Retailing: Definition, Types, Its Characterstics

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Retailing is the distribution process of a retailer getting goods from manufacturers, wholesalers or agents and selling them to consumers. It involves activities such as supply chains and distribution channels that serve retailers, relationships between suppliers and customers, pricing strategies and marketing techniques.

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Philip Kotler defines retailing as “all the activities involved in selling goods or services directly to final consumers for personal or business use”.

David Gilbert defines retailing in the following words, “any business that directs its marketing efforts towards satisfying the final consumers, based upon the organization of selling goods services as a means of distribution.”

“Retailing includes all activities directly related to sales of goods and services to the ultimate consumers for personal and non-business use.” W.J. Stanton

“Retailing is selling final consumer products to households.” Mc.Carthy

“Retailing consists of those activities involved selling directly to ultimate consumers.” Cundiff and still.

4 Characteristics of Retailing

5 Types of Retailing

Retailing can be divided into five types. Here are the types of retailing that exists today –

Service Retailing:

Service retailing involves providing a wide range of services to customers. Such as salons, spas, and fitness centres, among others. This type of retailing is all about the experience and quality of services provided to the customers.

So we can simply can say this shows various types of retail stores like department stores, stores, supermarkets, grocery stores, catalogue showrooms, drug stores, superstores, discount stores, extreme value stores etc.

Here are some examples of service retailing including gyms, hair salons, and wellness centres, which provide services to customers in exchange for payment.

Internet Retailing:

It is also known as e-commerce. Because it is the process of buying and selling products online. Internet retailing has become increasingly popular in recent years. We can simply say that Internet retailing or online retailing operates on a similar principle of selling small quantities of items to the ultimate consumer.

But they service a bigger market and lack a physical retail shop where the customer may touch or try the product. As it provides customers with the convenience of shopping from anywhere, at any time. Online retailers such as Amazon, Alibaba, and eBay are prime examples of internet retailers.

Corporate Retailing:

Corporate retailing involves companies selling their products directly to customers. Without the involvement of middlemen/contacts. We can simply say that the practice of selling goods through corporate channels such as chain stores, partnerships, and marketing companies.

Corporate retailing focuses solely on the parent or partner brand’s products. Corporate retailing is often seen as a more efficient and cost-effective way of doing business. As companies can bypass wholesalers and distributors. So here are some more examples of corporate retailers including Apple and Nike, which have their own retail stores.

Non-Store Retailing:

Non-store retailing involves the sale of products and services without the use of a physical store. This can take many forms, including direct selling, vending machines, and home shopping networks.

In simple words, we can say that a style of retailing in which the transaction takes place outside of traditional shops or stores. It is further classified as direct selling (when the corporation uses direct tactics such as door-to-door selling).

And automated vending (installing automated vending machines which sell and offer a variety of products without the need for a human retailer). So direct selling such as Avon or Amway, involves salespeople selling products to customers in their homes. So we can also say that vending machines are also a form of non-store retailing, as they sell products without the need for a physical store.

Store Retailing:

Store retailing involves the sale of products and services through physical stores. So this type of retailing is the most traditional and widely recognized, as it involves customers physically going to a store to make a purchase.

So store retailing can take many forms, such as department stores, supermarkets, and convenience stores. Here are few examples of store retailers including Walmart, Target, and Costco.

4 Characteristics of Retailing

Here are the four key characteristics of retailing: large number of small retailers, high degree of competition, low margins, and seasonal demand.

A large number of Small Retailers

The retail industry comprises many small retailers who sell products or services to end-users. Small retailers operate in a variety of forms, such as brick-and-mortar stores, e-commerce platforms, and mobile applications. These retailers differ in their size, location, and product offerings.

As a small retailer, you have the advantage of being closer to your customers and being able to offer personalized services. However, if you may face challenges in terms of competition, economies of scale, and access to financing. To succeed as a small retailer, you need to understand your target customers, build a powerful brand, and power technology to simplify your operations.

High Degree of Competition

Due to the large number of retailers in the market, competition is intense, and retailers needs to differentiate themselves from their competitors. The competition can come from various sources. For examples we can say that local and national retailers, online marketplaces, and new entrants.

To succeed in a competitive market, you need to identify your Unique Selling Proposition (USP) and communicate it effectively to your customers. Your USP can be based on various factors, Like as price, quality, convenience, and customer service/product selection. By differentiating yourself from your competitors, you can attract and retain loyal customers.

Low Margins

Retailers operate on low margins, and the profitability of the business is dependent on the volume of sales. So the low margins can be attributed to various factors. Such as competition, price-sensitive customers, rising operating costs, and promotional expenses.

To improve your margins, you need to be optimize your inventory management, reduce your overhead costs, negotiate better supplier terms, and implement effective pricing strategies. By maximizing your profitability, you can reinvest in your business, expand your product offerings, and enhance your customer experience.

Seasonal Demand

Demand for products or services is often seasonal, and retailers need to adjust their operations accordingly. Seasonal demand can be influenced by various factors, such as weather, holidays, and events.

To manage your seasonal demand, you need to plan your inventory, marketing, and staffing in advance. By analyzing your historical data and market trends, you can predict your future demand and prepare accordingly. You can also leverage technology to automate your processes and improve your efficiency.

History of Retailers

A long time ago 🪄 , people used to buy things they needed from small shops or street vendors. But in the 1980s, things started to change in India. The government allowed more businesses to open up, so big companies like Raymond’s and Bombay Dyeing started opening up their own stores. These stores were really big and sold lots of things like clothes, electronics, and groceries.

Then, in 1995, even more massive stores opened up, like Food World and Planet M these are the examples. These stores were even bigger than before and had everything you could want. They were like massive supermarkets or malls where you could buy anything you wanted in effective price as well.

These big stores got really good at making sure they had everything you needed in stock, and they started using new technology to help them manage their businesses. So they also started working together more and more. So by teaming up with other companies or buying them out.


Pahwa A. What Is Retail? Retailing Types, Functions, & Characteristics. Feedough. Published June 20, 2019. Accessed February 15, 2023.

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