Structure of Retailing

Structure of Retailing

Roles within the Retail Industry

  • The retail industry has a hierarchical structure which typically includes sales staff, supervisors, store managers, area managers, and executive management.
  • Sales staff are at the frontline, interacting directly with customers and carrying out transactions.
  • Supervisors manage a team of sales staff, ensuring they meet their sales targets and maintain excellent customer service.
  • A store manager is responsible for the smooth running of the entire store including staff management, sales, stock management and customer satisfaction.
  • Area managers oversee operation practices across multiple stores within a certain geographical area.
  • Executive management includes positions like the Chief Executive Officer (CEO) or Managing Director(s) who are responsible for high-level decision making for the retailer as a whole.

Supplier to Retailer to Consumer

  • A typical retail supply chain starts with suppliers or producers, moves to the retailers, and ends with the consumers or end-users.
  • Suppliers or producers are responsible for producing or manufacturing the goods that are sold in retail stores.
  • Retailers buy these goods in bulk from suppliers and sell them on to consumers at a profit.

Vertical Integration

  • Vertical integration is when retailers control more than one level of the supply chain, often aiming to increase their control over supply or consumer access.
  • There are two types of vertical integration: forward integration, where a supplier gets involved in retailing, and backward integration, where a retailer gets involved in supplying or manufacturing.
  • This can provide a more reliable supply chain and better control over product quality.

Franchises and Affiliates

  • In a franchise model, an individual or company buys the rights to operate under a brand’s name. The franchisee essentially runs a branch of the franchisor’s business.
  • An affiliate retailer operates independently but has a cooperative relationship with a larger retail organisation.
  • Both franchises and affiliate models allow for business expansion without the risk or expenditure of opening new establishments.

Evolving Structure

  • The structure of retailing is ever-evolving with technological advancements and changing consumer behaviours.
  • There is an increasing trend towards omni-channel retailing, where retailers operate across both traditional and digital platforms.
  • There is also a growing focus on building supply chain resilience to cope with disruptions and shifts in consumer demand.