What is Retail and Retail Functions – Retail is a process of selling products (goods and services) directly to end consumers in relatively small quantities and used for personal consumption. Whereas the person or business entity that conducts this retail business is usually referred to as a retail trader or retailer.
It can also be said that each business entity that sells goods to end-users and is not for business use or not for resale is basically involved in the retail process.
The word “retail” basically comes from the French language, “Ritelier” which means to cut or to break something. With the meaning of the word, we can see that Retail or Retail in the business sense is an attempt to break down the number of products produced or distributed by producers into smaller amounts so that they can be consumed by consumers according to their needs.
Retail is a very important part of the distribution channel for a product in reaching consumers or customers. In a distribution channel, Retailers or Retailers are the last links in the distribution of goods and services.
Retailers generally sell their merchandise at a price higher than the price obtained from producers or large traders in order to get a profit. Examples of retail traders in modern days that we often encounter are Minimarkets, Supermarkets, Grocery Stores and buildings and clothing shops, and so on.
Understanding Retail (Retail) according to Experts
To be clearer about this Retail or Retail, here below are some definitions or definitions of Retail or Retail according to the experts.
- Understanding Retail (Retail) according to Hendri Ma’ruf (2005: 71), retail is a business activity selling goods or services to individuals for the needs of themselves, families or households. While retailers are entrepreneurs who sell goods or services retail to the public as consumers, individual retailers or small retailers have a number of outlets ranging from one to more.
- Understanding Retail (Retail) according to Gilbert (2003: 6) , retail is all business ventures that directly direct the ability of marketing to satisfy end consumers based on the organization of sales of goods and services as the core of distribution.
- Understanding Retail (Retail) according to Kotler (2007: 592) , retail business (retailing) is all activities that involve selling goods and services directly to end consumers for personal use not for business.
Retail Functions (Retail)
Retail has a very important role in marketing distribution channels. The functions of this Retail or Retail business include:
1. Product Providers and Sorting
Retailers or Retailers must store various goods and services that may be needed by consumers. Retailers will collect goods from various manufacturers or intermediaries then sorting or classifying goods to meet the specific needs of their customers or consumers.
Retailers have a variety of customers who have different requirements. Retailers collect and package goods from different sources, then collect them again and store them on the shelves so that they are ready and easy to be identified by the retailers themselves and their customers. Retailers will display these products to customers who visit so that transactions can occur.
2. Breaking into smaller numbers (Breaking the Bulk)
The retailer buys large quantities from producers or wholesalers and then solves them or cuts them into small quantities or small packages to suit the needs of each individual customer. Large packages or packages with large quantities will be broken down into smaller units so that it is convenient for customers to buy and carry.
3. Inventory Storage
Retailers also have the function of holding the stock for producers and consumers. Retailers or retailers maintain an inventory that enables instant availability of products for consumers. This will help for keeping the prices stable and allow producers to manage production. Consumers also only need to save as little as possible or even do not need to keep stock of products in their homes because retailers have stored sufficient inventory for the needs of consumers.
4. Increase Value Added on Products
Retailers or Retails provide services that make consumers comfortable to buy and use products. Providing product guarantees, after-sales services, and handling consumer complaints are some of the services that provide added value to a product. Retailers also offer credit and lease-buying facilities to customers / consumers to enable them to buy now and pay later. There are also Retailers who provide product delivery and installation services at the customer’s home or office. Salespeople are also employed by retailers to answer questions and provide additional information about the products displayed. The screen itself allows consumers to see and test the product before the sale and purchase transaction.
5. Communication Channels
Retail basically involves a direct relationship with the end customer that forms a very important communication channel for companies and producers. Manufacturers usually try to communicate the benefits of the product and its offerings and price discounts through retailers. Retailers also act as mediators between producers and customers and communicate the feedback given by customers to producers or wholesalers.
Retail Stores are the last channel where customers make the decision to buy or not. Therefore, the Retail Shop can be used as an important marketing channel for a brand. Proper placement, banners, advertisements, offers and other strategies can be carried out by producers to increase their sales in these retail stores.