The major types of retailers & their role in the marketing distribution channel

Retailing

Retailing is a business activity in which products & services sell directly to the final consumers for their personal use. We all know about Wal-Mart, Costco, best buy, Target, etc retailers. They operate the retailing business.

Retailer

A person who operates a retailing business is commonly known as a retailer. In most marketing channels, retailing plays a very important role. In a survey, it was found that around $4.6 trillion of sales to final consumers comes from retail businesses.

Shopper Marketing

A retailer who has a physical store & this store has a brand value. This person tries to adopt some promotional activities & advertising to extend the brand equity. This business plays an important role in connecting brands to consumers. It’s also true that every well-designed marketing effort focuses on customer buying behavior. This marketing involves the entire marketing process from origin to destination, brand development, logistics support systems, merchandising, etc. Gather knowledge on – integrated marketing communications program.

Types of retailers

Retail stores come in all shapes & sizes. The major types of retailers can be classified in terms of characteristics, including the number of services, the product line, and the relative prices & how they are organized.

Amount of service

According to the number of services, customer needs different products. To meet these different needs of customers, retailers offer three service levels:

  • Self-service:
  • Limited service
  • Full service

Product line

According to the length & breadth of the product line, retailers also classified their stores. Explore – Marketing Automation Strategies

  • Specialty store: Specialty store carries a narrow product line with a deep assortment of products.
  • Departmental store: Department store carries several product lines like grocery items, clothing, appliances, etc under one store.
  • Supermarkets: The supermarket is a relatively large market, low cost with low margin & high volume, the self-service system helps the customer to find out their needed products within the store.
  • Convenience store: Convenience store is a relatively small store located near the residential area.
  • Discount store: A discount store sells at lower prices with lower margins but higher volume.
  • Off-price retailer: A retailer who buys his products for less than the regular price & sells them for less than the retail price is commonly known as the off-price retailer.
  • Superstore: A superstore is a very large store that meets the consumer’s total needs for regularly purchased goods.

Relative prices

Retailers can be classified according to relative prices. The maximum retailer charges regular prices or discount prices. See the classification of relative prices.

  • Discount store: A discount store sells at lower prices with lower margins but higher volume.
  • Off-price retailer: A retailer who buys his products for less than the regular price & sells them for less than the retail price is commonly known as the off-price retailer.
  • Independent off-price retailer: A retailer who independently owned his business & sells at an off-price rate.
  • Factory outlet: When a manufacturer operates & owned an off-price retail business, carries his surplus, discontinued, or irregular goods commonly known as the factory outlet.
  • Warehouse clubs: When a retailer sells only a limited selection of brand items & offers a discount to members who pay annual membership fees commonly known as warehouse clubs.

Organizational approach

Retail stores are independently owned by the retailer. Other firms may come together through the contractual agreement. See the major types of retail organizations.

  • Corporate chains: Corporate chains are mainly owned through two or more outlets. All types of retailing follow a corporate chain but in this case, they’re strongest in nature. For example Target.
  • Voluntary chains: Independently owned retailers engaged in buying & merchandising.
  • Retailer cooperatives: Retailer cooperatives are worked in a group & jointly establish a central buying organization.
  • Franchise organizations: A contractual agreement between franchisor & franchisee. The franchisee buys the right to own & operate the franchise system. For example McDonald’s, and Pizza Hut. Explore more on – Digital Marketing White Paper

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