Retail marketing refers to the process by which retailers avail their goods and services to consumers.
Through retail marketing agencies, retailers are able to market their services to their consumers. In order to understand the retail process, it is Important to understand the different terms used in retail marketing:
Definitions of terms used in retail marketing
Retail – Retail is someone or a business that sells goods to consumers in small, need-based quantities.
Consumer – An end user who purchases goods and products for their personal needs. Usually, they are last in the shopping chain.
Goods – Refers to a tangible product, item or merchandise on sale.
Shopping – Refers to the process by which goods from the manufacturer reach the consumer. This is illustrated below:
Manufacturer ➔ wholesaler ➔ retail seller ➔ consumer (end user)
Usually, before any goods reach the consumer, they go through the shopping process. Wholesalers are different from retailers since they sell their goods in bulk intended for reselling. Retailers on the other hand, sell the products in small quantities to fit individual consumer needs. To be able to reach more consumers, retailers work with retail marketing agencies to drive more traffic to their stores. More traffic means more sales which is the ultimate goal for every retailer. A Retail marketing agency should be able to craft the right marketing strategy depending on your business, retail outlet and goods being sold.
Stages of retail marketing
Retail marketing started off in the 17th century with retailers engaging in very basic trade. Currently, the retail industry has evolved to more systematic retail strategies. This is how it started to what it is now:
- Barter trade stage – This is the earliest form of trade known to human beings. It involved a simple exchange of goods for goods. Barter trade was widely practiced and the main goods exchanged included food supplies and perishables, animal products and artifacts. Though it was working at that time, there was a challenge in storage and consistency in the market. Traders depended on hawking their goods door to door and the seasonal markets. Towards the end of the 17th century, the trade system began to take form and organized trading practices became more appealing.
- Social development stage – The 18th century brought a positive shift in trading practices. The development of the rail system and telegram made it possible for traders to conduct their business far and wide. It became possible to place orders, send and receive goods from other parts of the world. America and Europe were the pioneers of a more systemized trade and soon after small retail stores began to open up.
- Global industrialization Stage – The industrial revolution of the 19th century saw the mass production of various goods and merchandise to the consumers. The rail network made it possible for these goods to be delivered to various world destinations sparking a shift in the shopping process. Small towns developed around docking areas and railway stations to necessitate the mass distribution of goods that were coming in. At this point, brokers, wholesalers and retailers emerged guiding the process of goods distribution and acquisition.
- Self-service stores stage – Self-service stores such as supermarkets and convenience stores have been on the rise since the 1930s.This retail stage allowed consumers to choose goods from a wide variety of brands. Not only was this a remarkable stage in retailing but also industrialization as more and more brands emerged. It also encouraged positive competition between manufacturers each one trying to outshine their competitor. All this was towards the consumer’s advantage as they could select products with added value.
- Specialty store stage – Towards the late 19th century and early 2000s, improved transport system, communication, the introduction of banks, insurance and other service industries led to the construction of malls, warehouses and shopping cities to meet the increasing consumer demand. Increased population around major cities of the world, increased awareness and competitive business strategies led to a more systemized trading system, convenient and efficient for all. Consumers became aware of their shopping preference in terms of location and specialty. For instance, specialty stores are most common in fashion conscious cities. You can also find stores selling only particular items on electronics, furniture among others.
- Internet stage – The internet brought down territorial boundaries that existed in retailing business. Currently, for success in the retail business, an online presence is a must. Consumers are able to source for their goods online, find a retail shop near them for physical visit or order online and have their goods delivered to their doorstep. Retailers are using the internet to market their goods to consumers both locally and internationally.
Retail marketing is an evolving sector influenced by the advancement of technology, telecommunications and consumer mindset. Understanding retail marketing takes you back to the ancient forms of trade, compared with current trends in retail marketing. Following through the advancement every century, we can only hope for a better and systemized retail marketing in the following years.