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Retail, retailing and retailer are commonly used terms. However, do you know what they mean? This article will explain the meaning of retail and retailer along with examples.

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What is retail and retailer?

What is retail? The definition of retail is the sale of goods and/or services directly to end consumers for their consumption.

Who is a retailer? A retailer is a person/business owner who sells goods and services directly to the end user through his/her retail business.

Features of retail

Here are some of the main features of the retail business:

  • Connect with the customers: Unlike a B2B business, a retail business has a direct connection with consumers as they sell goods and services directly to end users for their consumption.
  • Smaller quantity: As the customer is an end user, he/she buys only to fulfill their requirements. As a result, quantities sold to each customer are lesser.
  • Relationship with customers: Retailers need to develop strong relationships with their customers. This is achieved through reward points, discounts for loyalty and membership, and so on.
  • Point of purchase display: Point of purchase displays and promotions is extremely important as it helps customers to find what they are looking for.
  • Minimal inventory management: As compared to a wholesaler, a retail store stocks limited amount of goods and hence the scope of inventory management is limited.

Examples of retail companies

  • Avenue Supermarkets (DMart)
  • Reliance Retail (Reliance Trends, Reliance Digital, Reliance Footwear, etc.)
  • Aditya Birla Fashion & Retail Ltd (Louis Philippe, Van Heusen, Allen Solly, Pantaloons, etc.)
  • Future Group (Brand Factory, Central, etc.)
  • Trent Company (Westside, Zudio, Star Bazar, etc.)
  • Titan Company (Titan Watches, Titan EyePlus, Tanishq, CaratLane, etc.)
  • Reymond Group (Raymond, Park Avenue, etc.)
  • Godrej (Natures Basket, Godrej Interio, etc.)

Process of a retail business

Here is a process of retail business

  • The retailer buys goods from the wholesaler/manufacturer.
  • Stocks goods in the store as per requirement
  • Customers buy them
  • The retailer reorders required quantity

Types and examples of retail business

Broadly speaking, there are two types of retail business store retailing and non-store retailing.

What is store retailing?

Store retailing means that goods are sold in a physical or brick-and-mortar store. A grocery store around the corner can be a classic example of store retailing. However, that’s not it. Store retailing can further be classified into the following types:

Type of store retailing Definition Examples of stores
Departmental store The departmental store is big in size and goods are stacked in a departmentalised manner
  • Dmart
  • Westside
  • Reliance Trends
  • Vijay Sales
  • Shopper Stop
  • Decathlon
  • Star Bazar
Specialty Store Specialty retail stores specialise in one or only a few types of products such as clothing, footwear, electronics, etc.
  • Bata (footwear)
  • Reliance Jewel (jewellery)
  • Kohinoor Electronics (electronics)
  • Starbucks (Coffee)
  • Happy Feet (socks)
  • Hamleys (toys)
  • Decathlon (sports needs)
  • Crossword (books)
Convenience store A convenience store is a local store that stocks goods for everyday household needs.
  • 7-Eleven
  • Smart Bazar

 

Dealership A retailer takes a dealership of a popular manufacturer and sells their products in their showroom. This model is more popular in the automobile business.
  • Sai Service (Dealership of Maruti Suzuki, KTM, etc.)
  • Group Landmark (Honda, Volkswagen, Mercedes, Ashok Leyland, Jeep, Renault, etc.)
  • Prem Motors (Dealership Group of Maruti Suzuki)
Franchise When a retailer has an official license to sell goods and services in the name of a franchisor.
  • MacDonald’s
  • Subway
  • Eurokids
  • Burger King
  • Amul Ice-cream
  • Domino’s
  • VLCC
  • Lakme Salon

 

What is non-store retailing?

Non-store retailing is a business model where the retailer does not have any brick-and-mortar stores. These kinds of non-store retail businesses sell their products through the following methods:

Retail e-commerce:

There are quite a few companies that cater to the end consumer through e-commerce. While the universe of e-commerce companies includes B2B as well as retail, examples of e-commerce retail companies include:

  • Amazon
  • Flipkart
  • Urban Company
  • FirstCry
  • Nykaa
  • OLX

Direct sales:

Direct sales usually happen through door-to-door sales, telemarketing or any other method of direct selling. Some examples of direct selling companies include:

  • Amway
  • Avon
  • Tupperware

Other ways

Some of the other methods of non-store retailing include:

  • Vending machines
  • Catalogue sales
  • Sales on social media, etc.

Difference between store retailing and non-store retailing

Here are the key differences between store retailing and non-store retailing.

Store retailing Non-store retailing
Brick-and-mortar Store-retailing means the business sells goods and services through a physical store. Non-store retailing does not have a physical store.
Human interaction The customer speaks to the consumer face-to-face. There is no or minimal human interaction.
Shipping cost Shipping cost is not involved. Shipping cost is involved.
Convenience Customers will have to step out to buy goods. It gives convenience to customers to buy goods from the comfort of their homes and get them delivered.
Cost Store rent, utility bills, maintenance, etc., add up to the cost. Since there is no physical store, the business saves the cost of rent and other utilities.

Concluding remarks

If you are planning to establish a retail business, you need to consider the following:

  • Determine if you want to establish a store retailing business or a non-store retailing business. Both have their advantages and disadvantages.
  • Analyse and understand your skills and expertise. For example, if your expertise is in automobiles, you can consider establishing an auto related business such as a dealership for a car company, selling auto accessories, etc.
  • Calculate the funds you need for establishing your business. This will be useful in case you are looking for a business loan.
  • Create a business plan. This will act as a guide for your business as well as project report can help get a business loan too.
  • Decide on marketing channels. In case you plan to establish a store retailing business, marketing efforts need to be more localised while for a non-store retailing business, you need to target the right audience.
  • Nowadays, many retailers opt for multi-channel retailing. Meaning you can establish a physical store as well as an online store for the convenience of your customers.

Frequently asked questions

What is the difference between B2B and retail business?

One of the key differences between the B2B and retail business is the customer base. B2B’s customer base is other businesses while B2C or retail businesses cater to the end consumers.

What are types of retailing?

Broadly, there are two types of retailing – store retailing (brick-and-mortar) and non-store retailing (online and direct selling).

Are retailers considered MSMEs?

Yes. According to the revisions made in the MSME Development Act, retailers are considered as MSMEs and can take advantage of all the benefits and schemes applicable to MSMEs.

Swati Deshpande

Swati is a passionate content writer with 6 years of experience crafting content for the business and manufacturing sectors, and helping MSMEs (Micro, Small and Medium Enterprises) navigate complexities in steel procurement, and business services. Her clear and informative writing empowers MSMEs to make informed decisions and thrive in the competitive landscape.