Retail Industry Sectors: Types of Retail

A marketplace is a location where goods and services are exchanged. The traditional market square is a city square where traders set up stalls and buyers browse the merchandise. Now retail goods are generally sold in a number of different establishments. Convenience Stores, specialty stores, department stores, supermarkets & hypermarkets, discount stores, multichannel stores are some models used by the retail industry to provide goods to end customers.

Retail – Industry Sectors:

Retail goods are generally sold in a number of different establishments. Retailers can be classified by a retail store strategy mix, which is an integrated combination of hours, location, assortment, service, advertising, and prices, etc. Retail establishments typically classified into the following sectors:

Convenience Stores
Grocery Stores
Specialty retailers
Clothing Stores
Auto Retailers
Home furnishing retailers
Drug Stores
Department Stores
Super Markets and Hyper Markets
Discount Stores
Multichannel Stores
Direct Sales Catalog and mail order companies
Some e-commerce businesses

Given below are the snapshot, definition, and major activities of various sub-sectors of the retail industry:

1. Convenience Stores:

Small stores that sell a variety of products, such as newspapers, magazines, candy, soft drinks, tobacco products, and lottery tickets. Convenience Store is generally a well situated, food-oriented store with a long operating house and a limited number of items. These stores are usually located in urban neighborhoods or along busy roads. Convenience stores are often open longer hours than other types of retail establishments, making them convenient for customers. However, prices are often higher than in other types of stores. Consumers use a convenience store; to fill in items such as bread, milk, eggs, and candy, etc.

2. Specialty Stores:

Specialty stores are the retail establishments that specialize in the selling of a single type or specific range of merchandise and related items. These establishments typically concentrate their efforts on selling a single type or very limited range of merchandise. They concentrate on the sale of a single line of products or services, such as Audio equipment, Jewelry, Beauty and Health Care, Clothing, Musical Instruments, Sewing Shops, and party supply stores. A typical specialty store gives attention to a particular category and provides a high level of service to the customers. Even the branded stores also come under this format. Consumers are not confronted with racks of unrelated merchandise.

Example: Music World for audio needs, Tanishq for jewelry and McDonalds, Pizza Hut, and Nirula's for food services.

3. Department Stores:

Department stores are large retail establishments that are made up of a number of sections, or departments. A specific group of products is available in each department, each of which specializes in selling a particular grouping of products. For example, under this compartmentalized arrangement, consumers go to one area of the store to purchase tableware and another area to acquire bedding. These typically are very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such stores carries a variety of categories and has a broad assortment at an average price. A department store usually sells a general line of apparel for the family, household linens, home furnishings, and appliances. They offer considerable customer service.

Example: Large format apparel department stores include Pantaloon, Ebony, Pyramid, Shoppers Stop, and Westside.

4. Supermarkets & Hypermarkets:

Supermarkets and hypermarkets are retail establishments that were primarily involved with selling food. Many supermarkets carry other household products as well.

Supermarkets are very similar to grocery stores, but they generally are larger and carry a wider selection of products. The supermarkets can be anywhere between 20,000 and 40,000 square feet (3,700 m2). A supermarket typically carries small house hold appliances, some apparel items, bakery, film developing, jams, pickles, books, audio/video CDs, etc.

A hypermarket is a large retail facility, or superstore, that carries a very wide variety of products under one roof, including groceries and a variety of non-food items. This is a self-service store consisting mainly of grocery and limited products on non-food items. Hyper Markets is a special kind of combination store that integrates an economy supermarket with a discount department store. A hypermarket generally has an ambiance which attracts the family as a whole.

These retail establishments, which were primarily involved in providing food to consumers, have increasingly ventured into other product areas in recent years. They account for the vast majority of total food-store sales in America.

Example: SPAR supermarket, In India, the Government-run Super bazaar, and Kendriya Bhandar in Delhi are good examples of a supermarket. Similarly in Mumbai, we have Apna Bazar and Sahakari Bhandar. Pantaloons Retail India Ltd. (PRIL) through its hypermarket "Big Bazar”.

5. Discount Stores:

Discount stores are stores that typically sell a broad range of products at lower prices than other retail establishments. However, they generally also offer lower levels of service than higher-priced retailers. These stores tend to offer a wide array of products and services, but they compete mainly on price. They offer an extensive assortment of merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands. These retail outlets offer consumers a trade-off: lower prices (typically on a broad range of products) in exchange for lower levels of service. Indeed, many discount stores operate under a basic ‘‘self-service’’ philosophy.

6. Multichannel Stores:

These are retail establishments that sell products to consumers through a variety of channels, including catalogs, mail order, telemarketing, the Internet, and vending machines. They are also known as mail-order businesses and other non-store retailing establishments. The customer can shop and order through the internet or mail or other mediums and the merchandise is dropped at the customer's doorstep.