Types of Retailers:
today can shop for goods from either retail stores (traditional format or
modern format) or online stores. The store-based retailers are further
classified into food-oriented and general merchandise retailers. In India most of
food-oriented retailers are convenience stores, supermarkets, hypermarkets, box
(limited-line) stores and warehouse stores. These formats as defined by Sinha
& Uniyal (2012) are discussed in this section.
Convenience Stores – A convenience store is a neighbourhood
store. Convenience stores are often referred to as mom-and-pop stores & kirana
stores. In India, they are generally over-the-counter (OTC) serviced outlets. Convenience
stores face most competition from supermarkets that have started providing
longer hours and better stocks of non-food items.
Supermarkets – A supermarket is a self-service food
store offering wet and dry groceries and with a limited range of non-food
items, such as health and beauty aids and general merchandise. They carry 5,000
to 10,000 SKUs.
Hypermarkets – Hypermarkets are combination stores that
unite supermarket and general merchandise sales in one store, with the latter
typically accounting for 25-40 percent
of the total sales. Consumers choose them for one-stop shopping and do not mind
travelling to visit these stores. Hypermarkets achieve operational efficiencies
and cost savings through their large-scale operations. Impulse sales are high
in such stores, even when the visit is planned.
(limited-line) Stores –
The box (limited–line) store is a food-based discounter that focuses on a small
selection of items and few additional services. The merchandise consists of few
or no refrigerated items. Items are displayed in cut cases. Customers carry the
merchandise in their own bags. Box stores depend on low-priced private label
brands. They are very similar to convenience stores, except in terms of
merchandise, price and service.
Stores – A
warehouse store or club is a retailer that offers food and general merchandise
with limited services and at low prices, mainly to other retailers, although
the final consumers can also buy directly from these stores. These stores
appeal to price-conscious consumers who do not mind buying in large quantities
and stocking them at home. Warehouse stores are membership-based retail outlets.
Such stores are large in size and are
generally located in low-rent areas.
Stores – A
department store is known for its large assortment and service. The goods and
services are organised into separate departments, with each department looking
after its own operations. These stores cater to customers who are not
price-conscious and are ready to pay for the service. Ambience plays a very
important role in such stores. These stores offer a full range of products and
services. They offer branded products as well as store
brands that are known for quality. They
have well-planned merchandise return policies and run loyalty programmes. These
stores are the anchors in a shopping centre or mall.
Stores – A
speciality store deals in a specific product or service. Speciality stores also
provide a high level of service to their customers. These stores carry
medicine, books, photography, toys, jewellery, hardware and home improvement
products. Category killers and do-it-yourself (DIY) stores belong to this
A Category killer is a specialised discount store. It
attracts customers by offering a particular product at the lowest price and the
largest assortment. Category killers are known to kill brands by making price
the most important buying consideration. In the process, they commoditise the
category. Although they are generally
large in size, some category killers are choosing to downsize their format to
make it fit small towns, though to a mixed result.
Do-it-yourself stores are a popular format, but are
yet to find success in many parts of the world. These stores are category
specialists who offer equipment and material mainly to contractors to make home
improvements. They look like warehouse stores. Sales people are available to
assist customers in selecting merchandise through demonstrations and workshops.
Individual customers also buy from such stores.
Full-line Discount Stores – A full-line discount store is known for
an assortment at a
price that is discounted up to 50 percent of the prices
charged by department
stores. It targets the mass market that looks forward to
the best bargain. It is
likely to carry the range of merchandise similar to a
department store. It
reduces its costs through a very low level of service,
private brands and
Spartan fixtures and ambience. Competition is forcing
these stores to improve
the experience and service to the customers without compromising on the price.
Off-price Stores – Off-price retailers sell branded
merchandise and designer labels at a low price. They generally offer a range of
out-of-season designs, seconds and order rejects. The buying is totally
opportunistic, though many of them have evolved buying strategies that establish
long-term relationships with suppliers. Three special types of off-price
retailers are factory outlets, closeouts and single-price retail stores.
Off-price retailers are affected most by
discount stores and better planning by
Variety Stores – A variety store handles a wide
assortment of inexpensive and popularly priced goods and services, such as
stationery, gift items, women?s accessories, health and beauty products, toys,
imitation jewellery and greeting cards. They do not carry full product lines.
Transactions are often on cash basis. They face competition mainly from
speciality stores, discount stores, hypermarkets and closeout off-price
retailing is a form
of retailing in which sales are made to consumers without using physical stores.
Examples of non-store retailing are direct
marketing, catalogue stores, vending machines and e-tailing & on-line
stores. Non-store sales are now growing
at a higher rate than sales in retail stores. The high growth rate is primarily
due to the growth of e-tailing. The growth of sales in catalogue stores and
other non-store retailing formats such as television home shopping, direct
selling and vending machines is slower (Sinha & Uniyal 2012). Although many
retail stores are independently owned, an increasing number are part of a
corporate retailing organisation. These organisations achieve economies of
scale, greater purchasing power, wider brand recognition and better-trained
employees than independent stores can usually gain alone. The major types of corporate
retailing are corporate chain
stores, voluntary chains, retailer and
consumer cooperatives, franchises and merchandise conglomerates (Kotler et al