Nowadays, retailing is characterized by many large chains rather than small-scale independent retailers.
FREMONT, CA: Retailing resembles the retail industry's increasing dominance. Retailing provides necessary services and a positive contribution to the economy. The importance of retailing is given below:
1. Retailing conditions the lifestyle of the people: Retailing is an integral part of modern society. It shapes the way of life. Previously, trading goods were a part of a traditional society. But recently, buying and selling goods have become a brand-dominated activity.
2. Retailing supports the economy: The importance of the retail sector is mirrored in its contribution to the development of an economy. Its offering is much more visible in the modern era than in the past. As the retail sector is linked to a considerable portion of the economy, its contribution to GDP is important. Retailing is the motive power of the economy. It aims at promoting its sustained growth.
3. Retailing governs the supply chain: Goods and service flow from manufacturers or service providers to consumers. Retailers' role becomes crucial when consumers are large in number and widely distributed. Retailers serve as a connecting link between wholesalers and consumers. Because of its dominant position in the supply chain, the retail structure has regularly developed over the years.
Nowadays, retailing is characterized by many large chains rather than small-scale independent retailers. The formalization and rising importance of retailing have made it strong in the distribution channel. Now, retailers are compared with manufacturers, indicating retailers' growing dominance within the supply chain.
Moreover, the yearly turnovers attained by retailers can be compared with the biggest companies in other service fields.
4. Retailing is integrative: Retail growth rate is accelerating. As a result, retailing has emerged from several interrelated disciplines, like geography, economics, management and marketing.
5. Retailing is accepted as a subject area in its own right: Retailing is an approved area of academic debate, like marketing and management, developed fully as an area of study. University research centers focus on retailing, and professional appointments in retailing have been made. In addition, academic journals centering on retailing are being published globally.
6. Retailers enjoy status as main employers: In current society, retailers are the major employers. It is estimated in developed countries that the retail industry utilizes one in nine of the workforce. Retailers utilize a significant proportion of the general workforce.
More than two-thirds of the retail force are women. Also, more than half of retail employees are employed part-time. This greatly flexible workforce is competent in adapting to differing labor demands. Retail employees got lower pay and had long working hours in the past. But now, the retail sector is turning more organized with a better pay scale.
7. Retailers are gatekeepers within the distribution channel: Retailers are becoming increasingly critical in their role as gatekeepers within the distribution channel. In the past, suppliers were dominant. Retailers provided the merchandise on offer, and consumers selected from them. Yet, as retailers have become significantly powerful, they can impact suppliers and stock the brands they wish to sell. So, customers can buy only what is stocked and presented by the retailers. Retailers are thus regarded as shaping consumer demand.
8. Retailing has scope for developing internationally: Retailing presents scope for turning retail operations outside the home market. For example, retailers concentrating on luxury goods markets are expanding their business internationally. Moreover, retailers are moving into more geographically and culturally distant markets.