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Functions Performed By Retailers

Tags: retailers

Why do we need retailer? Won’t it be easier and economical to buy directly from companies that manufacture the products? Most of us will generally answer “No”.

Although there are situations in which it is easier and cheaper to buy right from manufactures, like from a local farmer’s market, from Dell Computer or from apple iPhone store.

Retailers contribute important functions which increase the worth of the products and services they provide to consumers and facilitate the distribution of those products and services for those who produce them.

These worth-creating functions are :

  1. Providing a collection of products and services.
  2. Breaking bulk.
  3. Holding Inventory.
  4. Providing services.

Providing Collection

Supermarkets usually carry 20,000 to 35,000 different items made by more than 500 companies. Offering a collection enables their customers to choose from a wide selection of brands, designs, sizes, colours, and prices at one location. Manufacturers specialize in generating specific types of products. For examples, Campbell makes soup, Amul makes dairy products, and Kellogg makes breakfast cereals.

If each of these manufacturers had its own stores that only said its own products, it would be a pain for consumers to go to various stores to buy the groceries needed to prepare a single meal.

All retailers offer group of products, buy they specialize in the assortments they offer. Hypermarkets provide collections of food, health, clothes, beauty care, and household products, while Abercrombie Fitch provides assortments of clothing and accessories.

Most consumers have sound knowledge of the product assortments retailer offer; even children tend to know where to buy different types of products (yeah, kids are really smart these days). But new types of retailers offering unique assortments appear each year.


The word retail is derived from the French word retailer, meaning to cut a piece or to break bulk.

Breaking Bulk

To minimize transportation cost, manufacturers and wholesalers typically ship cases of frozen dinners or cartoons of T-shirts to retailers. Retailers then separate the products in smaller quantities and tailor them to individual consumers’ and households’ consumption patterns. This is called breaking the bulk.

Breaking bulk is cost-effective for manufacturers to package and ship merchandise in huge, rather than smaller quantities. Consumers’ purchases merchandise in smaller, more manageable quantities always.

Holding Inventory

A major function of retailers is to keep inventory which is already broken into user-friendly sizes so that products will be available when their consumers want them. Thus, consumers can keep a small inventory of products at home because they know local retailer will have the products available when they need more.

By maintaining an inventory, retailers provide a benefit to consumers; they reduce the consumers’ cost of storing products. This is particularly important to consumers with limited storage space and who want to purchase perishable merchandise like meat and produce.

Providing Services

Retailers provide services that make it easier for customers to purchase a product and make better use of them. Many retailers also offer credits to the consumers. So it makes easy for the consumer to buy that product now and pay for it later.

They display products so that consumers can see and also get attracted to it and test them before buying. Some retailers have employed salespeople in stores or use their website and forums to answer questions and provide additional information about products.

Escalating the Worth of Products and Services

By providing collections, breaking bulk, holding inventory, and providing services, retailers increase the worth which their consumers receive from their products and services. To illustrate this scene, consider a door in a shipping crate in a Philips manufacturer’s warehouse.

The door can’t satisfy the needs of a do-it-yourself (DIY) who want to change a closet door today. For the DIYer, a conveniently located home improvement centre like Home Depot or Philips’s offers one door that is available when the DIYer wants it.

The home improvement centre assists and helps the customer select the door by showing door to the customer so they can be examined before it is purchased. An employee is available to explain which door is best for closets and how the door should be hung, with all the technical expertise required to install a door. The centre also has a collection of hardware, paint, and tools that the DIYer will need to complete the job. This way, retailers increase the worth of products and services bought by their customers.

Also Read – A Definitive Guide to loyalty program

Key Concerns of a Retailer

Retailers store display

Everybody wants to succeed in their endeavor but the success depends on a lot of factor. When it comes to retailing, a retailer strives for success and has many concerns regarding his business.

Here is a list of key concerns of a retailer:

1. Traffic Building

By traffic, here it is meant the number of people/customer visiting your store. Traffic building is an important aspect for any business and so is retailing. Retailers use lot of promotional techniques to attract customers, advertisement being the most common platform for promotion. Many other such techniques such are used to promote retailing business.

2. Customer Satisfaction

Customer satisfaction tops the priority for any retailer. If a customer isn’t happy, he can potentially ruin other customers also. Customer satisfaction is of utmost importance to a retailer. A retailer always wants to keep his customer engaged with his store and strives to keep him coming back to his store.

Customer loyalty brings a retailer immense benefits, be it in terms of profits or word of mouth promotion. Unsatisfied customer is a worst nightmare of a retailer.

3. Stock control

Stock control and supply chain management is getting more complex with time. With huge range and variety of available products things are getting messed up and it has become a headache for the managers to check the proper functioning and stocks in the stores. Shrinkage and fraud are also the concerns for retailers

4. Location

Location of any business has drastic impact on its business. It is always desirable to choose a store which is closer to the targeted customer and is at a wonderful location. Definition for a wonderful would be: the location where the store gets high visibility and easy access for the customer to approach,

5. Product presentation

Products should be merchandised or presented in such a way which attracts customer towards it and generates interest. Improper placement of products imparts negative impression in the customer. For retail presentation, the concerned employee should have great creativity skills and understanding to connect with market and customer’s needs.

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Functions Performed By Retailers


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