Retailer Meaning Characteristics and Functions21st August 2022 0 By indiafreenotes
The word ‘Retailer’ had been derived from the French word ‘Re-tailer’ which means ‘to-cut again’. Obviously then, retailing means to cut in small portions from large lumps of goods. A retailer is last middlemen in the chain of distribution of goods to consumers. He is a link between the wholesalers and the consumer.
The American Marketing Association defines retailing as “the activities involved in selling directly to the ultimate consumer for personal and non-business use. It embraces direct-to-customer sales activities of the producer, whether through his own stores or by house-to-house canvassing or by mail-order business. The retailer is an intermediary in the marketing channels and is a specialist who maintains contact with the consumer and the producer and is an important connecting link in the mechanism of marketing.
Characteristics of a Retailer
- In the entire distribution chain, a retailer is considered to be the final link, who deals directly with the customer.
- A retailer essentially maintains a variety of merchandise.
- A retailer purchases in bulk from the wholesalers and sells the products to the customers in small quantities.
- The aim of a retailer is to achieve maximum satisfaction by exceeding their expectations and delivering exceptional services.
Functions of Retailing:
- Assembling of goods from various wholesalers.
- The providing information concerning the nature and use of goods to the wholesalers and producers. It also informs as about the market trend.
- The physical movement and storage of goods for the supply to the final consumers to meet their needs and requirements.
- The standardisation, grading and final processing of goods which have been left in graded or unstandardised by wholesalers.
- The assumption of risk concerning the price, nature and extent of demand of goods as long as they remain unsold.
- The provision of ready availability of goods of various qualities and of various manufacturers.
- The financing of inventory and the extension of credit to consumers for a short period.
Pre-Requisites of Retail Trade:
The success of retail trade is based on a proper combination of the following factors:
The ultimate success of a retailer depends on the location of his shop. Proper selection of location is important for a retailer to establish his business.
A proper pricing policy can give better results for a retailer if he can combine low prices with good quality to attract consumers.
(iii) Sales Promotion:
A retailer must arrange for proper sales promotion campaigns in order to familiarise the customers of that area with his products.
(iv) Prudent Buying Principles:
Every retailer ought to be a shrewd purchaser; only then he can give his best to his customers. Careful buying earns rich dividends in retail trade.
(v) Knowledge of Merchandise:
Modern business is so complex and the variety and quality of goods being so diverse, a retailer must have adequate and latest knowledge of the wares he sells. It would not only enable him to answer customer queries satisfactorily but also to handle the complications of his business. Thus adequate knowledge of merchandise is another pre-requisite feature of retail trade.
A retailer should concentrate on his services. Courteous and prompt service on his part will help him in attracting more and more customers and thereby flourish in his business. Most retailers go in for after sale service also, where they cater to the needs of the customers after the latter has purchased a commodity from them. So efficient service should be the motto of every retailer.
(vii) Efficient Management:
Better planning, organisation and control by a retailer can offer efficient retail operations. A retailer should have a proper and adequate work-force to assist him in his business. He should always keep stocks ready for customers and even offer specialised comments on the products he deals in. If a retailer plans his inventories and works in advance, there is no doubt that he will achieve his targets and also attract more customers.
(viii) Display of Goods:
Since a retailer deals in a verity of products, he must display his goods in a proper and orderly manner. This will enable him to get what is required by the customer quickly and also help in attracting customers. The retailer must go in for tastefully decorated interiors and also have proper and attractive window-dressing and display.
The goods must be neatly and orderly stocked and the pattern of window display should be frequently changed for the better, so as to attract the customers’ eye. A retailer must not forget that a well laid out window display will help him to entice and attract customers from his rivals and competitors. Hence, proper care and attention ought to be given for display of goods out as well as in the retailer’s shop or showroom.
Functions of Retailers:
A retailer deals in a variety of merchandise and so he buys collects large number of goods his stocks from a variety of wholesalers. He selects the best from each store them and bears wholesaler and also pays the most economical price. He brings all the goods marketing risks, under one roof and then displays them in shop. Thus, he performs the twin functions of buying and assembling of goods.
After assembling the goods, the retailer stores them in his godown so that they are held as reserve stocks for the future. Storage of goods in ready stock is also necessary.
The ultimate aim of every retailer is to sell the goods he buys. So he employs efficient methods of selling to dispose off his products at a faster rate so that he can increase his turnover in a period of time.
The retailer bears the risk of physical damage of goods and also that of price fluctuations. Moreover, risk of fire, theft, deterioration and spoilage of goods has also to be borne by him. Changes in fashions, tastes and demand of his customers also have an adverse effect on his sales; nevertheless a retailer does not lose heart. He bears all these trade risks which come in his way during the normal course of business.
A retailer packs his goods in small packets and containers for his customers. Occasionally he may be required to grade the goods also.
Often retailers grant credit to customers and also bear the risk of bad debts, which go along with credit sales.
(vii) Supply Information:
Retailers supply valuable market information to both wholesalers and customers.
Retailers display goods and spend on advertisement also.