Goods don’t just make their way to customers. There are complex systems that bring commodities from factories to consumers, and retailers are an essential part of the process. Learn more about what a retailer does, how retailers fit into the distribution system, and the different kinds of retailing.
If there’s a product you’re looking for, you can likely find it somewhere—whether it's through an online vendor or the corner store down the block. It’s a retailer’s job to ensure these items are procured and made available to you in the right place and at the right time.
A retailer is an individual or entity that sells goods directly to the general public. This direct-to-consumer (DTC) selling is distinct from wholesaling, where sales are made to businesses or institutions (usually for resale).
Retailers can sell their goods through several different models. Some retailers opt for in-store, brick-and-mortar premises, but increasingly, retailers are making their sales online using ecommerce tools.
Typically, a retailer isn’t the manufacturer of the items they sell. Instead, they will purchase them from a wholesaler or factory. A retailer is primarily responsible for the following activities: market research, item procurement and sale, and customer support.
A retailer needs to have a good sense of what consumers are looking for—and their buying habits and preferences. Retailers need to understand which items are in demand, gauge the stock required to meet that demand, and determine which platform or premises will be best suited to deliver those commodities to the desired customer.
Following their insights into market needs and the best form of retailing, a retailer needs to source items from a wholesaler or manufacturer. They then need to price goods appropriately, design promotional offers, and optimize the store experience—whether online or in-person.
Finally, the retailer is involved in the sales process itself—building relationships, answering questions, and offering specialized insights to customers. There are three levels of support provided in retail: self-service retailing, limited-service retailing, and full-service retailing. The level of support is often correlated to the type of goods being sold.
In days gone by, for example, all grocery shopping was done directly through a grocer. Nowadays, grocery shopping is often self-service. Limited- and full-service retailing is usually employed when more specialized goods are for sale and buyers need certain information to help them arrive at a decision. For example, an electronics store may use a limited-service model of retail. If an item requires installation and possibly even maintenance, that’s where you’d likely find full-service retailing.
Different retail models exist to meet different consumer needs and buying preferences. The three types of retailing are store retailing, non-store retailing, and corporate retailing.
Store retailing involves the sale of items to end users in a physical store. Sales personnel keep shelves fully stocked and tidy, and provide support to shoppers as necessary. Examples of store retailing would include a local convenience store or an independent bookshop.
Non-store retailing is a burgeoning industry. It takes place when items are sold outside the traditional retail model (i.e., outside a brick-and-mortar store). This can occur via vending machine, mail, door-to-door, or online. This kind of retailing might include a seller’s online shop, or even make use of ecommerce platforms like eBay or Facebook Marketplace.
Within non-store retailing, you can find direct selling (where a retailer is involved) and automated vending (where transactions take place without a retailer needing to take action to close a sale). One of the most familiar examples of non-store retailing comes from ecommerce giant Amazon.
Retailing isn’t all about individual entities. That’s where corporate retailing comes into play. A chain store or an individually owned franchise are examples of corporate retailing—and these types of stores play a prominent role in the retail sector.
In both examples, stores would only stock the goods of a specific brand. The difference is in ownership. While a parent company owns a chain store, a franchise is run by an individual within the franchising rules and standards of a brand. Gap and Ikea are both examples of corporate retailing.
Retailing has many upsides—from controlling what you stock and where to overseeing customer experience and order fulfillment.
Retailers have the opportunity to develop strong relationships and build loyalty with customers. While this sort of customer engagement is maximized in in-store retailing, non-store and online retailers can still provide a seamless and personalized experience that integrates some of the best elements of shopping in-store.
With thorough planning for peak seasons, insights into customer demand, and effective inventory management, retailers can keep profit margins high. You don’t need to account for manufacturing costs and other high operational expenses as a retailer. And if you choose to eliminate the cost of running a brick-and-mortar store, you can enjoy an even greater profit margin through ecommerce.
One of the benefits of store retailing is reduced complexity in ecommerce fulfillment. But there are service providers that make this process simple for online retailers so that they don’t have to spend their time managing fulfillment logistics. This part of the retailing process can be outsourced to a third-party logistics (3PL) provider like Airhouse—so you can focus on growing your business instead.
A retailer has more to offer in product variety. Logistics and economics in wholesaling mean that buyers are unlikely to locate numerous items at a single wholesaler. A retailer can fill in these gaps and keep a wider variety of stock. This improves the customer's experience and increases business opportunities for the retailer.
Whether you opt for in-store, online sales, or both, retailing is a dynamic business. Retailers need to keep their eye on many moving parts. It pays to partner with the right ecommerce fulfillment provider so you can spend your time maximizing business gains.
Airhouse helps DTC companies streamline the fulfillment process and optimize the experience for their online buyers. With transparent operations and a la carte fulfillment pricing, you’ll remain in control of your business while freeing up time and headspace to focus on your brand’s strategic business priorities.
Connect with Airhouse to learn how we can integrate into your retail business and scale your online store through effective ecommerce fulfillment.
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