Retail Trade - SS1 Commerce Lesson Note

Characteristics and Functions of Retail Trade:

·         Sale of Goods: Retail trade involves the direct sale of goods to end consumers. It is the final step in the supply chain, where products are purchased in bulk from manufacturers or wholesalers and then sold to individual customers.

·         Customer Interaction: Retailers interact directly with customers, providing them with personalized assistance, product information, and a convenient shopping experience. They help customers make purchasing decisions by understanding their needs and preferences.

·         Physical or Online Presence: Retail trade can take place through brick-and-mortar stores, where customers visit in person, or through online platforms, where customers make purchases electronically. Both physical and online retailing provide different experiences and cater to different customer preferences.

·         Assortment of Products: Retailers offer a wide range of products and brands to cater to the diverse needs and preferences of consumers. They curate their product assortment based on market demand, customer preferences, and trends.

·         Pricing and Profit Margins: Retailers determine the prices of the products they sell, taking into account factors like production costs, competition, and consumer demand. They aim to set prices that allow them to generate profit while remaining competitive in the market.

 

Advantages of Retail Trade:

·         Convenience: Retailers bring products closer to consumers, making them readily available in local markets or through online platforms. This convenience saves customers time and effort in searching for and acquiring the goods they need.

·         Personalized Customer Service: Retailers provide personalized assistance and guidance to customers, helping them find the right products and addressing their specific needs. This enhances the overall shopping experience and builds customer loyalty.

·         Employment Opportunities: Retail trade creates a significant number of job opportunities in various roles such as sales associates, cashiers, store managers, and customer service representatives. It contributes to the local economy by providing employment for a diverse range of people.

 

Disadvantages of Retail Trade:

·         Increased Costs: Retailers incur costs related to maintaining physical stores, inventory management, staffing, and marketing. These expenses can increase the overall price of products, making them more expensive compared to buying directly from manufacturers or wholesalers.

·         Competitive Pressure: Retail trade is a highly competitive industry, with numerous retailers vying for customer attention and market share. This competition can lead to price wars, tight profit margins, and challenges in attracting and retaining customers.

·         Limited Control over Supply Chain: Retailers are dependent on manufacturers and wholesalers for a steady supply of goods. Any disruptions in the supply chain, such as delays or product shortages, can impact the availability of products for retailers and their ability to meet customer demand.