Retail is the sale of

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not t ...

and

services Service may refer to: Activities * Administrative service, a required part of the workload of university faculty * Civil service, the body of employees of a government * Community service, volunteer service for the benefit of a community or a p ...

consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

s, in contrast to

wholesaling Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...

, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and then sells in smaller quantities to consumers for a profit. Retailers are the final link in the supply chain from producers to consumers. Retail markets and shops have a very ancient history, dating back to antiquity. Some of the earliest retailers were itinerant

peddler A peddler, in British English pedlar, also known as a chapman, packman, cheapjack, hawker, higler, huckster, (coster)monger, colporteur or solicitor, is a door-to-door and/or travelling vendor of goods. In England, the term was mostly used f ...

s. Over the centuries, retail shops were transformed from little more than "rude booths" to the sophisticated shopping malls of the modern era. In the

digital age The Information Age (also known as the Computer Age, Digital Age, Silicon Age, or New Media Age) is a historical period that began in the mid-20th century. It is characterized by a rapid shift from traditional industries, as established during t ...

, an increasing number of retailers are seeking to reach broader markets by selling through multiple channels, including both

bricks and mortar Bricks and Mortar (foaled March 2, 2014) is an American Thoroughbred racehorse who was named the American Horse of the Year in 2019. After winning four of six starts at age three, he missed most of his four-year-old campaign due to illness. At a ...

and online retailing. Digital technologies are also affecting the way that

s pay for goods and services. Retailing support services may also include the provision of credit, delivery services, advisory services, stylist services and a range of other supporting services. Most modern retailers typically make a variety of strategic level decisions including the type of store, the

market Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an ...

to be served, the optimal

product Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set of deliverables that contribute to a business solution Mathematics * Produ ...

assortment,

customer service Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...

, supporting services, and the store's overall market positioning. Once the strategic retail plan is in place, retailers devise the retail mix which includes product, price, place, promotion, personnel, and presentation.

Etymology

The word ''retail'' comes from the

Old French Old French (, , ; Modern French: ) was the language spoken in most of the northern half of France from approximately the 8th to the 14th centuries. Rather than a unified language, Old French was a linkage of Romance dialects, mutually intellig ...

verb ''tailler'', meaning "to cut off, clip, pare, divide in terms of tailoring" (c. 1365). It was first recorded as a noun in 1433 with the meaning of "a sale in small quantities" from the

Middle French Middle French (french: moyen français) is a historical division of the French language that covers the period from the 14th to the 16th century. It is a period of transition during which: * the French language became clearly distinguished from ...

verb ''retailler'' meaning "a piece cut off, shred, scrap, paring". At the present, the meaning of the word ''retail'' (in English, French, Dutch, German and Spanish) refers to the sale of small quantities of items to consumers (as opposed to

wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...

Definition and explanation

Retail refers to the activity of selling goods or services directly to consumers or end-users. Some retailers may sell to business customers, and such sales are termed ''non-retail activity.'' In some jurisdictions or regions, legal definitions of retail specify that at least 80 percent of sales activity must be to end-users. Retailing often occurs in retail stores or service establishments, but may also occur through direct selling such as through vending machines, door-to-door sales or electronic channels. Although the idea of retail is often associated with the purchase of goods, the term may be applied to service providers that sell to consumers. Retail service providers include retail banking, tourism, insurance, private healthcare, private education, private security firms, legal firms, publishers, public transport, and others. For example, a tourism provider might have a retail division that books travel and accommodation for consumers plus a wholesale division that purchases blocks of accommodation, hospitality, transport, and sightseeing which are subsequently packaged into a holiday tour for sale to retail travel agents. Some retailers badge their stores as "wholesale outlets" offering "wholesale prices." While this practice may encourage consumers to imagine that they have access to lower prices, while being prepared to trade-off reduced prices for cramped in-store environments, in a strictly legal sense, a store that sells the majority of its merchandise direct to consumers, is defined as a retailer rather than a wholesaler. Different jurisdictions set parameters for the ratio of consumer to business sales that define a retail business.

History

Retail markets have existed since ancient times. Archaeological evidence for trade, probably involving barter systems, dates back more than 10,000 years. As civilizations grew, barter was replaced with retail trade involving coinage. Selling and buying are thought to have emerged in Asia Minor (modern Turkey) in around the 7th-millennium BCE. In

ancient Greece Ancient Greece ( el, Ἑλλάς, Hellás) was a northeastern Mediterranean Sea, Mediterranean civilization, existing from the Greek Dark Ages of the 12th–9th centuries BC to the end of Classical Antiquity, classical antiquity ( AD 600), th ...

, markets operated within the agora, an open space where, on market days, goods were displayed on mats or temporary stalls. In

ancient Rome In modern historiography, ancient Rome refers to Roman civilisation from the founding of the city of Rome in the 8th century BC to the collapse of the Western Roman Empire in the 5th century AD. It encompasses the Roman Kingdom (753–509 BC ...

, trade took place in the forum. The Roman forum was arguably the earliest example of a permanent retail shop-front. Recent research suggests that China exhibited a rich history of early retail systems. From as early as 200 BCE, Chinese packaging and branding were used to signal family, place names and product quality, and the use of government imposed product branding was used between 600 and 900 CE. Eckhart and Bengtsson have argued that during the Song Dynasty (960–1127), Chinese society developed a consumerist culture, where a high level of consumption was attainable for a wide variety of ordinary consumers rather than just the elite. In

Medieval England England in the Middle Ages concerns the history of England during the medieval period, from the end of the 5th century through to the start of the Early Modern period in 1485. When England emerged from the collapse of the Roman Empire, the econ ...

and

Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a subcontinent of Eurasia and it is located entirel ...

, relatively few permanent shops were to be found; instead, customers walked into the tradesman's workshops where they discussed purchasing options directly with tradesmen. In the more populous cities, a small number of shops were beginning to emerge by the 13th century. Outside the major cities, most consumable purchases were made through markets or fairs. Market-places appear to have emerged independently outside Europe. The Grand Bazaar in

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is often cited as the world's oldest continuously operating market; its construction began in 1455. The Spanish conquistadors wrote glowingly of markets in the Americas. In the 15th century, the Mexica (

Aztec The Aztecs () were a Mesoamerican culture that flourished in central Mexico in the post-classic period from 1300 to 1521. The Aztec people included different ethnic groups of central Mexico, particularly those groups who spoke the Nahuatl ...

) market of Tlatelolco was the largest in all the

Americas The Americas, which are sometimes collectively called America, are a landmass comprising the totality of North and South America. The Americas make up most of the land in Earth's Western Hemisphere and comprise the New World. Along with th ...

By the 17th century, permanent shops with more regular trading hours were beginning to supplant markets and fairs as the main retail outlet. Provincial shopkeepers were active in almost every English market town. As the number of shops grew, they underwent a transformation. The trappings of a modern shop, which had been entirely absent from the sixteenth- and early seventeenth-century store, gradually made way for store interiors and shopfronts that are more familiar to modern shoppers. Prior to the eighteenth century, the typical retail store had no counter, display cases, chairs, mirrors, changing rooms, etc. However, the opportunity for the customer to browse merchandise, touch and feel products began to be available, with retail innovations from the late 17th and early 18th centuries. By the late 18th century, grand shopping arcades began to emerge across Europe and in the Antipodes. A shopping arcade refers to a multiple-vendor space, operating under a covered roof. Typically, the roof was constructed of glass to allow for natural light and to reduce the need for candles or electric lighting. Some of the earliest examples of shopping arcade appeared in Paris, due to its lack of pavement for pedestrians.Conlin, J., ''Tales of Two Cities: Paris, London and the Birth of the Modern City'', Atlantic Books, 2013, Chapter 2 While the arcades were the province of the bourgeoisie, a new type of retail venture emerged to serve the needs of the working poor. John Stuart Mill wrote about the rise of the co-operative retail store, which he witnessed first-hand in the mid-nineteenth century. AA446b copy

The modern era of retailing is defined as the period from the industrial revolution to the 21st century. In major cities, the

department store A department store is a retail establishment offering a wide range of consumer goods in different areas of the store, each area ("department") specializing in a product category. In modern major cities, the department store made a dramatic app ...

emerged in the mid- to late 19th century, and permanently reshaped shopping habits, and redefined concepts of service and luxury. Many of the early department stores were more than just a retail emporium; rather they were venues where shoppers could spend their leisure time and be entertained. Retail, using mail order, came of age during the mid-19th century. Although catalogue sales had been used since the 15th century, this method of retailing was confined to a few industries such as the sale of books and seeds. However, improvements in transport and postal services led several entrepreneurs on either side of the Atlantic to experiment with catalogue sales. In the post-war period, an American architect,

Victor Gruen Victor David Gruen, born Viktor David Grünbaum
retrieved 25 February 2012 (July 18, 1903 – February 1 ...

developed a concept for a shopping mall; a planned, self-contained shopping complex complete with an indoor plaza, statues, planting schemes, piped music, and car-parking. Gruen's vision was to create a shopping atmosphere where people felt so comfortable, they would spend more time in the environment, thereby enhancing opportunities for purchasing. The first of these malls opened at Northland Mall near Detroit in 1954.Malcolm Gladwell
The Terrazzo Jungle
''The New Yorker'', March 15, 2004 Throughout the twentieth century, a trend towards larger store footprints became discernible. The average size of a U.S. supermarket grew from square feet in 1991 to square feet in 2000. By the end of the twentieth century, stores were using labels such as "mega-stores" and "warehouse" stores to reflect their growing size. The upward trend of increasing retail space was not consistent across nations and led in the early 21st century to a 2-fold difference in square footage per capita between the United States and Europe. As the 21st century takes shape, some indications suggest that large retail stores have come under increasing pressure from online sales models and that reductions in store size are evident. Under such competition and other issues such as business debt, there has been a noted business disruption called the

retail apocalypse A retail apocalypse is the closing of numerous brick-and-mortar retail stores, especially those of large chains worldwide. It began around 2010, and was severely exacerbated by the mandatory closures during the COVID-19 pandemic. In 2017, over ...

in recent years which several retail businesses, especially in North America, are sharply reducing their number of stores, or going out of business entirely.

Retail strategy

The distinction between "strategic" and "managerial" decision-making is commonly used to distinguish "two phases having different goals and based on different conceptual tools. Strategic planning concerns the choice of policies aiming at improving the competitive position of the firm, taking account of challenges and opportunities proposed by the competitive environment. On the other hand, managerial decision-making is focused on the implementation of specific targets." In retailing, the strategic plan is designed to set out the

vision Vision, Visions, or The Vision may refer to: Perception Optical perception * Visual perception, the sense of sight * Visual system, the physical mechanism of eyesight * Computer vision, a field dealing with how computers can be made to gain un ...

and provide guidance for retail decision-makers and provide an outline of how the product and service mix will optimize customer satisfaction. As part of the strategic planning process, it is customary for strategic planners to carry out a detailed environmental scan which seeks to identify trends and opportunities in the competitive environment, market environment, economic environment and statutory-political environment. The retail strategy is normally devised or reviewed every 3– 5 years by the chief executive officer. The profit margins of retailers depend largely on their ability to achieve market competitive transaction costs. The strategic retail analysis typically includes following elements: Lanvin Monte Carlo 2004

* Market analysis – Market size, stage of market, market competitiveness, market attractiveness, market trends * Customer analysis –

Market segmentation In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as ''segments'') based on some type of shared characte ...

, demographic, geographic and psychographic profile, values and attitudes, shopping habits, brand preferences, analysis of needs and wants, media habits * Internal analysis – Other capabilities e.g. human resource capability, technological capability, financial capability, ability to generate scale economies or

economies of scope Economies of scope are "efficiencies formed by variety, not volume" (the latter concept is "economies of scale"). In economics, "economies" is synonymous with cost savings and "scope" is synonymous with broadening production/services through div ...

, trade relations, reputation, positioning, past performance * Competition analysis – Availability of substitutes, competitor's strengths and weaknesses, perceptual mapping, competitive trends * Review of product mix – :: Sales per square foot, stock-turnover rates, profitability per product line * Review of distribution channels – Lead-times between placing order and delivery, cost of distribution, cost efficiency of intermediaries * Evaluation of the economics of the strategy – Cost-benefit analysis of planned activities At the conclusion of the retail analysis, retail marketers should have a clear idea of which groups of customers are to be the target of marketing activities. Not all elements are, however, equal, often with demographics, shopping motivations, and spending directing consumer activities. Retail research studies suggest that there is a strong relationship between a store's positioning and the socio-economic status of customers. In addition, the retail strategy, including service quality, has a significant and positive association with customer loyalty. A marketing strategy effectively outlines all key aspects of firms' targeted audience, demographics, preferences. In a highly competitive market, the retail strategy sets up long-term sustainability. It focuses on customer relationships, stressing the importance of added value, customer satisfaction and highlights how the store's market positioning appeals to targeted groups of customers.

Retail marketing

A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation (also known as physical evidence). The retail mix is loosely based on the

marketing mix The term "marketing mix" is a foundation model for businesses, historically centered around product, price, place, and promotion (also known as the "4 Ps"). The marketing mix has been defined as the "set of marketing tools that the firm uses to ...

, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, ''Personnel'' and ''Presentation'' since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the ''Retail Format'' (i.e. retail formula) should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the ''6 Ps of retailing'' (see diagram at right). Supermarket full of goods

The primary product-related decisions facing the retailer are the product assortment (what product lines, how many lines and which brands to carry); the type of customer service (high contact through to self-service) and the availability of support services (e.g. credit terms, delivery services, after sales care). These decisions depend on careful analysis of the market, demand, competition as well as the retailer's skills and expertise.

Customer service Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...

is the "sum of acts and elements that allow consumers to receive what they need or desire from heretail establishment." Retailers must decide whether to provide a full service outlet or minimal service outlet, such as no-service in the case of vending machines; self-service with only basic sales assistance or a full service operation as in many boutiques and speciality stores. In addition, the retailer needs to make decisions about sales support such as customer delivery and after sales customer care. Souvenir

Place decisions are primarily concerned with consumer access and may involve location, space utilisation and operating hours. Retailers may consider a range of both qualitative and quantitative factors to evaluate to potential sites under consideration. Macro factors include market characteristics (demographic, economic and socio-cultural), demand, competition and infrastructure (e.g. the availability of power, roads, public transport systems). Micro factors include the size of the site (e.g. availability of parking), access for delivery vehicles. A major retail trend has been the shift to multi-channel retailing. To counter the disruption caused by online retail, many bricks and mortar retailers have entered the online retail space, by setting up online catalogue sales and

e-commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain manageme ...

websites. However, many retailers have noticed that consumers behave differently when shopping online. For instance, in terms of choice of online platform, shoppers tend to choose the online site of their preferred retailer initially, but as they gain more experience in online shopping, they become less loyal and more likely to switch to other retail sites.

Online stores Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the r ...

are usually available 24 hours a day, and many consumers across the globe have Internet access both at work and at home. Fan-Tankstelle von Dynamo Dresden

The broad

pricing strategy A business can use a variety of pricing strategies when selling a product (business), product or Service (economics), service. To determine the most effective pricing strategy for a company, senior executives need to first identify the company's p ...

is normally established in the company's overall strategic plan. In the case of chain stores, the pricing strategy would be set by head office. Broadly, there are six approaches to pricing strategy mentioned in the marketing literature: operations-oriented,Dibb, S., Simkin, L., Pride, W.C. and Ferrell, O.C., ''Marketing: Concepts and Strategies'', Cengage, 2013, Chapter 12 revenue-oriented, customer-oriented, value-based, relationship-oriented, and socially-oriented. When decision-makers have determined the broad approach to pricing (i.e., the pricing strategy), they turn their attention to pricing tactics. Tactical pricing decisions are shorter term prices, designed to accomplish specific short-term goals. Pricing tactics that are commonly used in retail include discount pricing,Rao, V.R. and Kartono, B., "Pricing Strategies and Objectives: A Cross-cultural Survey", in ''Handbook of Pricing Research in Marketing'', Rao, V.R. (ed), Northampton, MA, Edward Elgar, 2009, p. 15

everyday low price Everyday low price (also abbreviated as EDLP) is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping. EDLP saves retail stores the effort and expense needed to mark down prices ...

s, high-low pricing,

loss leader A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion/marketing strategy, a "leader" is any popular articl ...

product bundling In marketing, product bundling is offering several products or services for sale as one combined product or service package. It is a common feature in many imperfectly competitive product and service markets. Industries engaged in the practice ...

, promotional pricing, and psychological pricing. Retailers must also plan for customer preferred payment modes – e.g. cash, credit, lay-by, Electronic Funds Transfer at Point-of-Sale (EFTPOS). All payment options require some type of handling and attract costs. Contrary to

common misconception Each entry on this list of common misconceptions is worded as a correction; the misconceptions themselves are implied rather than stated. These entries are concise summaries of the main subject articles, which can be consulted for more detail. ...

, price is not the most important factor for consumers, when deciding to buy a product. Mcdonald's - panoramio

Because patronage at a retail outlet varies, flexibility in

scheduling A schedule or a timetable, as a basic time-management tool, consists of a list of times at which possible task (project management), tasks, events, or actions are intended to take place, or of a sequence of events in the chronological order ...

is desirable.

Employee scheduling software Employee scheduling software automates the process of creating and maintaining a schedule. Automating the scheduling of employees increases productivity and allows organizations with hourly workforces to re-allocate resources to non-scheduling acti ...

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 Part-time can refer to: * Part-time job, a job that has fewer hours a week than a full-time job * Part-time student, a student, usually in higher education, who takes fewer course credits than a full-time student * Part Time Part Time (styliz ...

workers The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic regio ...

; 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. Retailers can employ different techniques to enhance sales volume and to improve the customer experience, such as Add-on, Upsell or Cross-sell; Selling on value; and knowing when to close the sale. Transactional marketing aims to find target consumers, then negotiate, trade, and finally end relationships to complete the transaction. In this one-time transaction process, both parties aim to maximize their own interests. As a result, transactional marketing raises follow-up problems such as poor after-sales service quality and a lack of feedback channels for both parties. In addition, because retail enterprises needed to redevelop client relationships for each transaction, marketing costs were high and customer retention was low. All these downsides to transactional marketing gradually pushed the retail industry towards establishing long-term cooperative relationships with customers. Through this lens, enterprises began to focus on the process from transaction to relationship. While expanding the sales market and attracting new customers is very important for the retail industry, it is also important to establish and maintain long term good relationships with previous customers, hence the name of the underlying concept, "relational marketing". Under this concept, retail enterprises value and attempt to improve relationships with customers, as customer relationships are conducive to maintaining stability in the current competitive retail market, and are also the future of retail enterprises. Harrods Food Department Halls (8473364801)

Harrods Food Department Halls (8473364801)

Presentation refers to the physical evidence that signals the retail image. Physical evidence may include a diverse range of elements – the store itself including premises, offices, exterior facade and interior layout, websites, delivery vans, warehouses, staff uniforms. The environment in which the retail service encounter occurs is sometimes known as the ''retail servicescape.'' The store environment consists of many elements such as smells, the physical environment (furnishings, layout and functionality), ambient conditions (lighting, temperature, noise) as well as signs, symbols and artifacts (e.g. sales promotions, shelf space, sample stations, visual communications). Retail designers pay close attention to the front of the store, which is known as the ''decompression zone''. In order to maximise the number of selling opportunities, retailers generally want customers to spend more time in a retail store. However, this must be balanced against customer expectations surrounding convenience, access and realistic waiting times. The way that brands are displayed is also part of the overall retail design. Where a product is placed on the shelves has implications for purchase likelihood as a result of visibility and access. Ambient conditions, such as lighting, temperature and music, are also part of the overall retail environment.Bailey, P. (2015, April). Marketing to the senses: A multisensory strategy to align the brand touchpoints. Admap, 2–7. It is common for a retail store to play music that relates to their target market.

Shopper profiles

Two different strands of research have investigated shopper behaviour. One is primarily concerned with shopper motivations. The other stream of research seeks to segment shoppers according to common, shared characteristics. To some extent, these streams of research are inter-related, but each stream offers different types of insights into shopper behaviour. Babin et al. carried out some of the earliest investigations into shopper motivations and identified two broad motives: ''utilitarian'' and ''hedonic.'' Utilitarian motivations are task-related and rational. For the shopper with utilitarian motives, purchasing is a work-related task that is to be accomplished in the most efficient and expedient manner. On the other hand, hedonic motives refer to pleasure. The shopper with hedonic motivations views shopping as a form of escapism where they are free to indulge fantasy and freedom. Hedonic shoppers are more involved in the shopping experience. Many different shopper profiles can be identified. Retailers develop customised segmentation analyses for each unique outlet. However, it is possible to identify a number of broad shopper profiles. One of the most well-known and widely cited shopper typologies is that developed by Sproles and Kendal in the mid-1980s. Sproles and Kendall's consumer typology has been shown to be relatively consistent across time and across cultures. Their typology is based on the consumer's approach to making purchase decisions. * Quality conscious/Perfectionist: Quality-consciousness is characterised by a consumer's search for the very best quality in products; quality conscious consumers tend to shop systematically making more comparisons and shopping around. * Brand-conscious: Brand-consciousness is characterised by a tendency to buy expensive, well-known brands or designer labels. Those who score high on brand-consciousness tend to believe that the higher prices are an indicator of quality and exhibit a preference for department stores or top-tier retail outlets. * Recreation-conscious/Hedonistic: Recreational shopping is characterised by the consumer's engagement in the purchase process. Those who score high on recreation-consciousness regard shopping itself as a form of enjoyment. * Price-conscious: A consumer who exhibits price-and-value consciousness. Price-conscious shoppers carefully shop around seeking lower prices, sales or discounts and are motivated by obtaining the best value for money * Novelty/fashion-conscious: characterised by a consumer's tendency to seek out new products or new experiences for the sake of excitement; who gain excitement from seeking new things; they like to keep up-to-date with fashions and trends, variety-seeking is associated with this dimension. * Impulsive: Impulsive consumers are somewhat careless in making purchase decisions, buy on the spur of the moment and are not overly concerned with expenditure levels or obtaining value. Those who score high on impulsive dimensions tend not to be engaged with the object at either a cognitive or emotional level. * Confused (by

overchoice Overchoice or choice overload is a cognitive impairment in which people have a difficult time making a decision when faced with many options. The term was first introduced by Alvin Toffler in his 1970 book, ''Future Shock''.Thomas W. Simon, ''Demo ...

): characterised by a consumer's confusion caused by too many product choices, too many stores or an overload of product information; tend to experience information overload. * Habitual/brand loyal: characterised by a consumer's tendency to follow a routine purchase pattern on each purchase occasion; consumers have favourite brands or stores and have formed habits in choosing; the purchase decision does not involve much evaluation or shopping around. Some researchers have adapted Sproles and Kendall's methodology for use in specific countries or cultural groups. Consumer decision styles are important for retailers and marketers because they describe behaviours that are relatively stable over time and for this reason, they are useful for market segmentation.

Types of retail outlets

''Retail formats'' (also known as ''retail formulas'') influence the consumer's store choice and addresses the consumer's expectations. At its most basic level, a retail format is a simple

marketplace A marketplace or market place is a location where people regularly gather for the purchase and sale of provisions, livestock, and other goods. In different parts of the world, a marketplace may be described as a '' souk'' (from the Arabic), ' ...

, that is; a location where goods and services are exchanged. In some parts of the world, the retail sector is still dominated by small family-run stores, but large retail chains are increasingly dominating the sector, because they can exert considerable buying power and pass on the savings in the form of lower prices. Many of these large retail chains also produce their own private labels which compete alongside manufacturer brands. Considerable consolidation of retail stores has changed the retail landscape, transferring power away from wholesalers and into the hands of the large retail chains. In Britain and Europe, the retail sale of goods is designated as a '' service activity.'' The European Service Directive applies to all retail trade including periodic markets, street traders and peddlers. Retail stores may be classified by the type of product carried. Softline retailers sell goods that are consumed after a

single-use A disposable (also called disposable product) is a product designed for a single use after which it is recycled or is disposed as solid waste. The term is also sometimes used for products that may last several months (e.g. disposable air filter ...

, or have a limited life (typically under three years) in they are normally consumed. Soft goods include

clothing Clothing (also known as clothes, apparel, and attire) are items worn on the body. Typically, clothing is made of fabrics or textiles, but over time it has included garments made from animal skin and other thin sheets of materials and natural ...

, other

fabrics Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...

footwear Footwear refers to garments worn on the feet, which typically serves the purpose of protection against adversities of the environment such as wear from ground textures and temperature. Footwear in the manner of shoes therefore primarily serves th ...

toiletries Personal care or toiletries are consumer products used in personal hygiene, personal grooming or for beautification. Products Personal care includes products as diverse as cleansing pads, colognes, cotton swabs, cotton pads, deodorant, eye lin ...

cosmetics Cosmetics are constituted mixtures of chemical compounds derived from either natural sources, or synthetically created ones. Cosmetics have various purposes. Those designed for personal care and skin care can be used to cleanse or protect ...

medicines A medication (also called medicament, medicine, pharmaceutical drug, medicinal drug or simply drug) is a drug used to diagnose, cure, treat, or prevent disease. Drug therapy (pharmacotherapy) is an important part of the medical field and rel ...

and

stationery Stationery refers to commercially manufactured writing materials, including cut paper, envelopes, writing implements, continuous form paper, and other office supplies. Stationery includes materials to be written on by hand (e.g., letter paper) ...

Grocery store A grocery store ( AE), grocery shop ( BE) or simply grocery is a store that primarily retails a general range of food products, which may be fresh or packaged. In everyday U.S. usage, however, "grocery store" is a synonym for supermarket, a ...

s, including

supermarkets A supermarket is a self-service shop offering a wide variety of food, beverages and household products, organized into sections. This kind of store is larger and has a wider selection than earlier grocery stores, but is smaller and more limit ...

and

hypermarkets A hypermarket (sometimes called a hyperstore, supercentre or superstore) is a big-box store combining a supermarket and a department store. The result is an expansive retail facility carrying a wide range of products under one roof, including ...

, along with

convenience stores A convenience store, convenience shop, corner store or corner shop is a small retail business that stocks a range of everyday items such as coffee, groceries, snack foods, confectionery, soft drinks, ice creams, tobacco products, lottery ticket ...

carry a mix of food products and consumable household items such as detergents, cleansers, personal hygiene products. Retailers selling consumer durables are sometimes known as ''hardline retailers'' –

automobiles A car or automobile is a motor vehicle with wheels. Most definitions of ''cars'' say that they run primarily on roads, seat one to eight people, have four wheels, and mainly transport people instead of goods. The year 1886 is regarded as ...

, appliances,

electronics The field of electronics is a branch of physics and electrical engineering that deals with the emission, behaviour and effects of electrons using electronic devices. Electronics uses active devices to control electron flow by amplification ...

furniture Furniture refers to movable objects intended to support various human activities such as seating (e.g., stools, chairs, and sofas), eating (tables), storing items, eating and/or working with an item, and sleeping (e.g., beds and hammocks). Fu ...

sporting goods Sports equipment, sporting equipment, also called sporting goods, are the tools, materials, apparel, and gear used to compete in a sport and varies depending on the sport. The equipment ranges from balls, nets, and protective gear like helmets. ...

lumber Lumber is wood that has been processed into dimensional lumber, including beams and planks or boards, a stage in the process of wood production. Lumber is mainly used for construction framing, as well as finishing (floors, wall panels, wi ...

, etc., and parts for them. Specialist retailers operate in many industries such as the arts e.g. green grocers,

contemporary art galleries A contemporary art gallery is normally a commercial art gallery operated by an art dealer which specializes in displaying for sale contemporary art, usually new works of art by living artists. This approach has been called the "Castelli Method" ...

bookstores Bookselling is the commercial trading of books which is the retail and distribution end of the publishing process. People who engage in bookselling are called booksellers, bookdealers, bookpeople, bookmen, or bookwomen. The founding of librari ...

handicrafts A handicraft, sometimes more precisely expressed as artisanal handicraft or handmade, is any of a wide variety of types of work where useful and decorative objects are made completely by one’s hand or by using only simple, non-automated re ...

musical instruments A musical instrument is a device created or adapted to make musical sounds. In principle, any object that produces sound can be considered a musical instrument—it is through purpose that the object becomes a musical instrument. A person who pl ...

gift shops A gift shop or souvenir shop is a store primarily selling souvenirs, memorabilia, and other items relating to a particular topic or theme. The items sold often include coffee mugs, stuffed animals, toys, t-shirts, postcards, handmade collec ...

. Types of retail outlets by marketing strategy include

shopping arcade A shopping center (American English) or shopping centre (Commonwealth English), also called a shopping complex, shopping arcade, shopping plaza or galleria, is a group of shops built together, sometimes under one roof. The first known collec ...

anchor store In retail, an "anchor tenant", sometimes called an "anchor store", "draw tenant", or "key tenant", is a considerably larger tenant in a shopping mall, often a department store or retail chain. They are typically located at the ends of malls. Wit ...

bazaar A bazaar () or souk (; also transliterated as souq) is a marketplace consisting of multiple small Market stall, stalls or shops, especially in the Middle East, the Balkans, North Africa and India. However, temporary open markets elsewhere, suc ...

boutique A boutique () is a small shop that deals in fashionable clothing or accessories. The word is French for "shop", which derives ultimately from the Ancient Greek ἀποθήκη (''apothēkē'') "storehouse". The term ''boutique'' and also ''d ...

, category killer,

chain store A chain store or retail chain is a retail outlet in which several locations share a brand, central management and standardized business practices. They have come to dominate the retail and dining markets and many service categories, in many pa ...

, co-operative store

convenience store A convenience store, convenience shop, corner store or corner shop is a small retail business that stocks a range of everyday items such as coffee, groceries, snack foods, confectionery, soft drinks, ice creams, tobacco products, lottery ticket ...

discount store A discount store or discounter offers a retail format in which products are sold at prices that are in principle lower than an actual or supposed "full retail price". Discounters rely on bulk purchasing and efficient distribution to keep down cost ...

e-tailer Online shopping is a form of electronic commerce which allows consumers to directly buy good (economics), goods or Service (economics), services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of in ...

, general store,

give-away shop Give-away shops, freeshops, free stores or swap shops are stores where all goods are free. They are similar to charity shops, with mostly second-hand items—only everything is available at no cost. Whether it is a book, a piece of furniture, ...

, hawkers also known as

costermonger A costermonger, coster, or costard is a street seller of fruit and vegetables in British towns. The term is derived from the words ''costard'' (a medieval variety of apple) and ''monger'' (seller), and later came to be used to describe hawkers i ...

s or street vendors,

high street High Street is a common street name for the primary business street of a city, town, or village, especially in the United Kingdom and Commonwealth. It implies that it is the focal point for business, especially shopping. It is also a metonym fo ...

store,

hypermarket A hypermarket (sometimes called a hyperstore, supercentre or superstore) is a big-box store combining a supermarket and a department store. The result is an expansive retail facility carrying a wide range of products under one roof, including ...

pop-up retail Pop-up retail, also known as pop-up store (pop-up shop in the UK, Australia and Ireland) or flash retailing, is a trend of opening short-term sales spaces that last for days to weeks before closing down, often to catch onto a fad or scheduled e ...

market square The market square (or sometimes, the market place) is a Town square, square meant for trading, in which a market is held. It is an important feature of many towns and cities around the world.shopping center A shopping center (American English) or shopping centre (Commonwealth English), also called a shopping complex, shopping arcade, shopping plaza or galleria, is a group of shops built together, sometimes under one roof. The first known collec ...

, speciality store,

supermarket A supermarket is a self-service Retail#Types of outlets, shop offering a wide variety of food, Drink, beverages and Household goods, household products, organized into sections. This kind of store is larger and has a wider selection than earli ...

variety store A variety store (also five and dime (historic), pound shop, or dollar store) is a retail store that sells general merchandise, such as apparel, automotive parts, dry goods, toys, hardware, home furnishings, and a selection of groceries. It u ...

vending machine A vending machine is an automated machine that provides items such as snacks, beverages, cigarettes, and lottery tickets to consumers after cash, a credit card, or other forms of payment are inserted into the machine or otherwise made. The fir ...

, no frills,

warehouse club A warehouse club (or wholesale club) is a retail store, usually selling a wide variety of merchandise, in which customers may buy large, wholesale quantities of the store's products, which makes these clubs attractive to both bargain hunters ...

warehouse store A warehouse store or warehouse supermarket is a food and grocery retailer that operates stores geared toward offering deeper discounted prices than a traditional supermarket. These stores offer a no-frills experience and warehouse shelving stocke ...

automated retail Automated retail is the category of self-service, standalone kiosks that operate as fully automatic retail stores through the use of software integrations to replace the traditional retail services inside in a traditional retail store. These sta ...

big-box store A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The t ...

second-hand shop __NOTOC__ A second-hand shop is a shop which sells used goods. Temporary venues People will sell used goods right in front of their home in what is called a "garage sale". The products would be set up in front of the garage. In the UK, peo ...

, and charity shop. Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behavior. An effective format will determine how products are display products, as well as how target customers are attracted.

Challenges

To achieve and maintain a foothold in an existing market, a prospective retail establishment must overcome the following hurdles: *

regulatory Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...

barriers including: ** restrictions on real-estate purchases, especially as imposed by

local governments Local government is a generic term for the lowest tiers of public administration within a particular sovereign state. This particular usage of the word government refers specifically to a level of administration that is both geographically-loca ...

and against "big-box" chain retailers ** restrictions on foreign investment in retailers, in terms of both absolute amount of financing provided and percentage share of voting stock (e.g.

common stock Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Com ...

) purchased * unfavorable taxation structures, especially those designed to penalize or keep out "big box" retailers (see "Regulatory" above) * absence of developed supply-chain and integrated IT management * high

competitiveness In economics, competition is a scenario where different economic firmsThis article follows the general economic convention of referring to all actors as firms; examples in include individuals and brands or divisions within the same (legal) firm ...

among existing market participants and resulting low

profit margin Profit margin is a measure of profitability. It is calculated by finding the profit as a percentage of the revenue. \text = = There are 3 types of profit margins: gross profit margin, operating profit margin and net profit margin. * Gross Prof ...

s, caused in part by: ** constant advances in product design resulting in constant threat of product obsolescence and price declines for existing

inventory Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Inventory management is a discipline primarily about specifying the shap ...

* lack of a properly-educated and/or -trained work-force, often including management, caused in part by loss in business ** lack of educational infrastructure enabling prospective market entrants to respond to the above challenges * direct

e-tailing E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain manageme ...

(for example, through the

Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...

) and direct delivery to consumers from manufacturers and suppliers, cutting out any retail

middle man Middle man or Middleman or The Middle Men may refer to: * an intermediary, such as: ** a wholesaler ** a reseller Film, television and books * Middle Man (film), ''Middle Man'' (film), a 2016 American black comedy * Middle Man (1990 film), ''Midd ...

Method

When discussing the impact of technology on shopping and retail, e-commerce is often the first thing that comes to mind for retailers. However, technologies such as big data, artificial intelligence, computer vision and the Internet of Things have used data to transform every part of the shopping experience, from browsing to checkout. It is important for organizations to embrace digital disruption in order to gain a competitive advantage. When an industry experiences digital disruption, it typically signals that consumer needs are shifting. Retailers enhance their analytics process and make better informed decisions thanks to big data, artificial intelligence, computer vision, and the Internet of Things. The use of data by retailers is mostly evident in the following aspects, based on the above-mentioned new technologies: * Enhance marketing by Personalizing customer experience * Optimize supply chain management * Adjust prices to maximize profits

Consolidation

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 Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...

with a total known value of US$2.255 trillion have been announced. The largest transactions with involvement of retailers in/from the United States have been: the acquisition of Albertson's Inc. for US$17 billion in 2006, the merger between Federated Department Stores Inc with

May Department Stores The May Department Stores Company was an American department store holding company, formerly headquartered in downtown St. Louis, Missouri. It was founded in Leadville, Colorado, by David May in 1877, moving to St. Louis in 1905. After many ch ...

valued at 16.5 bil. USD in 2005 – now

Macy's Macy's (originally R. H. Macy & Co.) is an American chain of high-end department stores founded in 1858 by Rowland Hussey Macy. It became a division of the Cincinnati-based Federated Department Stores in 1994, through which it is affiliated wi ...

, and the merger between Kmart Holding Corp and Sears Roebuck & Co with a value of US$10.9 billion in 2004. Between 1985 and 2018 there have been 46,755 mergers or acquisitions conducted globally in the retail sector (either acquirer or target from the retail industry). These deals cumulate to an overall known value of around US$2,561 billion. The three major Retail M&A waves took place in 2000, 2007 and lately in 2017. However the all-time high in terms of number of deals was in 2016 with more than 2,700 deals. In terms of added value 2007 set the record with the US$225 billion. Here is a list of the top ten largest deals (ranked by volume) in the Retail Industry:

Statistics

Global top ten retailers

As of 2016,

China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...

was the largest retail market in the world.

Competition

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. Retail trade provides 9% of all jobs in India and 14% of GDP.

Statistics for national retail sales

United States

The

National Retail Federation The National Retail Federation (NRF) is the world's largest retail trade association. Its members include department stores, specialty, discount, catalog, Internet, and independent retailers, chain restaurants, grocery stores, and multi-level ma ...

and

Kantar A kantar is the official Egyptian weight unit for measuring cotton Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus '' Gossypium'' in the mallow family Ma ...

annually rank the nation's top retailers according to sales. The National Retail Federation also separately ranks the 100 fastest-growing U.S. retailers based on increases in domestic sales. Since 1951, the

U.S. Census Bureau The United States Census Bureau (USCB), officially the Bureau of the Census, is a principal agency of the U.S. Federal Statistical System, responsible for producing data about the American people and economy. The Census Bureau is part of the ...

has published the Retail Sales report every month. It is a measure of

consumer spending Consumer spending is the total money spent on final goods and services by individuals and households. There are two components of consumer spending: induced consumption (which is affected by the level of income) and autonomous consumption (which ...

, an important indicator of the US

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

. Retail firms provide data on the dollar value of their retail sales and inventories. A

sample Sample or samples may refer to: Base meaning * Sample (statistics), a subset of a population – complete data set * Sample (signal), a digital discrete sample of a continuous analog signal * Sample (material), a specimen or small quantity of s ...

of 12,000 firms is included in the final

survey Survey may refer to: Statistics and human research * Statistical survey, a method for collecting quantitative information about items in a population * Survey (human research), including opinion polls Spatial measurement * Surveying, the techniq ...

and 5,000 in the advanced one. The advanced estimated data is based on a subsample from the US CB complete retail &

food service The foodservice (US English) or catering (British English) industry includes the businesses, institutions, and companies which prepare meals outside the home. It includes restaurants, school and hospital cafeterias, catering operations, and man ...

s sample. Retail is the largest private-sector employer in the United States, supporting 52 million working Americans. Zuerich Migroshochhaus 5

Central Europe

In 2011, the grocery market in six countries of

Central Europe Central Europe is an area of Europe between Western Europe and Eastern Europe, based on a common historical, social and cultural identity. The Thirty Years' War (1618–1648) between Catholicism and Protestantism significantly shaped the area' ...

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 2012Grocery retail in Central Europe 201
Retail in Central Europe

World

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%. Emarketer predicts China will have the largest retail market in the world in 2016. In 2016,

became the largest retail market in the world. In the Republic of Armenia, retail trade has been increasing recently. In October 2022, it increased by 23.1% year by year, which was the most considerable rise since April 2021, faster than the 20.7 percent increase recorded a month earlier. Retail dropped by 1.9% after accumulating 2.1%in the earlier month. For the first 10 months of 2022, retail sales increased by 15.5% by measuring the exact time of 2021. Among its bordering countries, on retail trade percentage of GDP, Armenia ranks more increased than Turkey, but it is still lower than Georgia.

References

External links

ECRoPEDIA – Free Global Collection of Retail/FMCG Best practices by ECR Community

Investopedia.The Industry Handbook: The Retailing Industry

National Retail Federation
(U.S.-based trade association) {{Authority control Marketing strategy Merchandising