Classification of Retailers

Classification of Retailers

By Ownership Structure

• Independent retailers are typically owned by individuals or families. They operate one store and are crucial in offering a more personalised service.
• Chain stores, run by one company, operate several outlets across various locations. They often benefit from economies of scale.
• Franchises indicate that the business operates under a license from a franchisor and follows their business model. Franchisees benefit from the brand recognition of their franchisor.
• Co-operatives work on a membership model where every member gets a say in the decision-making process. Profits are typically shared among members.

By Type of Goods Sold

• Supermarkets are large-scale grocery stores that offer a diverse range of products, including fresh produce, household goods, clothing, and more.
• Convenience stores are small retail businesses that are often open long hours and are typically located close to residential areas. They offer a limited range of everyday and essential items.
• Specialty Stores specialise in a specific category of goods, and their staff often have high levels of product knowledge. Examples include bookstores, bike shops, or butchers.
• Department stores are large retail establishments that sell a wide range of consumer goods in different sections or departments.

By Service Level

• Self-service retail requires minimal interaction with sales staff. The customers select the goods they want and proceed to check-out.
• Limited service retailers, such as supermarkets, provide moderate assistance, such as help with returns or check-out.
• Full-service retailers, such as luxury boutiques, provide high levels of personalised service, including sales associates who can suggest products, organise deliveries, and provide aftercare.

By Sales Channel

• Brick-and-mortar retailers operate physical stores where customers can see, touch, and try the products before purchase.
• E-commerce retailers serve customers through an online marketplace, offering a wide range of products that can be delivered directly to the customer.
• Multichannel retailers use a mixture of online and physical stores to reach their customers, aiming to provide a seamless shopping experience regardless of the channel.

By Pricing Strategy

• Discount stores sell goods at lower prices, often by maintaining minimal service levels and focusing primarily on price-sensitive customers.
• Off-price retailers buy excess stock from manufacturers and retailers at a discount and pass the savings onto customers, examples include outlet stores.
• Premium retailers offer high-quality, high-cost items and typically focus on offering excellent customer service.