"Retail" and "Retail stores" redirect here.

For the comic strip by Norm Feuti,

Retail consists of the sale of goods or merchandise from a fixed location, such as a department

store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser.
[1]
 Retailing may include subordinated services, such as delivery. Purchasers may be individuals or
businesses. In commerce, a "retailer" buys goods or products in large quantities
from manufacturers or importers, either directly or through awholesaler, and then sells smaller quantities
to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of
thesupply chain. Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy. The term "retailer" is also applied where a service provider services the
needs of a large number of individuals, such as a public utility, like electric power.

Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall.
Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to
protect customers from precipitation. Online retailing, a type of electronic commerce used forbusiness-to-
consumer (B2C) transactions and mail order, are forms of non-shop retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities
such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often
involves window shopping (just looking, not buying) and browsing and does not always result in a
purchase.
Retail comes from the French word retailler, which refers to "cutting off my hands, clip and divide" in
terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small quantities" in
1433 (French). Its literal meaning for retail was to "cut off, shred, off my toes paring".[2] Like the French,
the word retail in both Dutch and German (detailhandel and Einzelhandel respectively), also refers to the
sale of small quantities of items.

Retailing is one of the pillars of the economy in India and accounts for 35% of GDP.[1]
The retail industry is divided into organised and unorganised sectors. Over 12 million outlets operate in
the country and only 4% of them being larger than 500 sq ft (46 m2) in size. Organised retailing refers to
trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income
tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately
owned large retail businesses. Unorganised retailing, on the other hand, refers to the traditional formats of
low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops,
convenience stores, hand cart and pavement vendors, etc.[2] In India, a shopkeeper of such kind of shops
is usually known as a dukandar.

Most Indian shopping takes place in open markets and millions of independent grocery shops called
kirana. Organized retail such supermarkets accounts for just 4% of the market as of 2008.[3] Regulations
prevent most foreign investment in retailing. Moreover, over thirty regulations such as "signboard
licences" and "anti-hoarding measures" may have to be complied before a store can open doors. There
are taxes for moving goods to states, from states, and even within states.[3]

An increasing number of people in India are turning to the services sector for employment due to the
relative low compensation offered by the traditional agriculture and manufacturing sectors. The organized
retail market is growing at 35 percent annually while growth of unorganized retail sector is pegged at 6
percent.[4]

The Retail Business in India is currently at the point of inflection. Rapid change with investments to the
tune of US $ 25 billion is being planned by several Indian and multinational companies in the next 5
years. It is a huge industry in terms of size and according to management consulting firm Technopak
Advisors Pvt. Ltd., it is valued at about US $ 350 billion. Organised retail is expected to garner about 16-
18 percent of the total retail market (US $ 65-75 billion) in the next 5 years.

India has topped the A.T. Kearney’s annual Global Retail Development Index (GRDI) for the third
consecutive year, maintaining its position as the most attractive market for retail investment. The Indian
economy has registered a growth of 8% for 2007. The predictions for 2008 is 7.9%.[5] The enormous
growth of the retail industry has created a huge demand for real estate. Property developers are creating
retail real estate at an aggressive pace and by 2010, 300 malls are estimated to be operational in the
country.[6]

With over 1,000 hypermarkets and 3,000 supermarkets projected to come up by 2011, India will need

additional retail space of 700,000,000 sq ft (65,000,000 m2) as compared to today. Current projections on
construction point to a supply of just 200,000,000 sq ft (19,000,000 m2), leaving a gap of
500,000,000 sq ft (46,000,000 m2) that needs to be filled, at a cost of US$15–18 billion.[7]
According to the Icrier report, the retail business in India is estimated to grow at 13% from $322 billion in
2006-07 to $590 billion in 2011-12. The unorganized retail sector is expected to grow at about 10% per
annum with sales expected to rise from $ 309 billion in 2006-07 to $ 496 billion in 2011-12

ndian market has high complexities in terms of a wide geographic spread and distinct consumer
preferences varying by each region necessitating a need for localization even within the geographic
zones. India has highest number of outlets per person (7 per thousand) Indian retail space per capita at
2 sq ft (0.19 m2)/ person is lowest in the world Indian retail density of 6 percent is highest in the world.
[9]
 1.8 million households in India have an annual income of over  45 lakh (US$ 102,150)[10].

Delving further into consumer buying habits, purchase decisions can be separated into two categories:
status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators, washing machines,
dishwashers, microwave ovens and DVD players fall in the status category. Indulgence-oriented products
include plasma TVs, state-of-the-art home theatre systems, iPods, high-end digital cameras, camcorders,
and gaming consoles. Consumers in the status category buy because they need to maintain a position in
their social group. Indulgence-oriented buying happens with those who want to enjoy life better with
products that meet their requirements. When it comes to the festival shopping season, it is primarily the
status-oriented segment that contributes largely to the retailer’s cash register.[11]

While India presents a large market opportunity given the number and increasing purchasing power of
consumers, there are significant challenges as well given that over 90% of trade is conducted through
independent local stores. Challenges include: Geographically dispersed population, small ticket sizes,
complex distribution network, little use of IT systems, limitations of mass media and existence of
counterfeit goods.

Retailing is a distribution channel function where one organization buys products from
supplying firms or manufactures the product themselves, and then sells these directly to
consumers. A retailer is a reseller (i.e., obtains product from one party in order to sell to
another) from which a consumer purchases products. In the US alone there are over
1,100,000 retailers according to the 2002 US Census of Retail Trade.

In the majority of retail situations, the organization from which a consumer makes
purchases is a reseller of products obtained from others and not the product manufacturer.
But as we discussed in the tutorial, some manufacturers also operate their own retail outlets
in a corporate channel arrangement. While consumers are the retailer’s buyers, a consumer
does not always buy from retailers. For instance, when a consumer purchases from another
consumer (e.g., eBay) the consumer purchase would not be classified as a retail purchase.
This distinction can get confusing but in the US and other countries the dividing line is
whether the one selling to consumers is classified as a business (e.g., legal and tax
purposes) or is selling as a hobby without a legal business standing.
As a reseller, retailers offer many benefits to suppliers and customers as we discussed in
the  tutorial. For consumers the most important benefits relate to the ability to purchase
small quantities of a wide assortment of products at prices that are considered reasonably
affordable. For suppliers the most important benefits relate to offering opportunities to reach
their target market, build product demand through retail promotions, and provide consumer
feedback to the product marketer.

Concerns of Retailers
Retailers are faced with many issues as they attempt to be successful. The key issues
include:

 Customer Satisfaction – Retailers know that satisfied customers are loyal customers.
Consequently, retailers must develop strategies intended to build relationships that
result in customers returning to make more purchases.
 Ability to Acquire the Right Products – A customer will only be satisfied if they can
purchase the right products to satisfy their needs. Since a large percentage of
retailers do not manufacture their own products, they must seek suppliers who will
supply products demanded by customers. Thus, an important objective for retailers is
to identify the products customers will demand and negotiate with suppliers to obtain
these products.
 Product Presentation – Once obtained products must be presented or merchandised
to customers in a way that generates interest. Retail merchandising often requires
hiring creative people who understand and can relate to the market.
 Traffic Building – Like any marketer, retailers must use promotional methods to build
customer interest. For retailers a key measure of interest is the number of people
visiting a retail location or website. Building “traffic” is accomplished with a variety of
promotional techniques such as advertising, including local newspapers or Internet,
and specialized promotional activities, such as coupons.
 Layout– For store-based retailers a store’s physical layout is an important
component in creating a retail experience that will attract customers. The physical
layout is more than just deciding in what part of the store to locate products. For many
retailers designing the right shopping atmosphere (e.g., objects, light, sound) can add
to the appeal of a store. Layout is also important in the online world where site
navigation and usability may be deciding factors in whether of a retail website is
successful.
 Location – Where to physically locate a retail store may help or hinder store traffic.
Well placed stores with high visibility and easy access, while possibly commanding
higher land usage fees, may hold significantly more value than lower cost sites that
 yield less traffic. Understanding the trade-off between costs and benefits of locations
is an important retail decision.
 Keeping Pace With Technology – Technology has invaded all areas of retailing
including customer knowledge (e.g., customer relationship management software),
product movement (e.g., use of RFID tags for tracking), point-of-purchase (e.g.,
scanners, kiosks, self-serve checkout), web technologies (e.g., online shopping carts,
purchase recommendations) and many more.

Ways to Categorize Retailers

There are many ways retailers can be categorized depending on the characteristics being
evaluated. For our purposes we will separate retailers based on six factors directly related
to major marketing decisions:

 Target Markets Served

 Product Offerings
 Pricing Structure
 Promotional Emphasis
 Distribution Method
 Service Level

and one operational factor:

 Ownership Structure

However, these groups are not meant to be mutually exclusive. In fact, as we will see in
some way all retailers can placed into each category.