Overview of Retailing

Retailing makes a substantial contribution towards the economic growth of any

country. It is the final stage of distribution of product or service. It not only contributes to
country’s GDP but also empowers a large number of people by providing employment.
Retailing includes all activities involved in selling goods or provide services to the final
consumers for personal, non-business use. Any organization that sells the products for
consumption to the customers for their personal, family, or household use is in the occupation
of retailing.
Concept of Retailing
The concept of retailing can be further understood by looking at the Wheel of Retailing.
The Wheel of Retailing consist of three different phases as follow:

The entry phase is when each new type of retailer gains a competitive foothold by
offering lower prices than current retailers, while maintaining profits through reduction of
services. Trading-up phase is once the retailing business is established, more services are
introduced and prices rise. It then becomes vulnerable to new lower price competitors once it
gets to the vulnerability phase.
Types of Retailing
Retailing can be categorized into three formats which are store based, non-store
based, and service based.
Store based is divided into ownership based and merchandise based. Examples of
ownership based are independent retailers, chain stores, franchises, and consumers co-
operative stores. Meanwhile, merchandise based includes convenience stores, supermarkets,
hypermarkets, specialty stores, departmental stores, factory outlets, catalogue showrooms.
Non-store based is the form of retailing where the retailer is in direct contact with the
consumer at the workplace or at home. Mail orders, postal orders, e-shopping, telemarketing,
automated vending and kiosks are the examples of non-store based retailing.
 Service based retailing provide various services to the end consumer. The services
include banking, car rentals, electricity, telephone network, flights & accommodations.
Retailer Marketing Decisions
The main idea of retailer marketing decision can be clearly shown in the following
diagram:

Based on the diagram, retailers must first identify their target markets and position
themselves in these markets so the other retail marketing decisions can be made. The
decisions are further explained as follows:
Product - Retailers must then decide on three major product variables which are product
assortment, services mix, and store atmosphere.
Price - The price policy must fit with the target market and positioning, the product and service
assortment, and the competition. High mark up on lower volume and low mark up on high
volume are the main price policies being used by retailers.
Place - Location is the key to success. Retailers can locate in central business districts,
shopping centres, strip malls, power centres.
Promotion - Retailers can use any or all the promotion tools such as advertising, personal
selling, sales promotion, public relations, and direct marketing in order to reach consumers.
The Future of Retailing
Technological transformation continues to be a game changer for retailing that can
simultaneously benefit consumers and retailers. For example, technology enables consumers
to make more informed decisions, receive more targeted and beneficial offers, and obtain
faster service. It also assists retailers in reaching appropriate consumers at lower costs, due
to technologically created efficiencies. Retail technology includes video-cast, inventory
control, electronic ordering, transfer of information, scanning, online transaction processing,
improved merchandise handling systems, and the ability to connect with customers. The
advancement of these technologies positively ensure the sustainability of retailing towards the
future.