Retail services- An important link in the supply chain.

To understand the retail services business, let us start with understanding what retail means. Broadly, ‘retail’ is the sale of goods and services from individuals or businesses to the end-user. It refers to sale in small quantities. The end user is the person who uses the product. For example, the end the end user of a pharmaceutical product is the patient who takes it. In other words the end user is the non-seller.


Retailing forms an important component in the supply chain. A retailer buys goods, products or services from the manufacturers directly or through a wholesale services provider and then sells smaller quantities to the consumer for a profit. Retailing can be done door to door or by delivery or in fixed locations like stores or the market. Online retailing is a form of non-shop retailing. In case the goods need to be delivered, the delivery of the said goods is also part of the retailer’s job.


In some regions, the retail business is dominated by small family-run stores, but this market is being taken over by large retail chains. The retail business is broadly classified into the following. Food products, Soft goods or consumables (eg clothing, fabrics etc) and Hard goods or durable goods (eg appliances, electronics, furniture etc).


Let us take a look at the different types of retailers. First we have the department stores, which are large stores that offer a range of soft as well as hard goods. Such stores also offer good customer service. Then there are the discount stores, which offer a range of products and services but at very affordable rates. Next we have the ‘mom and pop’ shops which are small outlets that are run by the individual or by the family. Apart from these common kinds of retailers there are many more like Specialty stores, Boutiques, General stores, Convenience stores, Hypermarkets, malls, Vending machines as well as the online e-retailers.


So how is the pricing determined at retail outlets? Pricing is usually based on a mark up on the retailers cost. Prices are fixed and displayed on signs or labels.


Let us now take a look at the various methods by which consumers can receive goods from a retailer. One method is the counter service. Here the goods are out of reach for the customer and must be obtained by the seller. This kind of retailing is common in the case of expensive products like watches and jewellery and in the case of medicines and liquor. Then there is the delivery service for goods like pizzas and local restaurant menu items. Door-to-door sales is another method of retailing. This is where the salesperson sometimes travels with the goods for sale. Self-service is where goods are handled and examined before purchase. And in this digital world today, Digital delivery or Download where goods, such as music, film, and electronic books and subscriptions to magazines, are delivered directly to the consumer.


Based on their customer demographics, lifestyle and purchase behavior, retailers can choose a format that provides different retail mix to their customers.

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