Retail
Selling goods and services directly to consumers for profit.
Retail is the sale of goods and services to consumers, as opposed to wholesaling which serves business or institutional customers. Retailers purchase goods in large quantities from manufacturers or wholesalers and sell smaller quantities to consumers for profit, acting as the final link in the supply chain from producers to consumers. Retail markets and shops have a long history, dating back to antiquity, with early retailers including itinerant peddlers, and have evolved from simple booths to modern shopping malls.
- field
- Commerce
- known_for
- Final link in the supply chain, selling goods and services to consumers
- key_activities
- Purchasing, supply management, pricing, store design, multichannel retailing
Lore & Background
The word 'retail' comes from the Old French verb 'retaillier,' meaning 'to shape by cutting' (c. Day-to-day decisions are often described using the retail marketing mix, commonly summarized as six 'Ps': product, place, promotion, price, personnel, and presentation.
Reader's Guide
The retail sector is economically significant and employs large workforces. Most modern retailers make strategic decisions including the type of store, market to be served, product assortment, customer service, supporting services, and overall market positioning. Retailers have expanded omnichannel capabilities, such as buy online and pick up in store, and some firms have tested automation, such as cashierless store formats. The distinction between strategic and managerial decision-making is commonly used, with strategic planning focusing on improving competitive position and managerial decision-making on implementing specific targets. Retail analysis typically includes market, customer, internal, and competition analysis, as well as review of product mix and distribution channels. The retail strategy is normally devised or reviewed every three to five years by the chief executive officer, and profit margins depend largely on the ability to achieve market-competitive transaction costs.
Did You Know?
- Some of the earliest retailers were itinerant peddlers.
- Retail service providers include retail banking, tourism, insurance, private healthcare, and private education.
Frequently Asked Questions
What is Retail?
Retail refers to the commercial practice of selling goods and services directly to end consumers for profit. It sits at the very end of the supply chain, bridging the gap between producers and the people who actually use the products.
How does Retail differ from Wholesaling?
While both involve buying and reselling goods, retail targets individual consumers, whereas wholesaling serves other businesses or institutional buyers. Retailers typically purchase in bulk from manufacturers or wholesalers and then break those quantities down into smaller, consumer-friendly units.
What are Retail's key activities?
Core retail operations include purchasing, supply management, pricing strategy, store design, and multichannel retailing. Together these functions ensure that the right products reach the right customers at the right price and in the right setting.
How far back does Retail's history go?
Retail traces its roots to antiquity, beginning with itinerant peddlers who traveled from town to town. Over centuries, the format evolved from simple market booths into the sprawling shopping malls and online storefronts we see today.
Why is Retail important to the broader economy?
As the final link connecting producers to consumers, retail is what actually delivers value to everyday people. Without it, manufacturers would have no direct path to the end-user, and the profit cycle that sustains the wider supply chain would collapse.
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