Unit-2 RETAIL TRADE

UNIT-2

RETAIL TRADE

Retailer

A retailer is a middleman who buys goods from the manufacturer or from the wholesaler and sells to the final consumers in small quantities. He acts as a connecting link between the wholesalers and the consumers.

Retail trade

  Retail trade consists of buying goods from wholesalers in large quantities and selling them to consumers in small units with the view to make a profit. 

Functions of the retailer.

1. Breaking bulk.

            The retailer buys goods from the wholesalers in large quantities and cuts it into smaller quantities or units and sells to the consumers according to their demand.

2. Provides goods in convenient quantities

            Retailer buys goods from different wholesalers and keeps in his shop and sells in smaller quantities according to the convenience of the buyers.

3. Provides goods in convenient locations and in time

            The consumers can buy the goods from the retailers who are situated nearby them, and whenever the consumers want they can buy the goods.

4. Provides a variety of goods

            A retailer deals with number of wholesalers at a time so hebuys goods and keeps in his warehouse. Comparing to the other traders he will have wide varieties of goods.

5. Provides a delivery service for some goods

            Certain retailers may use their own vehicles to deliver the goods to the consumers according to the order from them.

6. Provides advice and information to consumers

            An expert retailer can give advice and information about a product to the buyers and provide the technical knowledge to handle and operate it.

7. Provides credit to customers

             Some retailers provide credit facility to their regular customers.

8. Provides after-sales service

             If any problem is happened to the products after immediate purchase, the retailer is responsible to replace or refund for it. And during the warranty or guarantee period the retailers or the manufacturers have to repair or replace the damaged products.

9. Deals with customers’ complaints

            Retailers help the consumers even if there is any problem due to the usage of products and inform the manufactures to solve it.

10. Acts as a link between customers and the wholesalers of goods.

            A retailer acts as a link between the consumers and the wholesalers or manufacturers.

TYPES OF RETAILER

Retailers are broadly classified into two,

·         Small scale retailers

·         Large scale retailers

1. Small scale retailers

            These are small scale traders but don’t have any fixed place for retailing. They move from place to place for selling their products. They carry their goods on their heads or wheeled vehicles. Itinerant traders are of the following types,

            a. Hawkers

They are traders selling goods in public places. They always shout about their ware’s price and quantity. Eg- Vegetable traders, fruits traders, etc

            b. Pedlars

A trader, who travels to different places to sell small goods, usually by going from house to house, is known as pedlar.  Eg- Small house hold traders.

            c. Street traders

These are traders who keep their goods in big cities or in towns especially in busy streets.

Eg- small bookshops, pen, clothes, etc

            d. Market traders

 These traders display their goods in different localities related with the festivals like Id and celebrations of new-year, etc. They can be seen in different market places.

            e. Seasonal Traders

These are traders who can be seen in certain seasons. Eg- sellers of umbrellas in rainy season, Woolen clothes at winter season, etc.

g. Pop up shops

A “pop-up shop” is a short-term, temporary retail event that is "here today, gone tomorrow". Demand for products sold in pop-up retail is typically short-lived. Pop-up retail stores are found most often in the apparel and toy industries.

2. Large scale retailers

These are large scale retailers having fixed place or location for trading. They are as following,

            a. The general Shop

It is a small scale retail establishment which stocks wide varieties of consumer goods in a single shop. The aim is to supply the day- to- day requirements of customers in a locality.

Eg- Local shops.

            b. The specialty Shop

It is a small shop which specializes on one line of goods. It sells limited varieties of specialty goods in a single line.

Eg- Clothes shop, Jeweler shops, Sportswear shops, Foot wears shops, etc

            c. Departmental Shops

 A departmental shop is large retail outlet comprising a number of small shops or departments. Each department deals with different types of products and all these departments will be under one roof and ownership.

Eg- Big shopping malls

            d. Multiple Shops or Multiple chain.

The multiple shop or chain store isone of the series of stores operated under a centralized management or ownership. The branches of the multiple shops will be situated in different parts of the city or country.

            e. Super Market

A supermarket is a large retail outlet selling a wide range of consumer goods, having minimum 200 square meters of sales area and is normally situated in the cities.

Normally it provides self-service and displays the goods.

            f. Hyper Market.

Hypermarkets are very big supermarkets having more than 5000 square meters of sales area. It is normally situated in the outside of the cities because of its large size. It offers wide range of goods as well as facilities like parking places, refreshment parks, etc.

            g. Voluntary Chain.

It is a group of independent retailers who join together in order to make profit from bulk purchases. They share the trade discounts given by the seller.

            h. Shopping Centre.

A shopping centre refers to a group of different shops located in a town or city. It offers one stop shopping facilities to the customers.

HOME SHOPPING.

            It is a type of latest retailing method by which the customers can order for the product without the middlemen, at their own homes. In this method the customers get information about the product as well as the product at their doors. The following are the important forms of home shopping,

            1. Mail order firms.

It is type of business unit specializes in a particular kind of retailing by which sales and purchases are done through post or mail without the personal contact between the buyers and the sellers. They advertise about their products and services through newspapers, internet, etc.

            2. Shopping by Phone.(Tele shopping)

In this method the sellers advertise about their product in the newspapers, TV, etc. and get orders through telephones and dispatch products by post.

            3. Shopping by TV.

It is similar to shopping by phone, here the firms advertise about their products through TVs and get orders by telephone or internet.

            4. Shopping on Internet.

It is the latest form of home shopping by which customers can collect information about the products and order through internet and email. Customers can pay money through the internet using cash cards and can deliver by post.

MODERN TRENDS IN RETAILING

            1. Branding- It means the selling of goods under a well-known trade mark or brand name. Brand name must be indicated clearly on the package or container. Brand helps the customers to distinguish a particular product from other similar producers.

            2. Packaging- It means the covering of goods in different ways using different materials in order to protect the goods as well as to carry from one place to another.

          3. Self-service- It is the latest trend in the present market system. Normally large scale retailers provide thisfacility. In this method the customers are allowed to choose the products by themselves without the force from the sales staffs. Here the retailers display the branded products in their shops. Eg-Supermarkets, Hypermarkets, etc

            4. After-sales service- It is offered by the retailers or manufacturers to the buyers after sales is taken place.The products are to be repaired or replaced if any faults occurred within a certain period. Eg- Guarantee, Free installation and fitting, repair, etc.

            5. Bar-coding- It consists a number of parallel black strips and which is printed on the wrapper of the product itself. It consists all the details about the product and a special scanning machine is used to read this.

            6. Loyalty card- Under this scheme the regular customer is given a card which benefits him when he purchases goods repeatedly from the same shop. When the purchases reach to the fixed target, the customer will be given a cash discount or a voucher for further purchases.    

            7. AVM (Automatic Vending Machines)-It is an electronic machine which vendors the goods without the assistance of human. We get goods when we insert certain money in this machine.

            8. EPOS (Electronic Point of Sale)- It is an electronic device installed on the counter of the shop for registering the cash transactions. It helps the customers for self-check-out using electronic cash devices.

            9. Omni channel Retailing. It is a trend of retailing with the integration of mobile marketing, engaging social media campaigns, and a well-designed website together for retailing.

            10 Virtual retailing (E-Shop). A Virtual Business conducts all or most of its business via the internet and does not have physical premises to interact with customers face-to-face. Eg:- Amazon, Ali express.

ADVANTAGES OF LARGE SCALE RETAILING.

a. Advantages to the retailers

1. They get cash discounts and trade discounts due to bulk purchase.

2. Increased sales due to the wider choice of goods.

3. High turnover due to the cash sales.

4. Self-services reduce the staff costs such as wages or salaries.

           

b. Advantages to the consumers

1. Lower price to the goods.

2. Wider choice for fresh goods

3. Freedom to select the goods without the force from the salesmen

4. Better facilities for shopping.

DISADVANTAGES OF LARGE SCALE RETAILERS.

a. Disadvantages to the retailers

1. Large capital investment is required for warehouse, facilities, etc

2. High operating expenses such as camera and security measures.

3. Chance of theft due to self service

            b. Disadvantages to the customers

1. There are no personal services from salesmen.

2. There are no credit facilities.

3. Increased price due to high cost of operation.

E-COMMERCE (ELECTRONIC COMMERCE)

E-com. is an advanced form of business using electronic devices such as computers and internet for buying and selling goods. Shopping on internet or on-line shopping is an example of E-com. All traditional activities such as advertisements, ordering and the payment can be taken place through the internet without being in a face to face contact between the buyer and the seller.

Advantages of E-commerce.

1. Business can be taken place without the face to face contact between the buyer and the seller.

2. Ordering and the payment can be done at home

3. Increased speed of transactions

4. Worldwide sales area

5. Customers can shop for 24 hrs

Disadvantages of E-commerce.

1. Consumers should have technical knowledge about how to use computers.

2. Chance of fraudulent practices due to the malpractices in cyber sector.

3. It is not suitable for rural areas or undeveloped areas where there is no internet coverage.

4. Difficult to set up websites.

5. High cost of installation such as internet connection, computers, etc.

REASONS FOR THE SURVIVAL (EXISTENCE) OF SMALL SCALE RETAILERS.

Or

EXPLAIN WHY SMALL SHOPS ARE POPULAR WITH CONSUMERS?

Ans: 1.Small shops are close to the consumers and opening hours are enough.

2. Consumers get personal services and information about the products.

3. Consumers get informal credit from the sellers.

4. Consumers can replace goods immediately if any damage happened. 

5. Small shop sells goods according to the demand of a particular area where it is located.

6. Consumers get high quality goods.