Overview

Industry Composition: The retail industry is the last step in the process of getting products to customers efficiently, and should not be confused with the wholesale activities which precede it. The difference between the two is that wholesalers are companies that sell their products to businesses, whereas in retail, the goods are sold directly to the consumer. Wholesale establishments play an important role for retail establishments, as they generally provide retailers with the resources they need to run their business in addition to the goods and products they sell.

Any business that sells goods to individual consumers is a retail establishment. There are many kinds of retail establishments:

  • Department stores: a large retail store organized into departments offering a variety of merchandise and often forms the cornerstone of a mall, such as J.C. Penney’s
  • Discount stores: mass-merchandisers or membership warehouses, such as Costco
  • Category killers: large stores that specialize in one type of merchandise, such as Home Depot
  • E-tailers: sell goods online, such as Amazon
  • Specialty stores: concentrate on one product type and sell it in a way that makes it unique, such as The Body Shop
  • Grocery stores: provide food and beverage, such as Kroger and Jumbo
  • Convenience stores: include gas stations and corner stores

Retail establishments are a huge industry with $4 trillion of revenue in the U.S. alone. There are many different retail sectors: motor vehicles and parts, which involves the sale of new and used cars and comprises 25% of sales in this industry; specialty stores that make up 19% of sales; general merchandise as well as food and beverage, each of which composes 15% of sales; convenience stores that account for 10%; and building material and non-store retailers; each comprises 8% of the sales for the industry.

History:

The retail industry has changed greatly in the last two decades. It used to be comprised of a wealth of small, often family-operated shops, department stores, and shopping malls. Today, however, it is increasingly more common to see people doing their shopping in large mass merchandise stores, specialty stores, or online.

Leaders:

Among retail establishments, the obvious leader is Wal-Mart. Due to its large size; it is capable of economies of scale surpassing those of other companies, with the clout in the bargaining room to match. The closest behind Wal-Mart in terms of sales is The Home Depot, though their sales were only 25 percent of those of Wal-Mart. The Kroger Co. and Target Corporation fall just behind The Home Depot. However, despite Wal-Mart’s impressive sales, the profit margins for that genre of mass-merchandiser are under six percent. In luxury stores, where the goal is not to have the lowest price, profit margins can exceed 15 percent.

Future Outlook:

As the economy regains its step helping increase expenditure, the retail industry is experiencing shifts as it prepares to meet the evolving demands of consumers. To achieve higher growth, retailers should focus on emerging markets as the growing middle class and urbanization is the perfect environment to target. As for established markets, the industry needs to focus on going digital and the emergence of e-commerce, online and mobile app shopping is the future for retailers. This gives the consumer the ability to conveniently shop anywhere, anytime that will encourage more purchases, and allow consumers to feel more in “control”. This will cause a radical rethinking of how to provide goods and services in the retail industry as the traditional brick and mortar model will become less important. More merchandise will be moved online by traditional brick-and-mortar establishments as time goes on.

Another key area is getting closer to consumers to meet their changing demand. The future of the success of retailers lies in tailoring products for each consumer as best as possible. This can be done with the help of technological advancements. Such technology includes business analytics and the collection of consumer buying behavior data along with other miscellaneous information that will help retailers target consumers better.

Utilising social media will also be another key aspect for retailers to grow. Social media allows for rapid and mass marketing; through and by the consumer. Consumers can help spread the word more efficiently through social media than other direct marketing methods. In addition, there are a lot of people who follow brands strictly over social media, making it even more imperative for retailers to build and develop their social media presence.

Developed supply chains will be an important factor for retailers to gain a competitive advantage in a crowded industry. With the increasing convenience of being able to shop anywhere at any time, it is essential to efficiently tackle the rising demand. Consumers are increasingly cognisant of service times when purchasing online items so the faster and more reliable shipments are, the higher the chances are of satisfying and retaining a loyal consumer.

Any business that sells goods to individual consumers is a retail establishment. There are many kinds of retail establishments:

  • Department stores: a large retail store organized into departments offering a variety of merchandise and often forms the cornerstone of a mall, such as J.C. Penney’s
  • Discount stores: mass-merchandisers or membership warehouses, such as Costco
  • Category killers: large stores that specialize in one type of merchandise, such as Home Depot
  • E-tailers: sell goods online, such as Amazon
  • Specialty stores: concentrate on one product type and sell it in a way that makes it unique, such as The Body Shop
  • Grocery stores: provide food and beverage, such as Kroger and Jumbo
  • Convenience stores: include gas stations and corner stores

Retail establishments are a huge industry with $4 trillion of revenue in the U.S. alone. There are many different retail sectors: motor vehicles and parts, which involves the sale of new and used cars and comprises 25% of sales in this industry; specialty stores that make up 19% of sales; general merchandise as well as food and beverage, each of which composes 15% of sales; convenience stores that account for 10%; and building material and non-store retailers; each comprises 8% of the sales for the industry.

History:

The retail industry has changed greatly in the last two decades. It used to be comprised of a wealth of small, often family-operated shops, department stores, and shopping malls. Today, however, it is increasingly more common to see people doing their shopping in large mass merchandise stores, specialty stores, or online.

Leaders:

Among retail establishments, the obvious leader is Wal-Mart. Due to its large size; it is capable of economies of scale surpassing those of other companies, with the clout in the bargaining room to match. The closest behind Wal-Mart in terms of sales is The Home Depot, though their sales were only 25 percent of those of Wal-Mart. The Kroger Co. and Target Corporation fall just behind The Home Depot. However, despite Wal-Mart’s impressive sales, the profit margins for that genre of mass-merchandiser are under six percent. In luxury stores, where the goal is not to have the lowest price, profit margins can exceed 15 percent.

Future Outlook:

As the economy regains its step helping increase expenditure, the retail industry is experiencing shifts as it prepares to meet the evolving demands of consumers. To achieve higher growth, retailers should focus on emerging markets as the growing middle class and urbanization is the perfect environment to target. As for established markets, the industry needs to focus on going digital and the emergence of e-commerce, online and mobile app shopping is the future for retailers. This gives the consumer the ability to conveniently shop anywhere, anytime that will encourage more purchases, and allow consumers to feel more in “control”. This will cause a radical rethinking of how to provide goods and services in the retail industry as the traditional brick and mortar model will become less important. More merchandise will be moved online by traditional brick-and-mortar establishments as time goes on.

Another key area is getting closer to consumers to meet their changing demand. The future of the success of retailers lies in tailoring products for each consumer as best as possible. This can be done with the help of technological advancements. Such technology includes business analytics and the collection of consumer buying behavior data along with other miscellaneous information that will help retailers target consumers better.

Utilising social media will also be another key aspect for retailers to grow. Social media allows for rapid and mass marketing; through and by the consumer. Consumers can help spread the word more efficiently through social media than other direct marketing methods. In addition, there are a lot of people who follow brands strictly over social media, making it even more imperative for retailers to build and develop their social media presence.

Developed supply chains will be an important factor for retailers to gain a competitive advantage in a crowded industry. With the increasing convenience of being able to shop anywhere at any time, it is essential to efficiently tackle the rising demand. Consumers are increasingly cognisant of service times when purchasing online items so the faster and more reliable shipments are, the higher the chances are of satisfying and retaining a loyal consumer.

Any business that sells goods to individual consumers is a retail establishment. There are many kinds of retail establishments:

  • Department stores: a large retail store organized into departments offering a variety of merchandise and often forms the cornerstone of a mall, such as J.C. Penney’s
  • Discount stores: mass-merchandisers or membership warehouses, such as Costco
  • Category killers: large stores that specialize in one type of merchandise, such as Home Depot
  • E-tailers: sell goods online, such as Amazon
  • Specialty stores: concentrate on one product type and sell it in a way that makes it unique, such as The Body Shop
  • Grocery stores: provide food and beverage, such as Kroger and Jumbo
  • Convenience stores: include gas stations and corner stores

Retail establishments are a huge industry with $4 trillion of revenue in the U.S. alone. There are many different retail sectors: motor vehicles and parts, which involves the sale of new and used cars and comprises 25% of sales in this industry; specialty stores that make up 19% of sales; general merchandise as well as food and beverage, each of which composes 15% of sales; convenience stores that account for 10%; and building material and non-store retailers; each comprises 8% of the sales for the industry.

History:

The retail industry has changed greatly in the last two decades. It used to be comprised of a wealth of small, often family-operated shops, department stores, and shopping malls. Today, however, it is increasingly more common to see people doing their shopping in large mass merchandise stores, specialty stores, or online.

Leaders:

Among retail establishments, the obvious leader is Wal-Mart. Due to its large size; it is capable of economies of scale surpassing those of other companies, with the clout in the bargaining room to match. The closest behind Wal-Mart in terms of sales is The Home Depot, though their sales were only 25 percent of those of Wal-Mart. The Kroger Co. and Target Corporation fall just behind The Home Depot. However, despite Wal-Mart’s impressive sales, the profit margins for that genre of mass-merchandiser are under six percent. In luxury stores, where the goal is not to have the lowest price, profit margins can exceed 15 percent.

Future Outlook:

As the economy regains its step helping increase expenditure, the retail industry is experiencing shifts as it prepares to meet the evolving demands of consumers. To achieve higher growth, retailers should focus on emerging markets as the growing middle class and urbanization is the perfect environment to target. As for established markets, the industry needs to focus on going digital and the emergence of e-commerce, online and mobile app shopping is the future for retailers. This gives the consumer the ability to conveniently shop anywhere, anytime that will encourage more purchases, and allow consumers to feel more in “control”. This will cause a radical rethinking of how to provide goods and services in the retail industry as the traditional brick and mortar model will become less important. More merchandise will be moved online by traditional brick-and-mortar establishments as time goes on.

Another key area is getting closer to consumers to meet their changing demand. The future of the success of retailers lies in tailoring products for each consumer as best as possible. This can be done with the help of technological advancements. Such technology includes business analytics and the collection of consumer buying behavior data along with other miscellaneous information that will help retailers target consumers better.

Utilising social media will also be another key aspect for retailers to grow. Social media allows for rapid and mass marketing; through and by the consumer. Consumers can help spread the word more efficiently through social media than other direct marketing methods. In addition, there are a lot of people who follow brands strictly over social media, making it even more imperative for retailers to build and develop their social media presence.

Developed supply chains will be an important factor for retailers to gain a competitive advantage in a crowded industry. With the increasing convenience of being able to shop anywhere at any time, it is essential to efficiently tackle the rising demand. Consumers are increasingly cognisant of service times when purchasing online items so the faster and more reliable shipments are, the higher the chances are of satisfying and retaining a loyal consumer.