Page 8 - DMGT552_VISUAL_MERCHANDISING

Unit 1: Introduction to Retail

confectionery, which involve members such as agents, wholesalers, supermarkets, convenience Notes
stores, petrol stations, vending machine operators and so on. Channel members, or marketing
intermediaries as they are sometimes referred to, take on activities that a manufacturer does not
have the resources to perform, such as displaying the product alongside related or alternative
items in a location that is convenient for consumer to access for shopping.
Retailing consists of the sale of goods or merchandise from a fixed location, such as a department
store or kiosk, or by post, in small or individual lots for direct consumption by the purchaser.
Retailing may include subordinated services, such as delivery. Purchasers may be individuals
or businesses. In commerce, a retailer buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler, and then sells smaller
quantities to the end-user. Retail establishments are often called shops or stores.

Retailing is a distribution channel function where one organisation buys products from supplying
firms or manufactures the product themselves, and then sells these directly to consumers.
A retailer is a reseller (i.e., obtains product from one party in order to sell to another) from
which a consumer purchases products. In the US alone there are over 1,100,000 retailers according
to the 2002 US Census of Retail Trade.
In the majority of retail situations, the organisation from which a consumer makes purchases is
a reseller of products obtained from others and not the product manufacturer. But as we discussed
in the Distribution Decisions tutorial, some manufacturers also operate their own retail outlets
in a corporate channel arrangement. While consumers are the retailer’s buyers, a consumer does
not always buy from retailers. For instance, when a consumer purchases from another consumer
(e.g., eBay) the consumer purchase would not be classified as a retail purchase. This distinction
can get confusing but in the US and other countries the dividing line is whether the one selling
to consumers is classified as a business (e.g., legal and tax purposes) or is selling as a hobby
without a legal business standing.
As a reseller, retailers offer many benefits to suppliers and customers as we discussed in the
Distribution Decisions tutorial. For consumers the most important benefits relate to the ability
to purchase small quantities of a wide assortment of products at prices that are considered
reasonably affordable. For suppliers the most important benefits relate to offering opportunities
to reach their target market, build product demand through retail promotions, and provide
consumer feedback to the product marketer.
Retail companies make up a significant portion of nation businesses. The companies not only
create jobs, but also make a direct connection with customers who need the retail products.
Whether you plan to seek a job in retail or want to open up your own retail business in the near
future, it is helpful to get a clear understanding of what retailing means.

Retailing is the act of selling tangible products to an end user or consumer. The end user is the
person who actually uses the product for his personal needs. There are three main parties
involved when a product is released. First the manufacturer produces the product, then the
distributor or wholesaler distributes it to retailers, and finally the retailer sells the product to an
end user. In short, retailers present the products to the public so that everyday people can view
and purchase them.

Self Assessment

Fill in the blanks:
1. For consumers the most important benefits relate to the ability to purchase small quantities
of a ……………… assortment of products at prices that are considered reasonably affordable.

LOVELY PROFESSIONAL UNIVERSITY 3