Different Kinds of Retailing

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Retail stores are just one part of the retail industry.
Retail stores are just one part of the retail industry. (Image: Jupiterimages/Photos.com/Getty Images)

Retailers typically buy large volumes of products at wholesale prices and sell smaller quantities or single items to customers at a higher cost per item. Although this basic objective applies to all retailing, different kinds of retailers accomplish it in diverse ways. Companies can sell the same product through catalogs, stores, websites and flea market tables, among other venues. Each type of retailing offers a different set of advantages to the customer.

Stores

Long before other kinds of retailing became common, physical stores existed in many different forms. Discount and department stores sell wide varieties of products, while other retailers like clothing shops and bookstores primarily offer one type of item. Some large stores in cities have more than 100 departments, according to the Encarta Encyclopedia. For customers, the advantages of store-based retailing include the ability to closely inspect products and easily return them if necessary.

Direct

Another major form of retailing involves selling items by directly delivering or mailing them to customers. Companies may receive orders for such products through the Internet, by telephone or via postal mail. Some retailers market a website or telephone number through TV, newspaper or radio ads. This type of retailing decreases costs because the seller doesn't have to operate stores. It also appeals to customers by eliminating the need to travel. Some companies sold products to farmers by mail order in the late 1800s, according to Britannica Ready Reference, but the practice became more widespread in the 1960s.

Automated

Vending devices and other automatic retailing systems hold increasing importance. Vending machines sell everything from bags of pretzels, cans of juice and laundry detergent to newspapers and movie rentals. The first vending machine in history dispensed holy water in exchange for coins, according to the Encarta Encyclopedia. They eventually moved on to items like tobacco and chewing gum. Automatic retailing eliminates the cost of operating a store and greatly extends business hours, but vending machines can't provide the selection or customer service of retail stores.

Temporary

A significant but less widespread type of retailing uses non-permanent structures in temporary locations. For example, a tent, trailer, table or even the trunk of a car can be used to display products in a flea market or on the side of a road. Temporary retailing offers some of the advantages of selling products in stores, but without as many startup expenses or maintenance costs. Customers do need to be alert with respect to quality, since post-sale service won't be available.

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References

  • "Encarta Encyclopedia Standard"; Vending Machine; Microsoft; 2004
  • "Encarta Encyclopedia Standard"; Department Stores; Microsoft; 2004
  • "Britannica Ready Reference"; Direct-Mail Marketing; Encyclopaedia Britannica, Inc; 2002
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