There is a term that you may have heard a lot if you are in digital marketing or its related areas: we are talking about retail. With the digital acceleration of brands, this concept has become very common among businesses that turned all their strategies to the online world, but… do you know what is retail or its definition?
You are in the ideal place: we are going to explain in detail this concept that is going strong and that will surely position itself much more over time. Are you ready to learn? Let’s go!
What is retail?
Retail is a term of English origin used to describe the retail and direct sale of products to final customers for their consumption and not for . This type of business aims to sell multiple customers a stock which is massive.
There are companies that appear as a retail sector, this refers to the actors that make retail sales. For example, supermarkets, department stores, etc. Without a doubt, it is a concept that is gaining strength in the digital transformation of brands, not only in Mexico, but in the world.
Consumers are making more and more purchases online. According to a study carried out by the Mexican Association of Online Sales (AMVO), the online sales turnover of the retail channel rose 27% in 2021 compared to the previous year with a total of $401.3 billion pesos. This is the power of the digital revolution that is taking place!
When talking about retail, it is also necessary to refer to retailers. These are the traders who purchase products in large volumes and sell small quantities to the end customer. That is to say, they are the ones in charge of storing and also exposing the variety of products to consumers.
Retailers maintain a close relationship with the suppliers that supply them or operate with them within their distribution channels. The objective is to guarantee that the marketed product reaches its final destination.
Online sales turnover in Mexico in 2021 grew 27% and collected a total of $401.3 billion pesos.
The distribution chain in a retail is made up of four actors to ensure that this process is carried out successfully, they are:
- Manufacturer: produces the goods with the help of machines, raw materials and skilled labor.
- Wholesaler – Buys all finished products and sells them to retailers in bulk.
- Retailer: exposes and markets products in small quantities to a final consumer.
- Consumer: buy products for their use and satisfaction of needs.
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Now that you know the definition of retail and have more context about this type of business, let’s continue delving into its main features!
Characteristics of the retail sector
The fundamental objective of this process is the sale to the final consumer. However, there are other features that are important to note:
- The repetition of sales is a fundamental point because products of small or medium volume are commercialized. With this, consumers are more likely to return to digital platforms to buy more.
- Marketing campaigns will always be directed at the end customer. It seeks to attract the attention of these users since, later, they will be the ones who convert and increase the percentage of sales in the brands.
- The purchase of large quantities and retail sales. Many retailers buy in bulk from wholesalers to offer lower prices.
- Well-coordinated logistics will allow the success of the customer purchase cycle and help build customer loyalty. If the home delivery process suffers a mishap, the shopping experience and relationship with the brand is damaged.
- Retailers opt for white brands to guarantee the success of their processes; that is, brands that are offered with the logo of the establishment.
Types of retailers
- Department store
- supermarkets
- discount retailers
- specialty retailers
- digital retailers
In this section, we are going to talk about the types of retailers and their characteristics, since each of them offers a different experience to the consumer.
Department store
Also known as department stores, they are all those that sell a wide range of products within the same physical space. They are characterized by handling the management, control and centralization of their sales.
They have a strategic location of the company that guarantees the success of the purchase cycle by the consumer. They attract and persuade their audience through offers, promotions and constant.
supermarkets
These spaces are great examples of retail because they handle a lot of volume and the end customer focuses on the products that meet their needs.
Let’s look at some data on this. In August 2022, total sales for the month amounted to $897.2 billion pesos, according to data from the National Association of Self-Service and Department Stores (ANTAD). This represents a growth of 12.9% growth with respect to the data of July of the same year.
These spaces stand out because they are easy to pay and a wide variety of items to select from. In addition, the customer feels comfortable walking through the spaces and has time to buy. Finally, they can be operated by cooperatives or department stores.
discount retailers
They are warehouse-type spaces that sell products that are packaged in large quantities at very affordable prices. The latter is the main attraction of them, since discontinued and liquidation products are obtained.
specialty retailers
Specific categories and branded products are marketed in these places.
Companies that offer sportswear or underwear are the clearest examples of this type of retail. They sell products that are associated only with their brand.
digital retailers
These businesses sell products through the and deliver orders directly to the consumer’s home.
Prices are usually at a value below the traditional sale. Of course, they have stores, suppliers and manufacturers to develop a successful sales cycle for the consumer.
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Top 3 of the largest retail companies in the world
Walmart
It remains, for years, the most famous retailer. It is on the Forbes Global 2000 list as number one. It is a company that has also been positioning itself in electronic commerce since 2017 and bought important brands for its consolidation in the sector.
Walmart Stores, Inc. reports annual revenue of more than $555 billion, according to the firm. It operates in 27 countries around the world and has more than 11,000 stores.
amazon
Another example of a retail company is the largest online retailer. Sales figures maintain continuous growth and much more in this time of pandemic.
62% of purchases are made by users who live outside the United States. This company achieved a market capitalization of 314 million dollars in 2015.
Alibaba
It is located in the number four position in the list of retail companies with the greatest growth in the world. The Jack Ma-owned company is positioned with business lines such as cloud computing, logistics and many other sectors.
rise of online commerce
Although the retail concept encompasses online and offline sales, the future is marked for the digital channel to become much stronger. Omnichannel is part of the strategies that all companies with a presence on online platforms are developing.
The pandemic brought with it the hyper-acceleration of this channel to meet the high demand and demands of today’s consumer.
In this sense, retailers are focused on making technological investments in their companies to improve all phases of the sales cycle.
Now it’s not just about selling but about delivering a product to the customer’s home that meets their needs and meets the delivery expectations they want. The future is now!
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In conclusion
The retail companies are those that focus their products and efforts on satisfying the needs of consumers; either through sales at physical points of sale, digital or (increasingly common) through both channels.
If you have a business, surely you can see it reaching more people in a couple of years; one of the steps to achieve this is through an online store. for you to create your store and start selling online.
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