7 Types of Retailers in Retail Management: A Comprehensive Guide
Retail management is the process of planning, organizing, directing and controlling the activities of a retail business. Retailers are businesses that sell goods or services directly to consumers, usually in small quantities. There are different types of retailers in retail management, each with its own characteristics, advantages and disadvantages. In this article, we will explore the 7 types of retailers in retail management and provide some tips on how to choose the best one for your business.
Types of Retailers in Retail Management
1. Specialty Store
A specialty store is a retailer that sells a specific type of product or service, such as clothing, jewelry, books, electronics, etc. Specialty stores usually have a narrow product assortment, but offer a high level of customer service and expertise. Specialty stores can charge higher prices and attract loyal customers who value quality and exclusivity. Some examples of specialty stores are Apple, Tiffany & Co., Barnes & Noble, etc.
2. Department Store
A department store is a retailer that sells a wide range of products or services, such as clothing, furniture, cosmetics, appliances, etc. Department stores usually have multiple floors or sections, each dedicated to a different category of merchandise. Department stores offer a variety of brands and prices, as well as convenience and variety for customers. Some examples of department stores are Macy’s, Nordstrom, Walmart, etc.
3. Supermarket
A supermarket is a retailer that sells mainly food and grocery items, such as fruits, vegetables, meat, dairy, bread, etc. Supermarkets usually have large floor spaces and self-service checkout systems. Supermarkets offer low prices and convenience for customers who need to buy everyday essentials. Some examples of supermarkets are Kroger, Safeway, Tesco, etc.
4. Convenience Store
A convenience store is a retailer that sells a limited range of products or services, such as snacks, beverages, cigarettes, lottery tickets, etc. Convenience stores usually have small floor spaces and are located near residential or commercial areas. Convenience stores offer speed and accessibility for customers who need to buy something quickly or at odd hours. Some examples of convenience stores are 7-Eleven, Circle K, Wawa, etc.
5. Discount Store
A discount store is a retailer that sells a wide range of products or services at lower prices than other retailers. Discount stores usually have large floor spaces and offer minimal customer service and ambiance. Discount stores appeal to customers who are looking for bargains and value for money. Some examples of discount stores are Target, Costco, Dollar Tree, etc.
6. Online Store
An online store is a retailer that sells products or services through the internet, such as websites, apps, social media platforms, etc. Online stores usually have no physical locations and operate 24/7. Online stores offer convenience and flexibility for customers who can shop anytime and anywhere. Online stores can also offer a wider selection and lower prices than physical retailers. Some examples of online stores are Amazon, eBay, Netflix, etc.
7. Franchise
A franchise is a retailer that operates under a license from a parent company that provides the brand name, products or services, marketing support and operational guidelines. Franchises usually have uniform standards and quality across different locations. Franchises benefit from the reputation and recognition of the parent company and can leverage its resources and expertise. Some examples of franchises are McDonald’s, Starbucks, Subway, etc.
How to Choose the Best Type of Retailer for Your Business
Choosing the best type of retailer for your business depends on several factors, such as:
– Your target market: Who are your customers? What are their needs and preferences? How do they like to shop?
– Your product or service: What are you selling? How unique or differentiated is it? How much does it cost? How often do customers buy it?
– Your competition: Who are your competitors? What types of retailers do they use? How can you stand out from them?
– Your resources: How much money do you have to invest? How much time do you have to manage your business? How much risk are you willing to take?
Based on these factors, you can evaluate the pros and cons of each type of retailer and choose the one that best suits your business goals and capabilities.
Types of Retailers in Retail Management
Retailing is the process of selling goods or services to customers through different channels. There are many types of retailers in retail management, each with their own advantages and disadvantages. Here are some of the most common types of retailers and how they affect the global demand in this industry.
Store Retailers
Store retailers are the ones that operate from a physical location, such as a shop, a mall, or a market. They can offer a wide variety of products, such as clothing, groceries, electronics, furniture, etc. Store retailers can be classified into different categories based on their product lines, such as:
– Specialty store: A store that sells a single product line or a narrow range of products, such as AutoZone (car parts) or Tiffany & Co. (jewelry).
– Department store: A store that sells a wide variety of product lines, such as JCPenney or Kohl’s. They usually have different departments for different categories, such as clothing, cosmetics, home appliances, etc.
– Supermarket: A store that sells multiple product lines, mostly focused on groceries and food items, with limited services. Examples are Publix, Kroger, or Save A Lot.
– Superstore: A store that combines a supermarket and a department store, offering a large assortment of products and services. Examples are Target or Walmart.
– Convenience store: A store that sells a limited range of everyday items, such as snacks, beverages, cigarettes, etc. They are usually located near residential areas or busy roads and are open for long hours. Examples are 7-Eleven or Speedway.
– Category killer: A very large superstore that sells a wide product line within a specific category, such as Best Buy (electronics), Lowe’s (hardware), Home Depot (home improvement), Staples (office supplies), or Office Depot (office supplies).
– Discount store: A store that sells a broad range of products with few or no services at low prices. Examples are Dollar General, Dollar Tree, or Family Dollar.
– Off-price retailer: A store that sells brand name overstock, irregulars, and closeouts at discounted prices. Examples are T.J.Maxx or Ross.
– Factory outlet: A store that sells overstock or over-manufactured brand-name items, usually clothing, at reduced prices. They are typically located in a mall setting with other factory outlets. Examples are Sawgrass Mills Factory Outlet, Indiana Premium Outlets, Osage Outlets; Hanes Outlet or L.L.Bean Outlet.
– Warehouse club: A store that sells bulk items at discount prices for paid membership. Examples are Sam’s Club, BJ’s, or Costco.
Store retailers have been facing challenges from online competition and changing consumer preferences in recent years. However, they still have some advantages over non-store retailers, such as:
– Providing sensory experience: Customers can see, touch, smell, or try the products before buying them.
– Offering personal service: Customers can interact with salespeople who can offer advice, assistance, or recommendations.
– Creating impulse buying: Customers can be influenced by attractive displays, promotions, or cross-selling opportunities.
– Building customer loyalty: Customers can develop trust and familiarity with the store brand and staff.
Non-store Retailers
Non-store retailers are the ones that sell products without having a physical location. They use different channels to reach customers, such as:
– Automatic vending: Unmanned machines that sell very limited product lines in places where store retailers are not available. Examples are snack and beverage machines in a hospital waiting room.
– Direct mail and catalogs: Limited product lines advertised through the mail. Examples are Tiffany & Co.’s Blue Book, L.L.Bean, or Fingerhut.
– Television home shopping: Limited product lines advertised on television. Examples are Home Shopping Network or QVC.
– Online retailing: Products offered for sale via the Internet. Examples are Amazon or eBay.
– Telemarketing: Products sold via the telephone.
– Direct selling: Products sold by salespeople who are very knowledgeable about the product and sell directly to a business or end user. Examples are Kirby Vacuums (B2C) Publishing companies (B2B) Technology companies (B2B).
Non-store retailers have been growing rapidly in recent years due to the advancement of technology and the convenience of shopping from home. They have some advantages over store retailers, such as:
– Reducing costs: Non-store retailers can save on rent, utilities, labor, inventory, etc.
– Expanding market reach: Non-store retailers can access customers from different locations and segments without being limited by geography or demographics.
– Offering customization: Non-store retailers can tailor their products to meet the specific needs and preferences of customers.
– Enhancing customer relationship: Non-store retailers can collect data and feedback from customers and use them to improve their products and services.
References:
https://www1.umassd.edu/ir/resources/consumption/shopping.pdf
http://www.davidreiley.com/FieldExperimentsCourse/papers/FullReadingList/DrezeEverydayLowPricing.pdf
https://openstax.org/books/principles-marketing/pages/18-2-major-types-of-retailers
https://biz.libretexts.org/Courses/Lumen_Learning/Book%3A_Retail_Management_%28Lumen%29/02%3A_Retail_Environment_Analysis/2.01%3A_Assortment_Levels_and_Types_of_Retailers
https://www.feedough.com/what-is-retail-retailing-types-functions-characteristics/
https://www.investopedia.com/terms/r/retail.asp
https://www.shopify.com/encyclopedia/what-is-retail
https://www.thebalancesmb.com/types-of-retailers-2890189
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