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Retailer: Characteristics, Functions and Services

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Characteristics, Functions and Services of a Retailer


In the fast changing globalized and a technology-driven business world, Retail industry over last few decades has witnessed a sea change. World’s largest retail giant of the present times Walmart is operating worldwide by establishing hypermarkets in various countries by taking the help of sophisticated means of communication as well as information systems technology.
A careful analysis of the trends reveals that in the Fortune 500 list of organizations, 50 are from retail industry and the top rank is occupied by the world’s No. 1 retail giant Walmart. The statistics convincingly reveal how fast the retail industry has grown and paved the path for expansion of business as well as employment opportunities.

Characteristics of a Retailer

  • In the entire distribution chain, a retailer is considered to be the final link, who deals directly with the customer.
  • A retailer purchases in bulk from the wholesalers and sells the products to the customers in small quantities.
  • A retailer essentially maintains a variety of merchandise.
  • The aim of a retailer is to achieve maximum satisfaction by exceeding their expectations and delivering exceptional services.

Key Functions Performed by a Retailer

  • A retailer performs the dual functions of buying and assembling of goods. The responsibility of a retailer is to identify the most economical source for obtaining the goods from the suppliers and passing on the advantages to the consumer.
  • The retailers perform the functions of warehousing and storing. They store the goods in bulk and make them available as per the requirement of the consumer. Warehousing and store keeping helps in ensuring uninterrupted availability of the goods to the consumers.
  • The primary function of a retailer is selling the products to the customers for which various techniques or business practices are being adopted by the retailer to achieve the strategic goals.
  • The prime focus of a retailer is on maximizing customer satisfaction by delivering quality products and services both on cash as well as credit basis. As a result of which, retailer always runs the risk of accumulating bad debts on account of non-payment of the amount from the consumer.
  • A retailer needs to have robust risk management capabilities. Various kinds of risks can be involved in a retail business which a retailer should be well prepared with like loss or damage of the products due to deterioration in quality, perishability or spoilage. A change in customer’s buying preferences or tastes can also affect the retail business to a great extent, or even the products may be damaged due to the natural calamities or vagaries of nature.
  • A retailer performs the crucial function of grading for all those goods which at times are either left ungraded by the wholesalers or manufacturers so that the customers readily accept the goods. The retailer is responsible for the packing of goods in small packages or small containers for the customer’s convenience.
  • The retailers are the direct point of contact or communication with the customers; hence they gather information regarding the changing tastes and preferences of the consumers, pass on the customer feedback to the manufacturers for continuous improvement in service delivery.
  • Retailers act as a vital channel for the launch of new products in the market as they are the direct interface with the consumers and can communicate directly with the targets consumers about the new product features and advantages.
  • The retailers are responsible for the product promotion and advertisement by planning the product displays and visual merchandising for attracting the customers.

Services Provided by a Retailer

To Customers:

  • A Retailer ensures ready stock availability of goods for the customers in sufficient quantities and sells the goods to the customers as per their quantity specifications.
  • A retailer ensures availability of a wide variety of choices of products for the customers by keeping different varieties at various prices and also different brands as well.
  • A retailer can provide credit facilities and heavy cash discounts on the purchase of different products to the customers.
  • Retailers can provide customized services and pay personalized attention to the customers for achieving a higher level of satisfaction with the delivery of product or service.
  • Retailers introduce new products to the customers and also guide them with the usage of the products.
  • Retailers can provide additional services like free home delivery or after sales services.
  • Retailers purchase and maintain a stock of those products which are mostly demanded by the customers. They aim at catering to the requirements of all kinds of customers with varied buying capacities.

To Wholesalers:

  • Retailers are a valuable source of information and feedback for the wholesalers who in turn pass on the same information to the producers of the products. Crucial information related to the changes in the buying preferences of the customers, their experience with the usage of the products, feedback on the prices and quality of the products is passed on to the wholesalers. This helps in improving the existing services and in customizing the product solutions as per the requirements of the customers.
  • A retailer absorbs most of the burden of the wholesaler and also of the manufacturer by selling the goods in small quantities to the customers. The wholesalers are relieved from the burden of maintaining direct touch with the customers and managing the entire gamut of activities involved in convincing the customers for purchasing their products.
  • Retailer supports the wholesaler by acting as a channel for distributing the goods to the customers.
  • Retailer acts as the point of contact between the customer and the wholesaler. Retailers are responsible for creating and improving the demand for various products by taking care of the display and merchandising activities.
  • Retailers act as a major source of funding for the wholesale trade by placing the orders and making payments in advance to the wholesalers for those goods.
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