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Retail involves the process of selling consumer goods or services to customers through multiple channels of distribution to earn a profit. Demand is created[by whom?] through diverse target markets and promotional tactics, satisfying consumers' perceived wants and needs through a lean supply chain. In the 2000s, an increasing amount of retailing occurs online using electronic payment and delivery via a courier or via postal mail. Retailing as a sector includes subordinated services, such as delivery. The term "retailer" is also applied where a service provider services the small orders of a large number of individuals, rather than large orders of a small number of wholesale, corporate or government clientèle. Shops may be on residential streets, streets with few or no houses, or in a shopping mall. Shopping streets may restrict traffic to pedestrians only. Sometimes a shopping street has a partial or full roof to create a more comfortable shopping environment - protecting customers from various types of weather conditions such as extreme temperatures, winds or precipitation. Forms of non-shop retailing include online retailing (a type of electronic commerce used for business-to-consumer (B2C) transactions) and mail order.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain final goods, including necessities such as food and clothing; sometimes it takes place as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing: it does not always result in a purchase.
Retail comes from the Old French word tailler, which means "to cut off, clip, pare, divide" in terms of tailoring (1365). It was first recorded as a noun with the meaning of a "sale in small quantities" in 1433 (from the Middle French retail, "piece cut off, shred, scrap, paring"). Like in French, the word retail in both Dutch and German also refers to the sale of small quantities of items.
The retailing strategy is a marketing plan abstractly designed to offer its products and services in a way that will optimize customer satisfaction. Service quality and marketing mix strategy have significant and positive association on customer loyalty. The marketing strategy effectively outlines all key aspects of firms targeted audience; demographic and preference. Throughout a highly competitive market, the retail strategy sets up long-term sustainability. It focuses on customer relationships, stressing the importance of added value and customer satisfaction. The retail mix is designed to complement the retail strategy through theoretical tools such as the product, its quality and value, the promotions, place, and price.
Retail store design strategy
The design of a retail store is critical when appealing to its intended market, as this is where first impressions are made. It can influence a consumer’s perception of the quality of the store, visually communicating value. Certain techniques are used to create a consumer brand experience, which in the long run drives brand loyalty. The front of the store is paid close attention too, known as the “decompression zone"  This is usually an open space in the entrance of the store to allow customers to adjust to their new environment. An open planned floor design is effective in retail as it allows customers to see everything. Depending on what side of the road cars drive on in the country, determines what way the store will direct its customers. New Zealand retailer stores for instances would direct customers to the left. Brands are now recognizing that human nature has a conceptual profile and a sensory profile. Through the notions of sensory stimulation retailers can engage maximum emotional impact between a brand and its consumers by relating to both profiles; the goal and experience. By achieving so it can influence purchasing behavior maximizing outcomes. This is done through the relation of touch, smell, sight, taste and noise. It is common for a retailer store to play music that relates to their targeted market. Jewelry stores like Michel Hill have dim lighting to creating a sense of intimacy. Super markets offer taste testers. Clothing garments are at arms reach, allowing customers to feel the different textures of clothing. Wooden floors also contrast with the carpeted fitting rooms, which is designed to create a sense of homeliness when trying on garments. ‘Peter Alexandra’ is renown for their scented candles. These aspects outlined add to the sensory experience put in place to strategically achieve customer satisfaction and retention. This will create future opportunity and help a brand stand out in amongst the competitive market.
A marketplace is a location where goods and services are exchanged. The traditional market square is a city square where traders set up stalls and buyers browse the stores. This kind of market is very old, and countless such markets are still in operation around the whole world.
In some parts of the world, the retail business is still dominated by small family-run stores, but this market is increasingly being taken over by large retail chains. Most of these stores are called high street stores. Gradually high street stores are being re-grouped in condensed geographical areas along specific streets or districts such as the Magnificent Mile in Chicago, Illinois or at single locations called malls. These are more defined and planned spaces for retail stores and brands.
Retail is usually classified by the following type of products:
These are the following types of retailers by marketing strategy:
Department stores are very large stores offering a huge assortment of "soft" and "hard" goods which often bear a resemblance to a collection of specialty stores. A retailer of such store carries a variety of categories and has a broad assortment of goods at an average price. They offer considerable customer service.
Discount stores tend to offer a wide array of products and services, but they compete mainly on price. They offer extensive assortments of merchandise at affordable and cut-rate prices. In the past, retailers sold less fashion-oriented brands. However, in more recent years companies such as TJX Companies (Own T.J. Maxx and Marshalls) and Ross Stores are discount store operations increasingly offering fashion-oriented brands on a larger scale.
Warehouses that offer low-cost, often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee.
Variety stores offer extremely low-cost goods, with a vast array of selection. The downfall to this is that the items are not very high quality.
Retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy individuals).
A small retail outlet owned and operated by an individual or family. Focuses on a relatively limited and selective set of products.
A specialty (BE: speciality) store has a narrow marketing focus — either specializing on specific merchandise, such as toys, shoes, or clothing, or on a target audience, such as children, tourists, or plus-size women. Size of store varies — some specialty stores might be retail giants such as Toys "R" Us, Foot Locker, and The Body Shop, while others might be small, individual shops such as Nutters of Savile Row. Such stores, regardless of size, tend to have a greater depth of the specialist stock than general stores, and generally offer specialist product knowledge valued by the consumer. Pricing is usually not the priority when consumers are deciding upon a specialty store; factors such as branding image, selection choice, and purchasing assistance are seen as important. They differ from department stores and supermarkets which carry a wide range of merchandise.
Boutique or concept stores are similar to specialty stores. Concept stores are very small in size, and only ever stock one brand. They are run by the brand that controls them. An example of brand that distributes largely through their own widely distributed concept stores is L'OCCITANE en Provence. The limited size and offering of L'OCCITANE's stores are too small to be considered a specialty store proper.
A general store is a rural store that supplies the main needs for the local community.
A convenience store provides limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchase consumables as it often works with extended hours, stocking every day.
Provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats.
A supermarket is a self-service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be anywhere between 20,000 and 40,000 square feet (3,700 m2). Example: SPAR supermarket.
A shopping mall has a range of retail shops at a single outlet. They can include products, food and entertainment under one roof. Malls provide 7% of retail revenue in India, 10% in Vietnam, 25% in China, 28% in Indonesia, 39% in the Philippines, and 45% in Thailand.
By supplying wide assortment in a single category for lower prices a category killer retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity.
The customer can shop and order through the internet and the merchandise is dropped at the customer's doorstep or an e-tailer. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping.
A vending machine is an automated piece of equipment wherein customers can drop the money in the machine and acquire the products. Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target.
Other types of retail store include:
Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behaviour. A good format will lend a hand to display products well and entice the target customers to spawn sales.
|Worldwide Top Ten Retailers|
|Rank||Company||Country of Origin||2013 revenue ($US million)|
|9||The Home Depot||United States||$74,754|
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, students, or senior citizens.
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.
|Country||% of retail stores facing competition|
|Bosnia and Herzegovina||79%|
Retail trade provides 9% of all jobs in India and 14% of GDP.
Because patronage at a retail outlet varies, flexibility in scheduling is desirable. Employee scheduling software 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; 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.
There are several ways in which consumers can receive goods from a retailer:
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.E-tailers like OLX,Quikr etc. also working on second hand goods sales.
To achieve and maintain a foothold in an existing market, a prospective retail establishment must overcome the following hurdles:
|This section does not cite any sources. (September 2015)|
Every retail store operates under the goal of overcoming the other competition in the market to create brand dominance and/or large profit. This is done by different sales techniques created and/or adopted by retailers. Techniques include hiring staff which are deemed attractive by the target demographic (Physical appearance, smell, sound and behavior all attribute to a persons attractiveness). other techniques include store location, somewhere easily visible with lots of traffic (Traffic can be but not limited to pedestrians or vehicles). Also stores create custom interior design to suit the stores personality and the target market. Some of the largest retailers spend millions on a stores marketing technique to invite customers in to spend their time and money. . As consumers have grown from the days of wandering in and buying goods or services just for the face value to being informed on products and how they are made companies focus on the values of society such as being sustainable or being fair trade approved. Conscious consumers are attracted by the stores morals of being righteous and thus creating a strong brand image that stands our from the competition. Adding value to goods or services such as a free gift or buy 1 get 1 free adds value to customers where as the store is gaining sales
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 is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment." It is important for a sales associate to greet the customer and make himself available to help the customer find whatever he needs. When a customer enters the store, it is important that the sales associate does everything in his power to make the customer feel welcomed, important, and make sure he leaves the store satisfied. Giving the customer full, undivided attention and helping him find what he is looking for will contribute to the customer's satisfaction. For retail store owners, it is extremely important to train yourself and your staff to provide excellent customer service skills. By providing excellent customer service, you build a good relationship with the customer and eventually will attract more new customers and turn them into regular customers. Looking at long term perspectives, excellent customer skills give your retail business a good ongoing reputation and competitive advantage. Customer service is essential for several reasons. By exemplifying these valued qualities for a customer; companies utilize the experience the customer walks away with. Thus, setting the example for providing "great customer service."  An organization who trains their employees about properly servicing the customer will benefit more than those who do not. Customer service training entails about how properly servicing the customer will benefit corporations and businesses. This being said, it is important to establish a bond amongst customers-employees known as Customer relationship management.
The United States retail sector features the largest number of large, lucrative retailers in the world. A 2012 Deloitte report published in STORES magazine indicated that of the world's top 250 largest retailers by retail sales revenue in fiscal year 2010, 32% of those retailers were based in the United States, and those 32% accounted for 41% of the total retail sales revenue of the top 250.
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 GDP. Retail firms provide data on the dollar value of their retail sales and inventories. A sample of 12,000 firms is included in the final 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.
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
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%.
|Economy||As % of GDP, 1970||As % of GDP, 2012||1970 Value per Capita (2012 Prices)||2012 Value per Capita|
|Antigua and Barbuda||26.4||26.8||$1,081||$3,540|
|Bosnia and Herzegovina||17.9||$807|
|British Virgin Islands||19.7||27.2||$2,178||$8,821|
|Central African Republic||14.0||13.5||$100||$65|
|China: Hong Kong SAR||19.1||29.3||$1,197||$10,772|
|China: Macao SAR||8.0||14.9||$592||$11,629|
|Korea, North D.P.R.||11.7||18.3||$231||$107|
|Democratic Republic of the Congo|
|Iran (Islamic Republic of)||10.6||11.6||$473||$834|
|Laos People's DR||14.2||20.3||$44||$278|
|Papua New Guinea||13.9||9.3||$243||$204|
|Saint Kitts and Nevis||8.4||12.6||$256||$1,800|
|Sao Tome and Principe||25.5||26.2||$273||$363|
|St. Vincent and the Grenadines||12.6||16.5||$231||$1,045|
|State of Palestine||16.7||18.4||$136||$448|
|Syrian Arab Republic||20.4||22.7||$184||$482|
|Trinidad and Tobago||18.9||17.1||$1,323||$2,966|
|Turks and Caicos Islands||38.2||38.0||$1,557||$8,520|
|Tanzania: Mainland, see also Zanzibar||15.0||15.8||$51||$96|
|United Arab Emirates||15.4||12.1||$24,122||$5,024|
|Yemen Arab Republic (Former)||13.7|
|Yemen Democratic (Former)||21.2|
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 & acquisitions with a total known value of 2.255 trillion USD have been announced. The largest transactions with involvement of retailers in/from the United States have been: the acquisition of Albertson's Inc. for 17 bil. USD in 2006, the merger between Federated Department Stores Inc with May Department Stores valued at 16.5 bil. USD in 2005 - now Macy's, and the merger between Kmart Holding Corp and Sears Roebuck & Co with a value of 10.9 bil. USD in 2004.
Types of store or shop:
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|url=value (help). Imaa-institute.org. Retrieved 2012-11-02.
|url=value (help). Phx.corporate-ir.net. Retrieved 2012-11-02.
|url=value (help). Searsholdings.com. Retrieved 2012-11-02.
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