Importance of retail marketing cannot be denied for today’s manufacturers. Retail stores play an important role in high-level exposure of businesses and widespread distribution of products. In retail stores, retailers get opportunities to interact with customers (the ultimate consumers of your products).
In addition to this, you can promote products to them and also provide chances to them view and test products before making a purchase decision.
The Importance of Retailing
1) Sales to Ultimate consumers of the products
In a retail transaction, the goods and services are sold to ultimate or final consumers. The products don’t get resold after this transaction. Goods and services sold at this point can be used for various purposes such as for domestic use, household use or for industrial use.
Hence, at this point manufacturer can interact with his consumers through retailer and know about their views.
2) A convenient form of selling quantity-wise
The meaning of word retail is to break down the goods in small pieces and reselling them. the goods are bought by the retailer in large quantities from the middleman or manufacturer and bulk is divided into small quantities and sold to consumers as per their requirements.
To do this, the retailer can repack goods in various quantities and shapes so that it is convenient for consumers to choose and carry them to their homes.
3) Convenient Place and Location
Retailer stores are generally set up at locations which are convenient for consumers to reach. A retail store can be of various forms such as it could be a small shop, small store, or a multiplex. Goods can be sold through internet and mobile apps as per the convenience of consumers.
Moreover, shopping online is becoming a new trend because of the advancement in technology and courier services. Therefore, more and more companies are taking their business online where customers can view products at the comfort of their home and buy them.
4) The lifestyle of the people are shaped by retailing
Retailing is an integral part of modern society. People highly depend on retail stores to lead a comfortable life. in the past time, goods and service were made available through the process of trading.
But in present times trading is replaced by buying and selling goods which makes retail stores an important part of the society.
5) Retail businesses contribute to the economy
In many countries, the retail business is one of the biggest contributors to the Gross Domestic Product (GDP) and its contribution has increased as compared to past and is also increasing by leap and bounds. Retailing is a driving force of the economy and its ambition is to encourage sustained growth.
6) Retail dominates the supply chain
In a supply chain, goods and services flow from the manufacturer or a service provider to final consumers and when there is a huge number of consumers and they are distributed worldwide then the role of retail stores become much more important. Retailers play the role of a connecting link between a manufacturer and final consumers.
Because of their crucial importance in the supply chain the structure of retail stores has improved gradually over the years. In modern times, retailing is categorized by large multiple chains and not by small scale independent retail stores. The increasing importance and formalization of retailing have made it a powerful part of the supply chain.
Moreover, the comparison of retailers is being made with manufacturers which shows the increasing dominance of retailers in the distribution channel. In addition to this, the annual turnover of a few retailers such as Wal-Mart is much more than the annual turnover of companies.
All these points show that retail is the most dominating part of the whole supply chain.
7) Retail is interdisciplinary
Retailing has developed from a number of interrelated disciplines such as economics, geography, management, economics, and marketing. Economics is useful to manage the finances of a store. the good knowledge of geography is important to make the right choice of location to open a store.
Management plays an important role in managing your staff and inventory and similarly, right marketing helps you to penetrate in the market.
8) Retailers provide maximum employment
At the present time, the retail world employs maximum people. As per an estimation, one in nine of the workforces is employed in the retail industry. Moreover, two third of the total workforce in the retail world is women and more than half employees in retailing are part-time employees, which provides flexibility to workers to adapt to the particular needs of any employer
In the past, the salaries paid to employees were very low. Therefore, people worked on a temporary basis in the retail sector. But as the work conditions and salaries paid in the retail sector are improving more and more people are considering retail jobs as a permanent career.
9) Retailing is an important subject area of study
Because of the importance of retailing more and more emphasis is being paid to the area of retailing. Retailing is a separate subject of studies like management and marketing. researches have been conducted and professionals being hired to make this sector flourish.
In addition to this, academic journals concentrating on retailing are being published worldwide.
10) Retailing offers scope for expansion in other countries
Retail provides a great opportunity to expand in international markets. A retailer who wants to extend their business by selling their goods in other countries opens stores in different countries to increase the number of consumers of their products.
However, it is not easy to expand your business as it requires a lot of paperwork and formalities to be done to be able to get clearance to take your business to other countries.
11) Retailers rule the channel of distribution
Retailers are becoming the rulers of a channel of distribution. In past times, the power was in the hand of suppliers because of a limited number of suppliers in the market. Retailers had no other option than getting goods from the supplier to sell in their stores. But in present times there are many suppliers for a single type of product.
Therefore, a retailer can make a decision for which brand to stock in their stores and consumers buys products stock provided by the retailers. Therefore, retailers play an important role in shaping the demands of consumers.
12) Provides Comfort and facilities for shopping
Shopping has become a pleasant experience because of all the facilities and comfort provided by chain stores, shopping malls, multiplexes, etc. people now don’t think shopping as work but they look forward to it and consider it as a stress releasing and family activity.
The giant retailers provide various facilities such as air conditioning, parking, entertainment, kids play section, lifts, trolleys to carry goods, and food facilities, etc. and retailing through mobile phones ensures doorstep delivery on all orders placed through the website or mobile apps.
13) Provide services to the manufacturer
The retailer is the end part of the supply chain and he is the one who interacts with the customers. therefore, he has the opportunity to know about the views of customers and their likings and disliking. Retailer gathers this information from his customers and shares it with the manufacturer.
This helps the manufacturer to make the required changes in the quality of the product and improve its services to satisfy their customers. Therefore, a retailer plays an important role in helping the manufacturer to increase his revenue generation.
14) Provision of warehousing and storage
Warehousing is a big problem for a manufacturer. A retailer buys goods in advance from the manufacturer and reduces the problems of warehousing and storage for the manufacturer.
In addition to this, the retailer helps in increasing the sales of goods by displaying them nicely in the retail store.
15) Advantage of an expert and specialist
Retailers are experts and have experience in selling products to customers. he has a better understanding of customers and their likes and dislikes because of this regular contact with them. He stores products as per the need of customers and sells them to customers in different sizes and shapes.
In addition to this, with their experience of selling and knowledge about the product they assist customers to choose the right product for them.
16) Creates utilities and value
Retailer increases the value of the product by creating a place, time, and utility in the distribution of goods. Retailers buy products in bulk and break them in small quantities and sell them in small packs. In this way, he creates form utilities.
Goods manufactured in one corner of the world are consumed in other parts of the world. he buys products from manufacturers and sells them in the local market thereby creating place utility.
The retailer buys products in advance and place them in his store and sell them to the consumers whenever the need arises. By creating these three utility value of goods is increased. The retailer makes sure the regular production and consumption of goods.