Retailing consists of all the activities that result in the offering for sale of merchandise or services to consumers for their own use. Retailing is the final step in bringing goods to consumers. Not all retailers sell merchandise. Instead, many retailers sell services, such as automobile maintenance and repair, or the rental of tools or other items. Some retailers sell both goods and services. A clothing store, for example, may perform alterations as well as sell clothes.
Retailers sell to consumers for use, rather than to producers or other firms for resale. When an automobile manufacturer needs tires for the cars it builds, it does not buy from a retailer. But individuals who need tires for their cars do buy them from a retailer. Some retailers do not operate from a store. Instead, they sell goods by such techniques as door-to-door selling and selling through catalogs, the Internet, and the telephone.
Retailers perform several functions as part of the marketing system. They assume risk by buying merchandise without any guarantee that they will be able to sell it and by extending credit to consumers who purchase their goods. Retailers bring buyers and merchandise together by purchasing products in large lots and dividing them up for sale in smaller quantities that are more convenient for consumers. Retailers stock a variety of goods to provide customers with a wide range of choice.
Through advertising and other types of promotion, retailers help attract consumers to a producer’s goods. Because of their day-to-day contact with customers, retailers are in a good position to know what consumers want. They can therefore provide producers with information on consumers’ buying habits. Some retailers sell private label merchandise—that is, merchandise that is developed and produced specifically for their stores. Careers in retailing include such positions as salesperson, credit manager, designer, fashion coordinator, merchandise buyer, store manager, and store owner.
Retail firms can be classified in a variety of ways. Some stores are located in downtown areas, but others are in shopping malls. Some firms are owned by individual proprietors, and others belong to large, national or international chains. Some retail businesses are cooperatives and are owned by the people who use their services. This article discusses (1) specialty stores, (2) department stores, (3) discount stores, (4) supermarkets, (5) chain stores, (6) service retailing, and (7) nonstore retailing.
Specialty stores
normally sell a single type of merchandise, such as clothing, books, or jewelry. They may also carry a few closely related lines of merchandise.
Department stores
have separate departments devoted to selling a particular line of goods. Department stores usually sell perfumes, jewelry, cosmetics, and similar articles on the first floor. Such hard goods as furniture and appliances are sold in one section of the store, and such soft goods as clothes and home furnishings are sold in other areas. Many department stores also have separate areas that provide such services as gift wrapping and credit. The first department stores were established in the 1850’s in Europe and in the 1860’s in the United States.
Discount stores
operate largely on a self-service basis. They sell hard and soft goods, beauty aids, and other general merchandise at low prices. They became important after World War II ended in 1945, and they grew significantly in the late 1900’s and early 2000’s.
Supermarkets
are large retail food stores. Supermarkets began operating throughout the United States during the 1930’s. At first, they sold only food products. But today , many supermarkets also stock auto supplies, cleaning products, greeting cards, and other nonfood items.
Chain stores
are groups of stores with a common, central management. In some chains, all the stores are owned by a single company. In others, each store is owned by an individual who pays a fee for the franchise (see Franchise ). Historians consider the Great Atlantic and Pacific Tea Company (A&P) to be the first retail chain in the United States. It began operation in 1859 as the Great American Tea Company. Today, many specialty stores, department stores, discount stores, and supermarkets belong to chains. See Chain store ; Walton, Sam .
Service retailing
is the selling of services. These services include hair styling, interior design, lawn care, photography, car rental, and many other activities.
Nonstore retailing
is selling that does not take place in a store building. It includes such methods as selling by mail order, vending machine, telephone, door-to-door visits, and in-home events. Some retailers offer their products for sale online, or in catalogs, as well as in retail shops. Other companies, such as Amazon.com, do not have retail stores, but only sell their products online. Selling products online is known as electronic commerce, or e-commerce.
