Retail and its various channels

By definition: Retail is an activity of selling consumer goods / services to end customer with a slightly higher margin than the production cost to earn profit. Retail industry is present in almost all the sectors under the Sun. May it be a pin you are buying or a household appliance, retail has its presence there. In early days, retail stores and shops were the one channel of retail business. However, things have changed in the past one decade where in a number of channels have come up for retail business which are very cost effective and were as profitable in their domain.

Let us first list down the number of channels in retail industry:

1. General stores
2. Convenience store
3. Malls
4. Supermarket
5. Online shopping websites
6. Specialty stores
7. Brand outlets
8. Door to door sales
9. Vending Machines

1. General stores: These are small size stores with limited inventory consisting stocks of daily necessity products. These stores are normally located rurally and dominate rural retail market.

2. Convenience Stores: These are special stores which work 24x7 and are normally accessed during emergency needs. These stores normally sell products for price slightly more than the average price but guarantees speedy transaction and no time barrier for accessibility.

3. Malls: Malls can be defined as a cluster of Brand outlets, Supermarkets, Boutique and food joints. A mall is a one stop destination where people can shop all the essentials and luxury items. It is a place where people can primarily shop and can enjoy related activities like food joints, gaming zone, movies etc.

4. Supermarket: These are huge stores having all the household essentials under one roof. You can get all that you require in a supermarket at the best possible price. Here there are sections of various items and the respective brands which save a lot of time. Supermarkets are basically for FMCG (Fast moving consumer goods) products. One will not find Automobiles and luxury brands sold in a Supermarket.

5. Online shopping websites: Due to easy and cheap availability of high speed Internet Online shopping websites have emerged and become very successful retail channel. This does not require any outlets, all the items are displayed on their website and customer can buy those online. This channel requires a really good website which is user friendly and attractive and a strong and dedicated logistic chain.

6.  Specialty stores: These are special stores selling products or goods related to one particular activity which can be adventure activities, sports, Kitchen. For example, Planet Sports is a specialty store for various sports related products. Stores selling only musical instruments can also be called as a specialty store. Here a customer can find all the related product of one particular activity with options of various brands so that comparing and buying becomes a cakewalk.

7. Brand Outlets: As the name suggests these are outlets which sell all the products but only for one brand. For example Levi’s store, they not only sell Levi’s jeans but shoes, wallets, belts etc. all belonging to Levi’s brand.

8. Door to door sales: This is a very old method of retail channel which is slowing moving out from the retail domain. There are very few companies who follow this retail channel. Eureka Forbes is one who still uses this mode for their retail business. The reason this channel is becoming extinct because of e-commerce and security protocols followed in the newly constructed residential buildings.

9. Vending Machines: This is another retail channel which is normally used for selling mostly confectionaries.  This channel has not yet set its root in India. However, is extensively used in the developed countries as labor is too expensive in these countries.

Thus, it can be seen that Retail is one of the major checkpoint in the Product life cycle. Finished goods reach the final consumer with the help of various retail channels discussed above as it is an interface between Producer and the consumer.

About Author:

Amol Bhembre is a consultant in Systems Plus Pvt. Ltd. Within Systems Plus, he actively contributes to the areas of Technology and Information Security. He can be contacted at: amol.b@spluspl.com