hand or by using only simple, non-automated rela ...

handicrafts
,
musical instruments A musical instrument is a device created or adapted to make musical sounds. In principle, any object that produces sound can be considered a musical instrument—it is through purpose that the object becomes a musical instrument. A person who play ...

musical instruments
,
gift shops A gift shop or souvenir shop is a store primarily selling souvenir A souvenir (from French, meaning "a remembrance or memory"), memento, keepsake, or token of remembrance is an object a person acquires for the memories the owner associates ...
. Types of retail outlets by marketing strategy include
shopping arcade A shopping center (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of variety (linguistics), varieties of the English language native to the United Sta ...

shopping arcade
,
anchor store In retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and ...
,
bazaar A bazaar or souk, is a permanently enclosed marketplace or street where goods and services are exchanged or sold. The term bazaar originates from the Persian language, Persian word ''bāzār''. The term bazaar is sometimes also used to refer ...

bazaar
,
boutique A boutique () is "a small store that sells stylish clothing, jewellery, or other usually luxury goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics ...

boutique
,
category killer A category killer is a retailer Retail is the sale of and to s, in contrast to , which is sale to business or institutional customers. A retailer purchases goods in large quantities from , directly or through a wholesaler, and then sells in s ...
,
chain store A chain store or retail chain is a retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distributio ...
, co-operative store convenience store,
department store A department store is a retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics) ...
s, discount stores, e-tailer, general store, give-away shop, Hawker (trade), hawkers also known as
peddler A peddler, in British English pedlar, also known as a chapman, packman, cheapjack, hawker, higler, huckster, (coster)monger, colporteur or solicitor, is a door-to-door and/or traveling vendor of good (economics), goods. In England, the term was ...

peddler
s, costermongers or street vendors, High Street, high street store, hypermarket, pop-up retail,
marketplace fa:بازار A market, or marketplace, is a location where people regularly gather for the purchase and sale of provisions, livestock, and other goods. In different parts of the world, a market place may be described as a ''souk'' (from the ...

marketplace
, market square, shopping center, speciality store, supermarket variety stores, vending machine, no frills, warehouse clubs, warehouse stores, Automated Retail, automated retail, big-box stores, second-hand shop, and charity shop. Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behavior. An effective format will determine how products are display products, as well as how target customers are attracted.


Challenges

To achieve and maintain a foothold in an existing market, a prospective retail establishment must barriers to entry, overcome the following hurdles: * Regulations, regulatory barriers including: ** restrictions on real-estate purchases, especially as imposed by Municipality, local governments and against "big-box" Big-box store, chain retailers ** restrictions on foreign investment in retailers, in terms of both absolute amount of financing provided and percentage share of voting stock (e.g. common stock) purchased * unfavorable Tax code, taxation structures, especially those designed to penalize or keep out "big box" retailers (see "Regulatory" above) * absence of developed supply-chain and integrated IT management * high Competition (economics), competitiveness among existing market participants and resulting low profit margins, caused in part by: ** constant advances in product design resulting in constant threat of product obsolescence and price declines for existing inventory * lack of a properly-educated and/or -trained work-force, often including management, caused in part by loss in business ** lack of education in the United States, educational infrastructure enabling prospective market entrants to respond to the above challenges * direct e-tailing (for example, through the Internet) and direct delivery to consumers from manufacturers and suppliers, cutting out any retail reseller, middle man.


Consolidation

Among retailers and retails chains a lot of consolidation has appeared over the last couple of decades. Between 1988 and 2010, worldwide 40,788 Mergers and acquisitions, mergers & acquisitions with a total known value of US$2.255 trillion have been announced. The largest transactions with involvement of retailers in/from the United States have been: the acquisition of Albertsons (SuperValu), Albertson's Inc. for US$17 billion in 2006, the merger between Federated Department Stores Inc with The May Department Stores Company, May Department Stores valued at 16.5 bil. USD in 2005 – now Macy's, Inc., Macy's, and the merger between Kmart, Kmart Holding Corp and Sears, Sears Roebuck & Co with a value of US$10.9 billion in 2004. Between 1985 and 2018 there have been 46,755 mergers or acquisitions conducted globally in the retail sector (either acquirer or target from the retail industry). These deals cumulate to an overall known value of around US$2,561 billion. The three major Retail M&A waves took place in 2000, 2007 and lately in 2017. However the all-time high in terms of number of deals was in 2016 with more than 2,700 deals. In terms of added value 2007 set the record with the US$225 billion. Here is a list of the top ten largest deals (ranked by volume) in the Retail Industry:


Statistics


Global top ten retailers

As of 2016, China was the largest retail market in the world.


Competition

Retail stores may or may not have competitors close enough to affect their pricing, product availability, and other operations. A 2006 survey found that only 38% of retail stores in India believed they faced more than slight competition. Competition also affected less than half of retail stores in Kazakhstan, Bulgaria, and Azerbaijan. In all countries the main competition was domestic, not foreign. Retail trade provides 9% of all jobs in India and 14% of GDP.


Statistics for national retail sales


United States

The National Retail Federation and Kantar Group, Kantar annually rank the nation's top retailers according to sales. The National Retail Federation also separately ranks the 100 fastest-growing U.S. retailers based on increases in domestic sales. Since 1951, the U.S. Census Bureau has published the Retail Sales report every month. It is a measure of consumer spending, an important indicator of the US Gross domestic product, GDP. Retail firms provide data on the dollar value of their retail sales and inventories. A Sampling (statistics), sample of 12,000 firms is included in the final Statistical survey, survey and 5,000 in the advanced one. The advanced estimated data is based on a subsample from the US CB complete retail & food services sample. Retail is the largest private-sector employer in the United States, supporting 52 million working Americans.


Central Europe

In 2011, the grocery market in six countries of Central Europe was worth nearly €107bn, 2.8% more than the previous year when expressed in local currencies. The increase was generated foremost by the discount stores and supermarket segments, and was driven by the skyrocketing prices of foodstuffs. This information is based on the latest PMR report entitled Grocery retail in Central Europe 2012 Grocery retail in Central Europe 201
Retail in Central Europe
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World

National accounts show a combined total of retail and wholesale trade, with hotels and restaurants. in 2012 the sector provides over a fifth of GDP in tourist-oriented island economies, as well as in other major countries such as Brazil, Pakistan, Russia, and Spain. In all four of the latter countries, this fraction is an increase over 1970, but there are other countries where the sector has declined since 1970, sometimes in absolute terms, where other sectors have replaced its role in the economy. In the United States the sector has declined from 19% of GDP to 14%, though it has risen in absolute terms from $4,500 to $7,400 per capita per year. In China the sector has grown from 7.3% to 11.5%, and in India even more, from 8.4% to 18.7%. Emarketer predicts China will have the largest retail market in the world in 2016. In 2016, China became the largest retail market in the world.


See also

Types of sales person: Types of store or shop: Influential thinkers in sales and retail:The names cited in this section are based on the names of retailers cited in Tsang, D., Kazeroony, H.H. and Ellis, G., ''The Routledge Companion to International Management Education'', Oxon, Routledge, 2013, pp. 119–20 * Dale Carnegie: author and lecturer; proponent of salesmanship, public speaking and self-improvement * E. St. Elmo Lewis: salesmen for NCR and developer of the AIDA (marketing), AIDA model of selling * William Thomas Rawleigh: founder of Rawleigh's company with one of the largest travelling sales teams in the United States * Harry Gordon Selfridge: founder of UK Selfridges; redefined shopping away from essential errand to a pleasurable activity; was noted for introducing a touch of theatre and celebrity appearances to department stores; also wrote the book, ''The Romance of Commerce'' published in 1918. * Walter Dill Scott: psychologist and author; wrote a number of books on the psychology of selling in the early twentieth century * Thomas J. Watson: salesman at NCR and CEO of IBM; often described as the "greatest American salesman"


References


Further reading

* Adburgham, A., ''Shopping in Style: London from the Restoration to Edwardian Elegance'', London, Thames and Hudson, 1979 * Alexander, A., "The Study of British Retail History: Progress and Agenda", in ''The Routledge Companion to Marketing History'', D.G. Brian Jones and Mark Tadajewski (eds.), Oxon, Routledge, 2016, pp. 155–72 * Feinberg, R.A. and Meoli, J., [Online
A Brief History of the Mall
Brief History of the Mall"], in ''Advances in Consumer Research'', Volume 18, Rebecca H. Holman and Michael R. Solomon (eds.), Provo, UT: Association for Consumer Research, 1991, pp. 426–27 * Hollander, S.C., "Who and What are Important in Retailing and Marketing History: A Basis for Discussion", in S.C. Hollander and R. Savitt (eds.) ''First North American Workshop on Historical Research in Marketing'', Lansing, MI: Michigan State University, 1983, pp. 35–40. * Jones, F., "Retail Stores in the United States, 1800–1860", ''Journal of Marketing'', October 1936, pp. 135–40 * * Kowinski, W.S., ''The Malling of America: An Inside Look at the Great Consumer Paradise'', New York, William Morrow, 1985 * Furnee, J.H., and Lesger, C. (eds), ''The Landscape of Consumption: Shopping Streets and Cultures in Western Europe, 1600–1900'', Springer, 2014 * MacKeith, M., ''The History and Conservation of Shopping Arcades'', Mansell Publishing, 1986 * Nystrom, P.H., "Retailing in Retrospect and Prospect", in H.G. Wales (ed.) ''Changing Perspectives in Marketing'', Urbana: University of Illinois Press, 19951, pp. 117–38. * Stobard, J., ''Sugar and Spice: Grocers and Groceries in Provincial England, 1650–1830'', Oxford University Press, 2016 *Underhill, Paco, ''Call of the Mall: The Author of Why We Buy on the Geography of Shopping,'' Simon & Schuster, 2004


External links


ECRoPEDIA – Free Global Collection of Retail/FMCG Best practices by ECR Community

Investopedia.The Industry Handbook: The Retailing Industry

National Retail Federation
(U.S.-based trade association) {{Authority control Retailers, Retailing, Marketing strategy Merchandising