Retail Management – Introduction to Retail in General – Part. 1
Unless you went to business school to open a vintage store and you remember all of those courses about how to successfully run a retail operation, you may want to freshen up your on the basic concepts behind operating a store. The following article was taken from a ten part lecture about retail with added notes. This resource is great if you are putting together a business plan, or if you are looking for material to become better at what you do.
Topic: Introduction of Retail
What is Retail?
Retail is the final stage of any economic activity. BY virtue of this fact Retail occupies an important place in the world economy. In an attempt to understand the scope of the term retail, various definitions of the term have been examined.
According to Philip Kotler: “Retailing includes all the activities involved in selling goods or Services to the final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sale volume comes primarily from retailing. Any organisation selling to final consumers whether it is a manufacturer, wholesaler or retailer is doing retailing It does not matter how the goods services are sold (by person, mail, telephone, vending machine or internet or where the are sold – in a store, on the street or in the consumer’s home)” .
The North American Industry Classification System (NAICS)2 specifies that the retail trade sector comprises establishments primarily engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise.
The word retail is derived from the French word ‘retaillier’, which means to cut off a piece or to ~k bulk. A retailer may be defined, as a ‘dealer or trader who sells goods in small quantities’ or ‘one who repeats or relates’.
Retailing thus may be understood as the final step in the distribution of merchandise, for consumption by the end consumers. Put simply, an firm that sells products to the final consumer is performing the function of retailing. It thus consists of all activities involved in the marketing of goods and services directly to the consumers for their personal, family or household use.
It is necessary to understand that in the complex world of trade today, retail would include !2.0t only goods but also services, which may be provided to the end consumer. In an age where the customer is the king and marketers are focusing on customer delight, retail may be redefined as the first point of customer contact.
Functions of a Retailer:
From the customers point of view, the retailer serves him by providing the goods that he needs in the required assortment, at the required place and time. From an economic standpoint, the role of a retailer is to provide real added value or utility to the customer. This comes from four different perspectives:
1. First is utility regarding the form of a product that is acceptable to the customer. The retailer does not supply raw materials, but rather offers finished goods and services in a form that the customers want. Retailer performs the function of storing the goods, and providing us with an assortment of products in various categories.
2. He create; time utility.-by keeping the store open when the consumers prefer to shop.
3. By being available at a convenient location, he creates .place utility.
4. Finally, when the product is sold, ownership utility is created.
The rise of retailer
In the not so distant past, manufacturers created a product, advertised it slickly and sold it through their distribution channel. The manufacturing companies enjoyed economic power, as they were significantly bigger in size as compared to the distributors or the retailers. They determined prices, the products that the retailer could stock and also the dealer and distributor margins. They would also independently advertise for their products. In case of a dispute with the distributor or retailer it would not be rare for the manufacturer to discontinue supplies. However, much has changed.
Today, retail has emerged as a separate function by itself. The environment in a large organized retail store is significantly different from that of a traditional or a mom and pop store. In this section, we examine the reasons behind this change.
Proximity to the Customer
Today, with the emergence of large supermarkets, hypermarkets and various other formats like the department stores, the retailer is the closest to the consumer. Most stores have their own policies and decide how to inf1uen~hoppers. In an age of global manufacturing and selling, the organization may be based in one part of the world and may actually retail its products in various other regions. The retailer is the first contact point that the consumer has with the product, and this fact has given the retailer tremendous power.
With the increasing use of technology and the use of the Point of Sale scanning systems at barcode, a wealth of information is now available to the retailer