Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the 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 peddlers. 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, an increasing number of retailers are seeking to reach broader markets by selling through multiple channels, including both bricks and mortar and online retailing. Digital technologies are also affecting the way that consumers 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. Retail workers are the employees of such stores.
Most modern retailers typically make a variety of strategic level decisions including the type of store, the market to be served, the optimal product assortment, customer service, 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 verb retaillier, meaning "to shape by cutting" (c.1365). It was first recorded as a noun in 1433 with the meaning of "a sale in small quantities" from the Middle French verb retailler meaning "a piece cut off, shred, scrap, paring".[1] At 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).
Definition and explanation
Retail refers to the activity of selling goods or services directly to consumers or end-users.[2] 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.[3]
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.[4] 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 directly 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.
Marketplace at Trajan's Forum, the earliest known example of permanent retail shopfrontsGrand Bazaar, Istanbul (interior). Established in 1455, it is thought to be the oldest continuously operating covered market.
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.[5] In ancient Greece, markets operated within the agora, an open space where, on market days, goods were displayed on mats or temporary stalls.[6] In ancient Rome, trade took place in the forum.[7] The Roman forum was arguably the earliest example of a permanent retail shop-front.[8]
Research from July 2008 suggests that China exhibited a rich history of early retail systems.[9] 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.[10] 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.[11]
In Medieval England and Europe, relatively few permanent shops were to be found; instead, customers walked into the tradesman's workshops where they discussed purchasing options directly with tradesmen.[12] In the more populous cities, a small number of shops were beginning to emerge by the 13th century.[13] Outside the major cities, most consumable purchases were made through markets or fairs.[14] Market-places appear to have emerged independently outside Europe. The Grand Bazaar in Istanbul 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) market of Tlatelolco was the largest in all the Americas.[15]
The retail service counter was an innovation of the 18th century.
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.[16] As the number of shops grew, they underwent a transformation. The trappings of a modern shop, which had been entirely absent from the 16th- and early 17th-century store, gradually made way for store interiors and shopfronts that are more familiar to modern shoppers. Prior to the 18th 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.[17]
Galeries de bois at au Palais-Royal, one of the earliest shopping arcades in Europe
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.[18] 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-19th century.[19]
Department stores, such as Le Bon Marché of France, appeared from the mid-19th century.
The modern era of retailing is defined as the period from the industrial revolution to the 21st century.[20] In major cities, the department store emerged in the mid- to late 19th century, and permanently reshaped shopping habits, and redefined concepts of service and luxury.[21] 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.[22] 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.[23]
In the post-war period, an American architect, Victor Gruen 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.[24] Throughout the twentieth century, a trend towards larger store footprints became discernible. The average size of a U.S. supermarket grew from 31,000 square feet (2,900m2) square feet in 1991 to 44,000 square feet (4,100m2) square feet in 2000.[25] By the end of the twentieth century, stores were using labels such as "mega-stores" and "warehouse" stores to reflect their growing size.[26] 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.[27]
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.[28] Under such competition and other issues such as business debt,[29] there has been a noted business disruption called the retail apocalypse in recent years which several retail businesses, especially in North America, are sharply reducing their number of stores, or going out of business entirely.
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."[30]
In retailing, the strategic plan is designed to set out the vision 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 three to five years by the chief executive officer. The profit margins of retailers depend largely on their ability to achieve market competitive transaction costs.
Customer analysis – Market segmentation, demographic, geographic, and psychographic profile, values and attitudes, shopping habits, brand preferences, analysis of needs and wants, and media habits
Internal analysis – Other capacities including human resource capability, technological capability, financial capability, ability to generate scale economies or economies of scope, trade relations, reputation, positioning, and 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.[32] Retail research studies suggest that there is a strong relationship between a store's positioning and the socio-economic status of customers.[33] In addition, the retail strategy, including service quality, has a significant and positive association with customer loyalty.[34] 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.[35]
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, 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.[36] The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing (see diagram at right).[37][38]
A typical supermarket carries an assortment of between 30,000 and 60,000 different products.
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 is the "sum of acts and elements that allow consumers to receive what they need or desire from [the] retail 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.
Sellers of souvenirs are typically located in high traffic areas such as this London souvenir stand situated near a railway station on a busy street corner.
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 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.[39]Online stores are usually available 24 hours a day, and many consumers across the globe have Internet access both at work and at home.
Extensive use of the terminal digit 'nine' suggests that psychological pricing is at play.
The broad pricing strategy 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,[40] revenue-oriented,[40] customer-oriented,[40]value-based,[41][42]relationship-oriented,[43] and socially-oriented.[44] 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,[45]everyday low prices,[46] high-low pricing,[46][47]loss leaders, product bundling,[48] promotional pricing, and psychological pricing.[49] Two strategies to entice the buyer, money back guarantee and buy one get one free, were devised by 18th-century retail entrepreneur Josiah Wedgwood.[50][51] 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.[52] Contrary to common misconception, price is not the most important factor for consumers, when deciding to buy a product.[53]
One of the most well-known cross-selling sales scripts comes from McDonald's. "Would you like fries with that?"
Because patronage at a retail outlet varies, flexibility in scheduling is desirable. Employee scheduling software 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-timeworkers; 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.[54] 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;[55] and knowing when to close the sale.[56]
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.[57] 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.
Modern technologies are often displayed in clean environments with much empty space.The retail servicescape includes the appearance, equipment, display space, retail counters, signage, layout and functionality of a retail outlet. Pictured: Harrods food court
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.[58] The store environment consists of many elements such as aromas, the physical environment (furnishings, layout, and functionality), ambient conditions (lighting, air temperature, and music) 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 maximize 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.[59] 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.[60] Ambient conditions, such as lighting, temperature and music, are also part of the overall retail environment.[61] It is common for a retail store to play music that relates to their target market.[62]
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.
People who shop for pleasure are known as recreational shoppers. The recreational shopper has its origins in the grand European shopping arcades. Pictured: The gentry in a Dutch lace shop in the 17th century
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.[63]
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.[64][65][66] Sproles and Kendall's consumer typology has been shown to be relatively consistent across time and across cultures.[67][68] Their typology is based on the consumer's approach to making purchase decisions.[69]
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): 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.[70] 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.
Australia's Officeworks is a category killer, retailing everything for the home office or small commercial office; stationery, furniture, electronics, communications devices, copying, printing and photography services, coffee, tea and light snacks.Apple's concept stores include video walls, Wi-Fi and desks to provide an immersive customer experience.A general store in Scarsdale, Victoria, Australia operates as a post-office, newsagent, petrol station, video hire, grocer and take-away food retailer. This type of store is referred to locally as a milk bar.A local store named "Luovon puoji" in the Hailuoto Island, Finland
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, 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.[71] 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.
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) 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
constant advances in product design resulting in constant threat of product obsolescence and price declines for existing inventory
partially due to loss in business: lack of work-force, often including management, that is properly educated and trained
lack of educational infrastructure enabling prospective market entrants to respond to the above challenges
direct e-tailing (for example, through the Internet) and direct delivery to consumers from manufacturers and suppliers, cutting out any retail middle man.[75]
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.[76]
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:[77][78]
Enhance marketing by Personalizing customer experience
Optimize supply chain management
Adjust prices to maximize profits
Many leading brands choose to target tourists who specifically travel to shop or spend money while on vacation. According to the Global Retail Tourism Market Report 2019–2023,[79] the value of the global shopping tourism market was estimated to be around $1.2 trillion in 2018. The report also forecasts that the market will grow at a compound annual growth rate (CAGR) of 6.7% from 2019 to 2023. In 2023 Kogan Page published a critically acclaimed[80] book "Leading Travel and Tourism Retail", which researched in depth the travel retail sector post COVID.
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 and acquisitions with a total known value of US$2.255 trillion have been announced.[81] 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,[82] the merger between Federated Department Stores Inc with May Department Stores valued at 16.5 bil. USD in 2005[83]– now Macy's, and the merger between Kmart Holding Corp and Sears Roebuck & Co with a value of US$10.9 billion in 2004.[84]
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.[85]
Here is a list of the top ten largest deals (ranked by volume) in the Retail Industry:[citation needed]
The National Retail Federation and Kantar annually rank the nation's top retailers according to sales.[88] The National Retail Federation also separately ranks the 100 fastest-growing U.S. retailers based on increases in domestic sales.[89][90]
Since 1951, the U.S. Census Bureau has published the Retail Sales report every month. It is a measure of consumer spending, an important indicator of the US GDP. Retail firms provide data on the dollar value of their retail sales and inventories. A sample of 12,000 firms is included in the final survey and 5,000 in the advanced one. The advanced estimated data is based on a subsample from the US CB complete retail and food services sample.[91]
Retail is the largest private-sector employer in the United States, supporting 52 million working Americans.[92]
Central Europe
In 2011, the grocery market in six countries of Central Europe 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 2012[93]
World
Japan has the largest number of vending machines per capita.
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.[94]
In 2016, China became the largest retail market in the world.[86]
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 per cent 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.[95]
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 limited in the range of merchandise than a hypermarket or big-box market. In everyday United States usage, however, "grocery store" is often used to mean "supermarket".
Shopping is an activity in which a customer browses the available goods or services presented by one or more retailers with the potential intent to purchase a suitable selection of them. A typology of shopper types has been developed by scholars which identifies one group of shoppers as recreational shoppers, that is, those who enjoy shopping and view it as a leisure activity.
Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries. Distribution is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.
Sales promotion is one of the elements of the promotional mix. The primary elements in the promotional mix are advertising, personal selling, direct marketing and publicity/public relations. Sales promotion uses both media and non-media marketing communications for a predetermined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include contests, coupons, freebies, loss leaders, point of purchase displays, premiums, prizes, product samples, and rebates.
Pricing is the process whereby a business sets the price at which it will sell its products and services and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of the product.
Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more items or products.
Consumer behaviour is the study of individuals, groups, or organisations and all the activities associated with the purchase, use and disposal of goods and services. Consumer behaviour consists of how the consumer's emotions, attitudes, and preferences affect buying behaviour. Consumer behaviour emerged in the 1940–1950s as a distinct sub-discipline of marketing, but has become an interdisciplinary social science that blends elements from psychology, sociology, social anthropology, anthropology, ethnography, ethnology, marketing, and economics.
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 retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2020, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.
Category management is a retailing and purchasing concept in which the range of products purchased by a business organization or sold by a retailer is broken down into discrete groups of similar or related products. These groups are known as product categories. It is a systematic, disciplined approach to managing a product category as a strategic business unit. The phrase "category management" was coined by Brian F. Harris.
Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. 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. The retail mix is loosely based on the marketing mix, 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 should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing.
Visual merchandising is the practice in the retail industry of optimizing the presentation of products and services to better highlight their features and benefits. The purpose of such visual merchandising is to attract, engage, and motivate the customer towards making a purchase.
The following outline is provided as an overview of and topical guide to marketing:
A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also known as a distribution channel. A marketing channel is a useful tool for management, and is crucial to creating an effective and well-planned marketing strategy.
Trade marketing is a discipline of marketing that relates to increasing the demand at the wholesaler, retailer, or distributor level rather than at the consumer level. However, there is a need to continue with Brand Management strategies to sustain the need at the consumer end. A shopper, who may or may not be the consumer themself, is the one who identifies and purchases a product from a retailer even though they might not purchase the goods at the end of the day. To ensure that a retailer promotes a company's product against competitors, that company must market its product to the retailers as well by offering steep discounts versus competitors. Trade marketing might also include offering various tangible/intangible benefits to retailers such as commissions made for sales.
'Shopper marketing' is "a discipline that focuses on the customer experience and the customer journey."It focuses on the consumer's path to purchasing a product, from first being aware of the product, to consideration and through to the purchase of it. It separates itself from retail marketing which focuses on engaging the customer in-store only.
Customer experience, sometimes abbreviated to CX, is the totality of cognitive, affective, sensory, and behavioral customer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages.
Virtual store research is an extension of the traditional methods of marketing research. While marketing research employs techniques like focus groups, surveys and observation to better understand consumer decision-making, virtual store research uses these standard research techniques within a simulated store setting, delivered via computer. Virtual store research uses 2-dimensional and 3-dimensional computer simulation technology to create retail contexts that are as close to the real shopping experience as possible. This allows test consumers within the virtual environment to interact with store merchandise and make purchase decisions in a way that closely resembles real in-store behavior.
Speciality goods are a class of consumer goods. Consumer goods can be categorized into convenience goods, shopping goods, and specialty goods. The classification scheme is based on the way consumers purchase. This system is based on the definition that convenience and speciality goods are both purchased with a predetermined pattern in mind. In the case of the convenience good, the pattern is that the most accessible brand will be purchased; in the case of a speciality good, the pattern is that only a specific brand will be purchased. For example, if the customer utilizes an outlet because it is the most accessible, it would be considered, for that customer at least, a convenience store; while one in which the consumer shops even if he has to go considerably out of his way to reach it, would be considered a speciality store. A shopping good is one in which the consumer does not have a predetermined pattern in mind. Likewise, a shopping store is one which the consumer will undertake a search to select a store to patronize.
Omnichannel retail strategy, originally also known in the U.K. as bricks and clicks, is a business model by which a company integrates both offline (bricks) and online (clicks) presences, sometimes with the third extra flips.
The retail format influences the consumer's store choice and addresses the consumer's expectations. At its most basic level, a retail format is a simple marketplace, 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.
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External links
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