Retailers : Characteristics, Types, Importance and Role

Who is a Retailer?

A retailer can be defined as a type of business that includes purchasing goods or merchandise from wholesalers, manufacturers, or distributors and then selling them directly to users in small amounts for a profit. Retailers are the final link in the supply chain of product buying and selling. They operate from various sites such as physical stores, E-Commerce, and others and are also aware of consumers’ needs, taste and accordingly, they provide feedback to the manufacturer for modifications in the goods. They also impose offers, coupons, etc. in order to increase their sales. They provide different products at different prices of many brands and offer varieties according to customers’ tastes and needs. They bridge the gap between producers and consumers and also contribute to economic development, job creation, and customer satisfaction.

Geeky Takeaways:

• Retailers operate at the point of sale, interacting directly with end consumers through physical stores, online platforms, or a combination of both.
• Retailers offer a diverse range of products or services, catering to specific consumer needs and preferences. They may specialize in specific product categories or provide a broad selection.
• Retailers manage the supply chain, including sourcing, inventory management, and distribution, to ensure products are available for purchase and meet consumer demand.

Characteristics of Retailer

1. Small Quantity: Retailer provides goods in small quantities as per customers’ needs, if retailers won’t exist in the supply chain then it would become very inconvenient or customers to purchase the product.

2. Mediator: Retailer buys products from the manufacturer in large amounts and sells them in small quantities to consumers. Retailer helps in easy access to products manufactured. He acts as the middleman between the manufacturer and the consumer.

3. Branding and Marketing: Retailers help in brand promotion and marketing. They create brand awareness through store displays, advertisements, hoardings, and other promotional activities.

4. Personal Contact: Retailers maintain personal connections with consumers, which helps them to know trends and changing requirements of the customers. Customers trust retailers more than producers and wholesalers. Retailer hence provides all feedback to the manufacturer.

5. Economic Growth: Retailers facilitate payment processing, which ensures smooth and secure transactions for customers. Retailers contribute to economic growth by generating sales revenue and creating job opportunities in the retail sector.

Types of Retailers

Retailers can be of many types but broadly they are divided into two major categories.

1. Itinerant Retailers are those who do not have any fixed place to operate from. They keep on moving from street to street with their wares, they are also called mobile vendors. They search for customers to sell their goods, deals with low-price services and generally invest less amount in business, and operate with fewer resources. These retailers emphasize providing goods at the doorstep of customers. Type of Itinerant retailers are the following:

• Hawkers and Peddlers: Hawkers and peddlers move in the streets in search of customers. Hawkers have wheel carts while peddlers keep the good for selling on their heads, and hands.
• Periodic Market Traders: They sell the goods on some fixed days of the week at some particular place.
• Street Traders: They sell their goods on busy streets like temples, bus stands, stations etc.

2. Fixed Shop Retailers are those who have their own shop at some fixed place. They do not search for customers in the streets as they have their fixed place for selling goods. Two types o fixed shop retailers are:

• Small Scale Retailer: Small-scale retailers are those who run their business operations on a small scale that deals with the daily use products with various varieties at a fixed place. For example, General stores, specialty stores, single line stores, streel shops, etc.
• Large-Scale Retailers: Large-scale retailers deal with a large stock of goods, they purchase goods in bulk. They have huge investments in their business. They are mostly located in a central place and in urban areas where a huge number of customer visits. For example, Departmental stores, Supermarkets, Chain Stores, Etc.

Importance of Retailers

1. Manages the Supply Chain: Retailers are the final link in the supply chain. A retailer buys large amounts of commodities or merchandise from manufacturers or wholesalers and then sells in small lots to customers. Retailers contribute by gathering a diverse range of products and services from various manufacturers and making them available to consumers.

2. Customer’s Convenience: Retailers act as a bridge between producers and consumers, making products and services easily accessible to the general public. They provide a convenient and efficient way to customers for purchasing the products they need either through physical stores or E-Commerce sites etc, also they facilitate home delivery of products.

3. Branding and Promotional Activities: Retailers serve as important points for promoting a brand. They introduce new items to the market and help build brand awareness among buyers by imposing sales, offers, coupons, etc. on products.

4. Feedback to Manufacturer: Retailer interacts with customers and maintains a personal connection with customers, so they are well aware of the taste, specifications and requirements of end users. Hence, retailers provide feedback to the manufacturer or wholesaler suggesting modifications in goods as per customer’s behavior towards the product.

Role of Retailers in Business

1. Risk Bearing: Retailer shares the risk with manufacturers and wholesalers. For Example, ‘Short Kurta’ are in trend and its sales are also high, so the retailer will have a good stock of this product, but if suddenly a new trend has arrived in the market then all those old trend products will now not be sold, hence there will be the loss of manufacturer, wholesaler, as well as to retailer.

2. Promotional Activities: Retailers are always indulged in promoting the goods, and branding them, by imposing offers, gift vouchers, and discounts on the product.

3. Personal Relations with Customers: Retailers maintains good relation with the customers, and with this personal connection gets aware of the taste, preferences and demands of the customer. Retailers provide this feedback to manufacturers in order to make so and so changes in products to make it as per customers’ requirements.

4. Economic Growth: Financial assets and investments are mobilized since small shops are set up with less investment. An increase in retailers’ sales signals a healthy economy.