Retailing is one of the most important economic sectors in Germany and is of great economic importance. In theory, all trading companies that source goods and sell them directly to end customers are called retailers.
But what exactly is retail? In this article, we will show you what sales formats exist in the retail industry and everything related to them.
Summary: What is retail?
Retailing is generally understood as trading companies procuring goods from different manufacturers, combining them into an assortment, and selling them to non-commercial customers, the consumers.
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Table of contents:
Definition: What is retail?
Retail includes all retailers that sell products directly to end customers. Therefore, it acts as a link between the manufacturer and the consumer (i.e. non-commercial customers). This process is also known as business-to-consumer (B2C).
Retailers do not produce goods themselves, but source from wholesalers or manufacturers. Customers do not pay production prices, but retailers raise prices on goods to make a profit. The retail industry pre-selects customers to include them in its range, making it easier for consumers to make a choice.
Read the tips: You can learn how to calculate selling price in this article.
Therefore, retailing is the last sales stage in the value chain. Attention to the end customer is paramount. Wholesale is different from retail, it is mainly sold to corporate customers, so it belongs to the sales level before retail.
The most important retail sectors include, for example, clothing, food or services such as hotels or restaurants – ranging from small boutiques to large shopping malls. The term is often synonymous with fixed retail sales. But strictly speaking, online retailers like Amazon also fall into this category.
retail business form
Retailers can conduct business in different business forms. Basic distinguishing features include:
- fixed trade
- mobile trade
- mail order
- e-commerce
fixed trade
The most common form of retail business is stationery sales. Traders who choose this business sell their wares in fixed sales rooms. These include, for example, boutiques or pharmacies.
Read the tips: Learn how to use visual merchandising to make your retail space shine.
mobile retail
Outpatient (or mobile) trade includes trade with stall sales, for example, at the Christmas or weekly markets. In this case, ambulant means that dealers can operate their sales outlets in different locations as needed – they sell regardless of location.
mail order
In the case of mail order, the customer can only get the product by order. The retailer offers neither stationary nor flowing trade. The merchandise here is mainly sold in the form of catalogues, advertising leaflets or brochures. Shipping is by post.
e-commerce
AIn a way, e-commerce has been called the modern form of mail order. Retailing through e-commerce is conducted through online platforms, such as online stores, where customers order goods. E-commerce retailers generally do not operate stationary or mobile sales outlets.
Read the tips: 5 retailers show how to successfully combine e-commerce and retail.
There are further distinctions between the different types of retail business:
- specialty store
- specialty store
- Warehouses and Department Stores
- Discount stores and supermarkets
- Hypermarkets and shopping centers
- corner store
These types of businesses differ mainly in the range of products offered and the size of the trading company or sales area.
For example, a corner store offers a wide range of products in a smaller sales area. Specialty stores are always limited to a certain set of products. Supermarkets, department stores, and shopping centers offer a wide variety of products in a wide sales area.
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How is the retail structure?
Retail is the level of sales between wholesalers and consumers. The range is selected by the retailer and offered to the end customer to purchase in the corresponding range.
As a retailer, you can join a large retail chain as a franchisee or open your own store. Small retailers are often located in regional areas, while larger retail chains are spread across the country or internationally.
Read the tips: You can read about the role store design plays in the retail industry here.
Important subareas in retailing include warehouses, sales areas, checkout areas, and logistics components. Goods have to be selected, ordered, shipped, unloaded and put into storage – all of these processes have to run smoothly so that shelves are always well stocked.
work in retail
The determining factor for a job in retail and for the number of employees is above all the size of the store. Smaller stores with a smaller scope can often manage themselves. In large companies, there are several positions that need to be filled in addition to the general manager and deputy general manager.
Read the tips: We introduce you to 8 common jobs in retail.
All employees have to work hand in hand, from product purchase to merchandise presentation, promotions and checkout areas. The goal should always be to bring the product range to the customer in the best possible way, enhancing the shopping experience and expanding the customer base.
Finding the right partners is also important, and they make a lot of contribution to a functioning company. In addition to suppliers who ensure the smooth delivery of goods, technical equipment in the retail industry is also one of the orders that are usually executed by external partner companies.
This also includes the checkout system. The checkout process should be as safe, time-saving, and efficient as possible to make paying for items as pleasant as possible for customers.
Finding the right POS system is critical to your success in retail. We have summarized the most important information for you in a blog post:
-
POS System: Versatility, Higher Sales
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POS terminal: the most important things at a glance
-
POS Systems: What’s The Best Solution For Your Business? (2023)
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POS Apps: How to Find the Right App for Your Business
Typical retail case
In common industries that sell goods through retail Products sold by consumers include, for example, cosmetics, clothes or food. These items can be offered in small stores as well as in large shopping malls.
Examples of retail that are usually supplied by wholesale are:
- pharmacy
- department store
- supermarket
Online traders also belong to the retail industry. Furthermore, retailers not only offer goods but also services. Therefore, restaurants and hotels are also part of the retail industry.
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Conclusion: Retail still matters today
Few other sectors of the economy are as important to a market economy as retailing. Ultimately, it is the point of contact for the end consumer – be it stationary or online.
Consumers often take retail for granted — a quick bite of bread, a trip to the drugstore, or a wander around town.
However, as a retailer, you know that retail trade is based on complex concepts of logistics, product presentation, human resource management and billing systems.
Are you ready to turn your ideas into reality?
Try Shopify for free and sell as much as you want!
Frequently Asked Questions About Retail
What is retail?
Retail includes all stores that sell goods in small quantities directly to end customers. Retail stores include supermarkets, clothing stores, furniture stores, hardware stores, pharmacies, and bakeries, among others.
What kind of retail is there?
It is generally divided into fixed business halls (fixed trade), mobile trade, mail order trade and e-commerce. These types of retailing are often subdivided based on the size of their sales territory and the size of their assortment.
What is the difference between retail and wholesale?
The biggest difference is that wholesalers buy in bulk and do not sell directly to end customers, but to corporate customers.
What jobs are available in retail?
There is a wide range of careers in retail. The most common occupations in retail include salesperson, warehouse logistics specialist, retail clerk, and business specialist.
About the author: Alice Viete is a content marketing expert. As an agency owner, she supports B2B and eCommerce companies in implementing their personalized content strategies. On the Shopify Blog, she writes about current topics of successful retailers and online transactions.