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Glossary – Retail

Retail

Nikiforov Alexander
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What is retail?

Retail, or retail trade, is the process of selling goods directly to end consumers in small quantities. The origin of the term is related to the English word "retailer," which translates to "retail seller." The most common example of retail is supermarkets, where customers can purchase goods for personal use. The main goal of retail is to meet customer needs by offering a wide range of products.

Principles of the retail market

In retail, the retailer plays a key role, completing the supply chain by providing end consumers with products from manufacturers. This chain looks as follows:

  • Manufacturer: enterprises that create goods, including factories and plants.
  • Distributor: organizations that purchase goods in bulk for resale.
  • Retailer: sells goods to end consumers.

It is important to understand that retail encompasses all types of businesses that work with end consumers, regardless of the size of the retail space. This can be a large supermarket chain or an individual entrepreneur selling their own products.

Features of retail

One of the main trends in retail is the expansion of the product assortment. Companies strive to cover all customer needs, which leads to the growth of large grocery chains and marketplaces. The markup on goods in retail can vary from 50 to 200%, which is related to high competition and large sales volumes.

Profit in retail is generated from markups, income from additional services, and non-operating activities. Major expenses include staff salaries, utilities, advertising, and marketing. To increase efficiency, retailers use various technologies and techniques:

  • Automation: implementation of inventory management and accounting systems.
  • Assortment analysis: optimization of product offerings based on demand.
  • Merchandising: effective placement of goods to attract customer attention.
  • Loyalty programs: creating incentives for repeat purchases.
  • Self-service: reducing costs by decreasing the need for staff.

Categories of retail

Retail encompasses a wide range of enterprises, including marketplaces, online stores, hypermarkets, and small local shops. The main categories of retail include:

  • Food products: all types of food, including fresh and frozen products.
  • Consumer goods: products used in daily life, such as cosmetics and household chemicals.
  • Durable goods: products with a long lifespan, such as furniture and electronics.
  • Art items: musical instruments, paintings, and books.

Some classifications also include service sector enterprises that apply retail technologies to enhance their efficiency.

Types of retail

Depending on the way customers are served, the size of retail spaces, and sales technologies, several types of retail can be distinguished:

  • Grocery retail: includes supermarkets and grocery stores that offer a wide range of food products.
  • Street retail: retail outlets located in high-traffic areas, such as central streets and multi-story buildings.
  • Non-food retail: sales of non-food items, such as clothing and perfumes.
  • Online retail: sales through online stores that offer a variety of products.
  • Chain retail: companies with multiple outlets under a single brand that ensure uniform prices and assortments.

Each of these types of retail has its own characteristics that allow them to attract different audiences and compete effectively in the market.