Purpose & Aim
Understand the term Retail and concepts of retailing. This article also deals with the various functions of retail and how it helps the society.
At the end of the unit, the learner would know
- About the Retailing concepts
- Importance of Retailing
- Future of Retailing
- Social and Economics Significance of Retailing
- Retail Management Careers
Retail comes from the Old French word ‘tailler’ which means “to cut off, clip, pare, divide” in terms of tailoring. It was first recorded as a noun with the meaning of a “sale in small quantities” in 1433.
Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesaler, and then sells smaller quantities to the consumer for a profit.
Retailing can be done in either fixed locations like stores or markets, door-to-door or by delivery. Retailing includes subordinated services, such as delivery.
The term “retailer” is also applied where a service provider services the needs of a large number of individuals, such as for the public. Shops may be on residential streets, 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.
A group of retailers makes Marketplace. 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. It is a place for regular gathering of people for the purchase and sale of provisions, livestock, and other products. it is a place where buying and selling of the goods happens. In different parts of the world they may be referred differently.
Why is Retailing Important?
Retailing is the final link between consumers and manufacturers, and they are an important part of the corporate world. Retailers escalate the value of products by making it lot easier for manufactures to sell and consumers to buy as it provides platform for both the parties.
It would be very costly and time consuming for one to locate, contact and make a purchase from the manufacturer every time you want to buy a candy, cookies or a bar of soap. Similarly, it would cost lot of economic constraints for the manufactures of these products to locate and supply them to consumers individually.
By calling masses of manufacturers and consumers together at a single point, retailers make it possible for products to be sold, and, thereby, business to be done efficiently which is a win-win for all the three parties.
Along with the sales retailers provide services that make it more fun to buy products. The salespersons on hand can answer your queries and may offer credit, and display products so that consumers know what is available and can see it before buying.
In many stores they pitch you with great music which makes your shopping experience enjoyable. In addition, retailers also impart extra care, which includes personal shopping, gift wrapping and delivery, this eventually increases the value of products and services to consumers which positively makes attached to the retail store.
Retails have the capability to introduce newer categories and cater new products to public. It has grown enormously and since new products and categories are launching every other day and you, chances are might miss it on a wholesale store but seldom on a retail store.
Say a retail store is offering the entire range of shampoos of HUL (Hindustan Uniliver) but a recently launched Garnier shampoo might not find its place to its shelf because it did not know that it was launched in the first place.
Retailing gives strength to a company, and potentially develops its ability of competence in a competition driven market place. A strength which is a cumulative result or derivative of the huge risks played by a company on small retailers rather than on whole-sellers.
Things look even better when customer comes searching for a product which he knows that is available only at your store. It is better to have a domination under certain arenas that captures (may be loves) your visitor to come back to your store for the product.
The best example of this practice is iPhone. I think mere the name of iPhone clearly convey my message to you.
The Future of Retailing
Advancements in engineering and technology, like Internet, and information technology have helped to make retailing a very perplexing and exciting field in recent years. The character of the industry and the way retailing is done are currently experiencing vital changes.
Nevertheless, retailing in one form or the other, be it offline or online, will always be necessary. For example, even though the online companies are beginning to mold the manufacturers to sell directly to consumers, the enormity of internet will still make it cumbersome for a consumer to purchase every product he or she has a utility of.
Many on-line retailers, like Amazon.com in USA and Flipkart.com in India, bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do.
In addition to this, traditional retailers present in the vicinity of your neighborhood with physical stores will continue to be great significance. The main reason being, the speed, you can just drop into the retail store and choose whatever you want, whereas in online selling platforms it takes at least a day for your product to get delivered.
Urgency for a product can only be helped by offline stores and not online. Think about medicines, I think this example has made my point clear.
Retailers who offer personal services, like hair styling, will always need to have peer-to-peer interaction with the consumer. But even with products, consumers often want to see, touch and try them before they buy (this actually helps to get mental satisfaction and surety about the product which they are buying.
Also, and perhaps most importantly, in many cases the experience of visiting the retailer is a necessary part of the purchase.
The best piece with traditional stores is that you can actually see and check the quality of the product by your own hands and you INSTANTLY get your product while the case is not same with online retailing, online retailers although provide one day delivery promise but it is not always possible to get your order delivered within 24 hours.
Offline stores are of great significance when you have good bonding with your customer, customers come again and again to your store and hence they become your loyal customer. The managerial and salesmanship becomes a great play in offline store. The bonding helps customer too, as the salesman throws some great discount for the loyal customers by which both the store and customer benefits.
Social and Economics Significance of Retailing
Support for Community
Retailers provide support to their communities and society, as well as to their customers. Many retailers have contributed to a very large extent to charities and donation to big donation groups.
For example: ITC and P&G are involved in developing countries to help the poor students study by contributing Re.1 for their every product sold. Retailers are also responsible for developing many innovative products and services.
Retailing affects every facet of life. Retailing is the backbone of market; everything that a consumer needs comes from market. As mentioned in earlier articles, a consumer can’t go to different lot of stores just to buy one item and thereby wasting a lot of time for preparing just a single meal.
Just think of how many daily contacts you have to have with retailers when you eat meals, furnish your apartment, have your tap fixed, and buy clothes for a party or job interview. While the majority of retail sales are made by large retail chains, most retailers are small businesses which operate in small towns but big cities too.
Retail Industry, one of the fastest changing and vibrant industries in the world (the statistics are provided in another article), has contributed to the economic growth of many countries. Retail is also one of the nation’s largest industries in terms of employment. Training period for a retail employee is also low, and there is minimal requirement of academic performance.
Retail business in India boomed in the 80’s and in China during 70s and in a short duration of time, Indian and Chinese retail sector has been rated as the fifth and third most attractive, emerging retail market in the world respectively.
Indian retail sector which account for over 10% of the country’s GDP (gross domestic product) and around 8% of employment, is anticipated to blossom at a compound rate of 30% over the next 5 years.
With the tremendous growth of economy in developed countries and developing countries, retail management has emerged as one of the fastest growing careers in India(a developing third world country).
The enormous expansion in the retail sector during the past few years has thrown up a big demand for skilled professionals in the field which has caused a drastic change in economy on a positive scale.
It is an industry looking for people at all levels, from the high school pass oust with basic skills, to the well qualified supply chain and retail management professionals, giving a huge chunk of money for their respective jobs by industry standards.
One can take up a job depending on one’s interest and aptitude, for retail industry is an array of activities starting from marketing to branding. The icing on cake is the salary given. This makes retail profession one of the most demanding careers of the era.
The working time and atmosphere all depends upon the company one works for. All companies have different work environments. The best company to work for is Google, but sadly it doesn’t own a retail chain. One could start his career as a management trainee, or a sales trainee and with hard-smart work and right attitude, could reach the manager posts of different departments.
Advertising agencies, Airlines, Insurance companies, Consultancy services, banks etc are some other areas where one can find jobs, apart from retail shops. One can even start one’s own business and be an entrepreneur.
Interesting Facts on Retailing:
- Every 10th billionaire is a retailer.
- 25 of the top 50 Fortune 500 companies are in Retail.
- In India the Retailing Industry provides employment to over 18 m people, second largest after agriculture.
- 1 out of every 25 families in India are engaged in the business of retailing
- In India per Capital square feet area under retail is just 2 sq. ft. or 0.2 sq. m.
5 Things to Know About a Retail Management Career
Source – By DarkEvil / Wikimedia
If you want to build your career in retail industry and are specifically on the path to becoming a retail manager or simply considering it, here are some essential and interesting things to reflect before embarking upon a retail management career.
1. Right Personality
You should have all but maximum of the attributes to become a successful retail manager. You can compare your qualities to the ones listed below and check do you fulfill the personality requirement to be a good retail manager.
- Ability to motivate, train and develop others
- Strong customer service skills
- Natural leader
- Good communicator
- Good listener
- Strong negotiator
2. It is not just sales
Retail managers rule over whole of the store and not just the sales department. Everything happening in the store is your responsibility and hence it is imperative that it should be under your surveillance.
Retail manager is concerned with behind the scenes tasks too, such as merchandising, product display, inventory and buying. Some of the common tasks which are foreseeable as a manager are:
- Hiring, managing and motivating your employees to increase sales
- Creating and maintaining store displays
- Developing and executing sales and promotions
- Watching market trends and planning next strategy.
- Monitoring sales figures and forecasting future sales volumes, and meeting sales quotas
- Dealing with questions, complaints, and feedback from customers
- Monitoring budgets, controlling expenses, and maximizing profits.
3. Growth comes with experience
It is usually tough job for a fresher to give extremely stunning results as retail management is a game of experience and fresher is new to it and doesn’t understand the core reality of market. The most highlighting quotient of your CV / resume is your experience level.
4. No compulsion for a college degree
As I said in the previous point, the leading factor for a good manager is experience; it takes over all the factors. It is the most dominant factor, dominating to having a college degree. Although having a degree would definitely help you in landing for the job faster.
5. Customer service is supreme
A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work. He is the purpose of it. He is not an outsider of our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us the opportunity to do so – M.K Gandhi
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