Types of Retail Operation

   Retail Operation and its types (Retail Outlets)

• Market - Any system or place where parties are engaged in exchange of either goods or services is called as market. The parties are often called as buyers and sellers. The seller offers his goods or services to the buyer who in return purchases it in exchange of money.
• Goods - Tangible (things which can be seen and touched) physical products which are transferred from a seller to the buyer (consumer) to fulfil the latter’s need are called as goods.

Jack owned two laptops which he sold to Mike. In this case Jack is the seller while Mike is the buyer. Laptops are the goods which were earlier in Jack’s custody and now belong to Mike.

What is Retail? 

Retail involves the sale of goods from a single point (malls, markets, department stores etc.) directly to the consumer in small quantities for his end use. In a layman’s language, retailing is nothing but transaction of goods between the seller and the end user as a single unit (piece) or in small quantities to satisfy the needs of the individual and for his direct consumption.

Let us understand the concept with the help of an example.

Tim wanted to purchase a mobile handset. He went to the nearby store and purchased one for himself.

In the above case, Tim is the buyer who went to a fixed location (in this case the nearby store). He purchased a mobile handset (Quantity - One) to be used by him. An example of retail.

The store from where Tim purchased the handset must have shown him several options for him to select one according to his budget and need.

From where do you think the store owner (also called the retailer) purchased all the handsets?

Here the manufacturers and the wholesalers come into the picture.

The retailers purchase goods in bulk quantities (huge numbers) to be sold to the end-users either directly from the manufacturers or through a wholesaler.

The Supply chain

Manufacturers	........................	Retailers	................	End User (Consumer)
	Wholesalers

• Manufacturers - Manufacturers are the ones who are involved in production of goods with the help of machines, labour and raw materials.
• Wholesaler - The wholesaler is the one who purchases the goods from the manufacturers and sells to the retailers in large numbers but at a lower price. A wholesaler never sells goods directly to the end users.
• Retailer - A retailer comes at the end of the supply chain who sells the products in small quantities to the end users as per their requirement and need.

The end user goes to the retailer to buy the goods (products) in small quantities to satisfy his needs and demands. The complete process is also called as Shopping.

• Shopping - The process of purchasing products by the consumer is called as shopping. However there are certain cases where shopping does not always end in buying of products. Sometimes individuals do go for shopping but return home empty handed. Such a shopping is merely for fun and is called window shopping. In window shopping, individuals generally go to the market, check out various options and their prices but do not buy anything. This kind of shopping helps to break the monotony.

Types of Retail outlets

• Department Stores

                                                                      

A department store is a set-up which offers wide range of products to the end-users under one roof. In a department store, the consumers can get almost all the products they aspire to shop at one place only. Department stores provide a wide range of options to the consumers and thus fulfill all their shopping needs.

                                         

Merchandise: 

Electronic Appliances
Apparels
Jewellery
Toiletries

• Cosmetics
  Footwear
  Sportswear
  Toys
  Books
  CDs, DVDs

Examples - Shoppers Stop, Pantaloons

Discount Stores

Discount stores also offer a huge range of products to the end-users but at a discounted rate. The discount stores generally offer a limited range and the quality in certain cases might be a little inferior as compared to the department stores.

Wal-Mart currently operates more than 1300 discount stores in United States. In India Vishal Mega Mart comes under discount store.

Merchandise:
Almost same as department store but at a cheaper price.

• Supermarket

A retail store which generally sells food products and household items, properly placed and arranged in specific departments is called a supermarket. A supermarket is an advanced form of the small grocery stores and caters to the household needs of the consumer. The various food products (meat, vegetables, dairy products, juices etc.) are all properly displayed at their respective departments to catch the attention of the customers and for them to pick any merchandise depending on their choice and need.

Merchandise:
Bakery products
Cereals
Meat Products, Fish products
Breads
Medicines
Vegetables
Fruits
Soft drinks
Frozen Food
Canned Juices

Friends Supermarket, Ghorahi, Dang..

• Warehouse Stores

A retail format which sells limited stock in bulk at a discounted rate is called as warehouse store. Warehouse stores do not bother much about the interiors of the store and the products are not properly displayed.

• Mom and Pop Store (also called Kirana Store in Nepal)

Mom and Pop stores are the small stores run by individuals in the nearby locality to cater to daily needs of the consumers staying in the vicinity. They offer selected items and are not at all organized. The size of the store would not be very big and depends on the land available to the owner. They wouldn’t offer high-end products.

Merchandise:
Eggs
Bread
Stationery
Toys
Cigarettes
Cereals
Pulses
Medicines

Speciality Stores

As the name suggests, Speciality store would specialize in a particular product and would not sell anything else apart from the specific range. Speciality stores sell only selective items of one particular brand to the consumers and primarily focus on high customer satisfaction.

Example -You will find only Reebok merchandise at Reebok store and nothing else, thus making it a speciality store. You can never find Adidas shoes at a Reebok outlet.

• Malls

Many retail stores operating at one place form a mall. A mall would consist of several retail outlets each selling their own merchandise but at a common platform.

• E Tailors

Now a days the customers have the option of shopping while sitting at their homes. They can place their order through internet, pay with the help of debit or credit cards and the products are delivered at their homes only. However, there are chances that the products ordered might not reach in the same condition as they were ordered. This kind of shopping is convenient for those who have a hectic schedule and are reluctant to go to retail outlets. In this kind of shopping; the transportation charges are borne by the consumer itself.

Example - EBAY, Rediff Shopping, Amazon. Nepbay.com, kaymu.com

• Dollar Stores

Dollar stores offer selected products at extremely low rates but here the prices are fixed.

Example - 99 Store would offer all its merchandise at Rs 99 only. No further bargaining is entertained. However the quality of the product is always in doubt at the discount stores.

Difference between Departmental Store and Supermarket

Departmental stores and supermarkets are two large retail shops that offer customers a wide range of choice. However, departmental stores and supermarkets are not the same. The key difference between departmental store and supermarket lies in the type of products they stock; departmental stores stock a variety of products including clothing, jewellery, accessories, cosmetics, toy, stationery, etc.

Supermarkets stock food items and other household items.

Definition:

Departmental Store: A department store is a large retail store offering a variety of merchandise and services and organized in separate departments.

Supermarket: Supermarket is a large self-service retail market that sells food and household goods.

Size:

Departmental Store: Departmental stores are larger than supermarkets.

Supermarket: Although supermarkets are large stores, they are typically smaller than departmental stores.

Floors:

Departmental Store: Departmental stores have many floors.

Supermarket: Supermarkets usually have only one floor.

Products:

Departmental Store: Departmental stores stock a variety of products.

Supermarket: Supermarkets do not usually stock clothing, jewelry, and hardware.

Fresh Products:

Departmental Store: Departmental stores do not usually stock fresh produce or meat.

Supermarket: Supermarkets stock fresh produce, dairy, and meat.

Ownership:

Departmental Store: Departmental stores are not typically owned by corporate chains.

Supermarket: Supermarkets are owned by corporate chains.