Why is retail sales important to business

In modern times, retailing is categorized by large multiple chains and not by small scale independent retail stores. The increasing importance and formalization of retailing have made it a powerful part of the supply chain. Moreover, the comparison of retailers is being made with manufacturers which shows the increasing dominance of retailers in the distribution channel. In addition to this, the annual turnover of a few retailers such as Wal-Mart is much more than the annual turnover of companies.

All these points show that retail is the most dominating part of the whole supply chain. Retailing has developed from a number of interrelated disciplines such as economics , geography, management, economics, and marketing.

Economics is useful to manage the finances of a store. Management plays an important role in managing your staff and inventory and similarly, right marketing helps you to penetrate in the market. At the present time, the retail world employs maximum people. As per an estimation, one in nine of the workforces is employed in the retail industry.

Moreover, two third of the total workforce in the retail world is women and more than half employees in retailing are part-time employees, which provides flexibility to workers to adapt to the particular needs of any employer.

In the past, the salaries paid to employees were very low. Therefore, people worked on a temporary basis in the retail sector. But as the work conditions and salaries paid in the retail sector are improving more and more people are considering retail jobs as a permanent career.

Because of the importance of retailing more and more emphasis is being paid to the area of retailing. Retailing is a separate subject of studies like management and marketing. In addition to this, academic journals concentrating on retailing are being published worldwide. As a freelance writer and consultant, Ken focuses on stocks , trading basics, investment strategy, and health care. Learn about our editorial policies.

Reviewed by Somer G. Article Reviewed November 27, Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years. Her expertise covers a wide range of accounting, corporate finance, taxes, lending, and personal finance areas.

Learn about our Financial Review Board. Fact checked by Emily Ernsberger. Article Fact Checked June 25, Emily Ernsberger is a fact-checker and award-winning former newspaper reporter with experience covering local government and court cases. She also served as an editor for a weekly print publication. Retailers breakbulk and serve the products in quantities and sizes as desired by the customer. For example, shampoo is available in small sachets. The retailer helps consumers by providing appropriate products, services, and advice in the packing and quantities desired by them.

A vibrant retail sector benefits the consumers by providing a range of products and services efficiently. Retailing can be done in either fixed locations or online.

Retailing includes subordinated services, such as delivery. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Retailing also helps to increase living standards and enable consumers to possess various goods, services, and utilities.

Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers or directly through a wholesaler, and then sells smaller quantities to the consumer for a profit. Retailers participate in the sorting process by collecting an assortment of goods and services from a wide variety of suppliers and offering them for sale.

The width and depth of assortment depend upon the individual retailer's strategy. Retailers provide a vital link between producers and ultimate consumers. When consumers purchase goods, retailers must order more goods to replenish their stock. In turn, factories must manufacture the goods for retailers. The factories then purchase more raw materials to use to manufacture more goods.

It is important that every part of the supply chain is efficient, nimble, and seamless to allow retailers to deliver product to the customers in the most efficient and profitable way to achieve success and meet its overall goals. We can better understand how supply chain issues can affect a company by looking at Chipotle. In the company stopped serving pork due to the strict requirements they had regarding how animals were raised.

It took them some time to find another supplier that met its shortage, and therefore had a shortage for approximately 10 months. They are now using a British supplier. As the company continues to expand think about how this will affect the business and how they can work through these issues. Suppliers can typically be domestic or international.

However, one thing to keep in mind is that if you are dealing with international suppliers you will often have longer lead times. Lead times can vary but it is in the best interest of the supplier to deliver the product as quickly and efficiently as possible or else risk losing business to another supplier. Common types of suppliers include manufacturers, wholesalers, and vendors. The supplier has the raw materials made into products at the factory. Retailers can work with numerous factories all over the world in meeting demands.

A great example of this is Adidas Group. They work with about factories in approximately 55 countries. Most retailers are transparent regarding the factories they use for production of product to improve and promote compliance and safe working conditions. This is where the finished product will go after leaving the factory. A great example of a distribution network is Wal-Mart.

Each distribution center for Wal-Mart is more then 1 million square feet and has over employees. Remember we talked about the global reach of retail earlier! Think about how an expansive supply chain creates job opportunities! They allow retailers to save money and time. If you have multiple stores on the east and west coast a regional distribution center would allow you to quickly transport products to customers and process returns.

Regional Distribution Centers are also smaller and less costly to build. One disadvantage of a regional distribution center is that you must replicate processes, procedures, equipment, infrastructure, and labor which can be a challenge for any retailer. Managing inventory in multiple locations can also be costly for the retailer. Industry Week provides a list of the top 25 supply chains every year.

You can find the list here as well as previous years. First quarter clothing sales were down 6. If they had ordered additional inventory to meet consumer demand, they likely would not have lost out on those sales. For any retailer that has online operations, mobile engagement must be a significant part of their business.

Consumers use their mobile phones for everything from shopping for different prices for products and even shipping costs. So, how can retailers push the envelope here to engage the consumer even more? An example of a company capitalizing on this trend is Walgreens. Their mobile app includes services such as prescription transfers and Quick Print.

Technology is continuously changing the way consumers shop. There are five stages consumers go through whenever purchasing a product.