Retailing

Retailing consists of the sale of goods/merchandise for personal or household consumption either from a fixed location such as a department store or kiosk, or from a fixed location and related subordinated services. In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells individual items or small quantities to the general public or end-user customers, usually in a shop, also called a store. Retailers are at the end of the supply chain. Marketers see retailing as part of their overall distribution strategy.

Shops may be on residential streets, or in shopping streets with little or no houses, or in a shopping center. Shopping streets may or may not be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. On-line retailing (e-commerce) is the latest form of non-shop retailing (cf. mail order).

Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing, sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.

Retail pricing

The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailers cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.

In Western countries, retail prices are often so-called psychological prices or odd prices: a little less than a round number, e.g. $6.95. In Chinese societies, prices are generally either a round number or sometimes a lucky number. This creates price points.

Often prices are fixed and displayed on signs or labels. Alternatively, there can be price discrimination for a variety of reasons. The retailer charges higher prices to some customers and lower prices to others. For example, a customer may have to pay more if the seller determines that he or she is willing to. The retailer may conclude this due to the customer's wealth, carelessness, lack of knowledge, or eagerness to buy. Price discrimination can lead to a bargaining situation often called haggling — a negotiation about the price. Economists see this as determining how the transaction's total surplus will be divided into consumer and producer surplus. Neither party has a clear advantage, because the threat of no sale exists, whence the surplus vanishes for both.

Retailers who are overstocked, or need to raise cash to renew stocks may resort to "Sales", where prices are "marked down", often by advertised percentages - "50% off" for example."Sales" are often held at fixed times of the year, for example January sales, or end-of-season sales, or Blue Cross Sale

Etymology

Retail comes from the French word retaillier which refers to "cutting off , clip and divide" in terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring". Like the French, the word retail in both Dutch and German (detailhandel and Einzelhandel respectively) also refer to sale of small quantities or items.

Retail types

There are three major types of retailing. The first is the market, a physical location where buyers and sellers converge. Usually this is done on town squares, sidewalks or designated streets and may involve the construction of temporary structures (market stalls). The second form is shop or store trading. Some shops use counter-service, where goods are out of reach of buyers, and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. Self-service, where goods may be handled and examined prior to purchase, has become more common since the Twentieth Century. A third form of retail is virtual retail, where products are ordered via mail, telephone or online without having been examined physically but instead in a catelogue, on television or on a website. Sometimes this kind of retailing replicates existing retail types such as online shops or virtual marketplaces such as E-Bay..

Buildings for retail have changed considerably over time. Market halls were constructed in the middle ages, which were essentially just covered marketplaces. The first shops in the modern sense used to deal with just one type of article, and usually adjoined the producer (baker, tailor, cobbler). In the nineteenth century, in France, arcades were invented, which were a street of several different shops, roofed over. From this there soon developed, still in France, the notion of a large store of one ownership with many counters, each dealing with a different kind of article was invented; it was called a department store. One of the novelties of the department store was the introduction of fixed prices, making haggling unnecessary, and browsing more enjoyable. This is commonly considered the birth of consumerism . In cities, these were multi-story buildings which pioneered the escalator.

In the 1920's the first supermarket opened in the United States, heralding in a new era of retail: self-service. Around the same time the first shopping mall was constructed which incorporated elements from both the arcade and the department store. A mall consists of several department stores linked by arcades (many of whose shops are owned by the same firm under different names). The design was perfected by the Austrian architecht Victor Gruen. . All the stores rent their space from the mall owner. By mid-century, most of these were being developed as single enclosed, climate-controlled, projects in suburban areas. The mall has had a considerable impact on the retail structure and urban development in the United States.

In addition to the enclosed malls, there are also strip malls which are 'outside' malls (in Britain they are called retail parks. These are often connected to supermarkets or big box stores. Also, in high traffic areas, other businesses may lease space from the supermarket or big box store to sell their goods or services from. A recent development is a very large shop called a superstore. These are sometimes located as stand-alone outlets, but more commonly are part of a strip mall or retail park.

Local shops can be known as brick and mortar stores in the United States.Many shops are part of a chain: a number of similar shops with the same name selling the same products in different locations. The shops may be owned by one company, or there may be a franchising company that has franchising agreements with the shop owners (see also restaurant chain).

Some shops sell second-hand goods. Often the public can also sell goods to such shops, sometimes called 'pawn' shops. In other cases, especially in the case of a nonprofit shop, the public donates goods to the shop to be sold (see also thrift store). In give-away shops goods can be taken for free.

There are also 'consignment' shops, which is where a person can place an item in a store, and if it sells the person gives the shop owner a percentage of the sale price. The advantage of selling an item this way is that the established shop give the item exposure to more potential buyers.

The term retailer is also applied where a service provider services the needs of a large number of individuals, such as with telephone or electric power.

Variety Store

"Dollar store" redirects here but may also refer to Dollar store (Cuba).

File:800px-99centstore.jpg

A 99 cent store

A variety store or price-point retailer is a retail store that sells inexpensive items, usually with a single price point for all items in the store. Typical merchandise includes cleaning supplies, toys, and candy.

The store is usually named for the price of the merchandise sold in the store (but see below); the names vary by area and time, as each country has a different currency, and the nominative price of the goods has increased over time due to inflation. Modern names include:

• dollar store, $1.25 store, 50-cent store, etc. in the United States
• pound store, £2 store, etc. in the United Kingdom
• $2 shop in Australia and New Zealand
• 100-yen shop or one coin shop in Japan
• 10-dollar shop (USD 1.28), 8-dollar shop, etc. in Hong Kong
• guilder store in the Netherlands
• Todo a 100 shop in Spain
• Magasin à prix unique in France
• Wszystko po 4 złote in Poland
• 38 000 lei shop in Romania
• um e noventa e nove (BRL 1.99 = USD 0.90) in Brazil
• Loja dos 300 in Portugal 300 escudos = 1,5 Eur

File:100-Emon.jpg

100-Emon at Kohnoike Higashi Osaka-City

Some variety stores are not true "single price-point" stores despite their name. Often the name of the store, such as "dollar store", is only a suggestion, and can be misleading. Some stores that call themselves "dollar stores" have items that cost more or less than a dollar. Some stores also sell goods priced at multiples of the named price. The problem with the name is also compounded by sales tax, which leads to taxable items costing the customer more than a dollar. Some purists maintain that the phrase "dollar store", in the strict sense, should only refer to stores which sell only items that cost exactly $1.

Some stores can have prices which are not round multiples of currency, such as the "99-cent store" or "$2 store", or "88-yen store". As inflation increases the nominative price of goods, the names of such stores must also change over time.

Products

Variety store products include cleaning supplies, small tools, personal hygene supplies, kitchen supplies, organizational supplies, small office supplies, holiday decorations, electronics supplies, gardening supplies, home decor novelties, toys, pet supplies, out of print books, DVDs and VHS tapes, food products and automotive supplies.

Some items sold at a dollar store would be a dollar or less anyway, whereas other items are a substantially better deal. There are four reasons a dollar store is able to sell merchandise at such a low price:

• The product is a generic or "knock-off", often specially manufactured for such stores.
• The product was manufactured cheaply for a foreign market but was then imported by an unauthorized distributor (grey market goods).
• The product is purchased from another retail store or distributor as overstock, closeout merchandise, or seasonal merchandise at the end of the season.
• The items were manufactured to coincide with the promotion of a motion picture, television show or special event (e.g. Olympic games), and are past their prime.

Some stores carry mostly new merchandise, some mostly closeout merchandise bought from other stores below regular wholesale cost.

Depending upon the size, some variety stores may have a frozen food and drink section, and also one with fruits and vegetables. The Deal$ and 99 Cents Only Store chains in the U.S. are two such examples.

History

The concept of the variety store originated with the five and dime, a store where everything cost either five cents (a nickel) or ten cents (a dime). The originator of the concept may be Woolworths, which began in 1878 in Utica, New York. Other five and tens that existed in the USA included W.T. Grant, J.J. Newberry's, McCrory's, Kresge, McClellan's, and Ben Franklin Stores. These stores originally featured merchandise priced at only five cents or ten cents, although later in the century, the price range of merchandise expanded. Inflation eventually dictated that the stores were no longer able to sell any items for five or ten cents, and were then referred to as "variety stores". Given that $0.05 in 1913 when adjusted for inflation is $1.02 in 2006 dollars, this retailing concept has shown remarkable vitality over the years.

Well-known five and dimes included:

• Duckwall-ALCO Retail Stores
• Ben Franklin Stores
• Butler Brothers
• W.T. Grant
• Kresge's
• Kress Stores
• McCrory Stores
  • J.J. Newberry
  • TG&Y
  • McLellan's
  • H.L. Green
  • G.C. Murphy
• Neisner Brothers ("Big N" in later years)
• Woolworth's
• M.H. Fishman Stores

Of these, only Duckwall-ALCO and Ben Franklin continue to exist.

International

Europe

In Spain there are Todo a 100 shops ("everything for 100 pesetas" (0.60 €)), although due to the introduction of the euro and inflation, most products cost a multiple of 0.60 or 1 euro. Most of these shops maintain their name in pesetas, and most of them have been renamed as Casi todo a 100 ("almost everything for 100 [pesetas]") or Todo a 100, 300, 500 y más ("everything for 100, 300, 500 or more").

Asia

In Japan, 100-yen shops (百円ショップ hyaku-en shoppu) or "One coin shops" have been proliferating across Japan since around 2001. This is considered by some an effect of decade long recession of Japanese economy.

For a few years, 100-yen shops existed not as stores in brick-and-mortar building, but as vendors under temporary, foldable tents. They were (and still are) typically found near the entrance areas of supermarkets.

One major player in 100 Yen Shops is Hirotake Yano, the founder of Daiso Industries Co. Ltd., which runs the "The Daiso" (sic) chain. The first store opened in 1991, and there are now around 1,300 stores in Japan. This number is increasing by around 40 stores per month.

In Hong Kong, department stores have opened their own 10-dollar-shop (USD 1.28) to compete in the market, and thus there are now "8-dollar-shop" (USD 1.02) in Hong Kong, in order to compete with a lower price. Note that there is no sales tax in Hong Kong, but the relative price is higher than in Japan or the US.

South America

In Brazil, these stores are called um e noventa e nove (one and ninety-nine, meaning BRL 1.99, about US 90 cents) usually written as 1,99 (note the decimal comma). They began to appear in the decade of 1990 possibly as a consequence of both the increase in the purchasing power of the low income classes after the curbing of hyperinflation and the decrease in middle-class net income due to a gradual increase in the national average tax load^{[citation needed]}.

Brazilians sometimes use the expression um e noventa e nove to refer to cheap, low quality things or even people.

Modern notable variety stores

Variety stores are often franchises.

North America

• In the United States: Dollar Tree, Dollar General, Family Dollar, Deal$, The Dollar Market, Family Dollar Stores, Fred's, Greenbacks, 99 Cents Only Store, A Dollar
• In Canada: A Buck or Two (163+), Dollarama (300+), Everything For a Dollar Store, Great Canadian Dollar Store (100+)
• In Mexico: Waldo's Dollar Mart

Europe

• In United Kingdom: Poundland (also called Euroland), Everythings a £1!, Superpound.
• In the Netherlands: Hema originally a "guilder store", now a department store
• In Germany: Pfennigland
• In France: Prisunic, Monoprix
• In Norway: Tier´n^{[citation needed]}, which is a colloquialism for ten kroner = USD 1.40.
• In Sweden: Bubbeltian, called by some Tian, which is a colloquialism for ten kronor (crowns) = USD 1.25. Another chain that has been spreading in Sweden during the last seven years is Dollarstore [1], a chain where everything costs either 10, 20, 30, 40, 50 or 100 skr, which is supposed to roughly equal one, two, three, four, five or ten dollars. It is not related to the American store.

Asia

• In Japan: Daiso, Daiei, Cando, Seria, Watts, Kyushu Plus, Mono Trading

Australia

• In Australia: Two Dollar Shop

Economics

In economic terms, the pricing strategy of dollar stores is inefficient as some items may actually be sold elsewhere for less than a dollar. However, this is balanced by the marketing efficiencies of a single price structure and consumers accept potentially overpriced items. The pricing inefficiency becomes unacceptable at higher price points. Thus there are no "100 dollar stores" where all items sell for $100; consumers expect to pay the correct amount as inaccuracies result in significant dollar amounts.

Most merchandise in these stores is imported cheaply from foreign countries, most commonly in Asia.

In popular culture

• The play Come Back to the Five and Dime, Jimmy Dean, Jimmy Dean refers to a five and dime, as do the songs "Blank Page" by The Smashing Pumpkins, "Raspberry Beret" by Prince, "Love at the Five and Dime" by Nanci Griffith, "Summer of '69" by Bryan Adams, "Motherland" by Natalie Merchant (and covered in 2003 by Joan Baez) "It's Beginning to Look a Lot Like Christmas" by Meredith Wilson, "Thousands are Sailing" by The Pogues and "Rock My World (Little Country Girl)" by Brooks & Dunn.
• Mort Dixon and Billy Rose wrote the song "I Found A Million Dollar Baby (In A Five and Ten Cent Store)" for Rose's 1931 stage show Crazy Quilt.
• The US late-night talk/variety show The Tonight Show often features a segment called "99 Cent Shopping Spree" with odd or unusual dollar store items sent in by viewers.

References

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