What is Retail?

Retail, by definition, is the sale of goods or service from a business to a consumer for their own use. A retail transaction handles small quantities of goods whereas wholesale deals with the purchasing of goods on a large scale. Retail transactions are not to be confused with online transactions; goods must be sold from a single point directly to a consumer for their end users.


A retailer is a person or business that you purchase goods from. Retailers typically don’t manufacture their own items. They purchase goods from a manufacturer or a wholesaler and sell these goods to consumers in small quantities.

Retailing is the distribution process of a retailer obtaining goods or services and selling them to customers for use. This process is explained through the supply chain.

Types of Retail Outlets

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Department Stores

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Discount Stores

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Warehouse Stores

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E Tailers

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Speciality Stores

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Kirana Store

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How does Retail work?

Counter service

As the name suggests, counter service refers to the process of procuring the merchandise from the counter. The buyer does not have an easy access to the merchandise of the store and he can’t pick up things on his own. In such a mechanism the buyer has to walk up to the counter and ask for his requirements.

Delivery Service

The mechanism of shipping goods to the customer’s doorsteps is called as delivery service. The end-user does not have to walk up to the store to procure his merchandise; instead the goods are directly delivered to his house through various means of transportation. Delivery service is a boon for the individuals who have an extremely busy life style and do not have enough time to walk up to the store.

Online Shopping

Internet has helped end-users to shop from their homes only. Online shopping sites like Amazon, eBay etc provide a wide range of options to the consumers who can order the desired merchandise through internet. Once the payment is done through debit or credit cards, the goods are delivered at the address the customer requests for. The transportation charges however are borne by the consumer himself.

Order through telephone

Now a days several restaurants and eating joints provide an option of ordering food while sitting at home. The food outlets upload their complete menu in the website providing a wide range of options to the end-users. One can easily place his order over the phone and the food is delivered at his doorstep within no time.

Self Service: In self service the individuals have the liberty to pick up merchandise on their own and help themselves.

Second Hand Retail: In second hand retail shops the retailer sells second hand goods to the end-users. Such shops generally run for charity where people donate their used merchandise to be resold to the poor and needy free of cost.

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Role of Advertising in Retail

Promoting a brand is more important than opening a store. It is essential to create brand awareness for the customers to know about the brand’s existence. The retailer must strive hard to communicate the USPs (Unique selling Proposition) of the brand to influence the buying behaviour of the customers. In simpler words, advertisements help the end-users to know to which brand a particular product belongs.

Advertisements play a crucial role in promoting a brand and creating its awareness amongst the masses. They help in creating an image of a particular product or brand in the minds of the potential customers. Such a mechanism is also called Brand Positioning.

  • The retailer through various ways of advertising strives hard to promote his brand amongst the masses for them to visit the store more often.
  • Advertisements attract the customers into the store. They act as a catalyst in bringing the customers to the stores.

The advertisement must effectively communicate the right message and click on the customers. It should be a visual treat and appeal the end-users.

Advertisements have taglines to create awareness of a product or service in the most effective way.

  • The tagline has to be crisp and impressive to create the desired impact.
  • The tagline should not be lengthy else the effect gets nullified.
  • It has to be catchy.
  • It should be simple to memorize.

Characteristics Of Retail

  • Direct contact with the customer – Retailing involves direct contact with the end customer and are a mediator between the wholesaler and the customer or the manufacturer and the customer depending upon the distribution channels used.

  • Relationship with the customers – Retailers form a bond with the customers and help them decide which products and services they should choose for themselves.

  • Stock small quantities of goods – Retailers usually stock small quantities of goods compared to manufacturers and wholesalers.

  • Stock goods of different brands – Retailers usually stock different goods of different brands according to the demand in the market.

  • Customers’ contact with the company – Retailers act as the representatives of the company to the end customers who give their feedback and suggestions to them.

  • Have a limited shelf space – Retail stores usually have very limited shelf space and only stock goods which have good demand.

  • Sells the goods at maximum prices – Since retailing involves selling the products directly to the customers, it also witnesses the maximum price of the product.

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