How many types of retail stores are there?

Retailing refers to a process where the retailer sells the goods directly to the end-user for his own consumption in small quantities.

A department store is a set-up which offers wide range of products to the end-users under one roof. In a department store, the consumers can get almost all the products they aspire to shop at one place only. Department stores provide a wide range of options to the consumers and thus fulfill all their shopping needs.

Merchandise:
Electronic Appliances
Apparels
Jewellery
Toiletries
Cosmetics
Footwear
Sportswear
Toys
Books
CDs, DVDs

Examples - Shoppers Stop, Pantaloon

Discount stores also offer a huge range of products to the end-users but at a discounted rate. The discount stores generally offer a limited range and the quality in certain cases might be a little inferior as compared to the department stores.

Wal-Mart currently operates more than 1300 discount stores in United States. In India Vishal Mega Mart comes under discount store.

Merchandise:
Almost same as department store but at a cheaper price.

A retail store which generally sells food products and household items, properly placed and arranged in specific departments is called a supermarket. A supermarket is an advanced form of the small grocery stores and caters to the household needs of the consumer. The various food products (meat, vegetables, dairy products, juices etc) are all properly displayed at their respective departments to catch the attention of the customers and for them to pick any merchandise depending on their choice and need.

Merchandise:
Bakery products
Cereals
Meat Products, Fish products
Breads
Medicines
Vegetables
Fruits
Soft drinks
Frozen Food
Canned Juices

A retail format which sells limited stock in bulk at a discounted rate is called as warehouse store. Warehouse stores do not bother much about the interiors of the store and the products are not properly displayed.

Mom and Pop stores are the small stores run by individuals in the nearby locality to cater to daily needs of the consumers staying in the vicinity. They offer selected items and are not at all organized. The size of the store would not be very big and depends on the land available to the owner. They wouldn’t offer high-end products.

Merchandise:
Eggs
Bread
Stationery
Toys
Cigarettes
Cereals
Pulses
Medicines

As the name suggests, Speciality store would specialize in a particular product and would not sell anything else apart from the specific range.Speciality stores sell only selective items of one particular brand to the consumers and primarily focus on high customer satisfaction.

Example -You will find only Reebok merchandise at Reebok store and nothing else, thus making it a speciality store. You can never find Adidas shoes at a Reebok outlet.

Many retail stores operating at one place form a mall. A mall would consist of several retail outlets each selling their own merchandise but at a common platform.

Now a days the customers have the option of shopping while sitting at their homes. They can place their order through internet, pay with the help of debit or credit cards and the products are delivered at their homes only. However, there are chances that the products ordered might not reach in the same condition as they were ordered. This kind of shopping is convenient for those who have a hectic schedule and are reluctant to go to retail outlets. In this kind of shopping; the transportation charges are borne by the consumer itself.

Example - EBAY, Rediff Shopping, Amazon

Dollar stores offer selected products at extremely low rates but here the prices are fixed.

Example - 99 Store would offer all its merchandise at Rs 99 only. No further bargaining is entertained. However the quality of the product is always in doubt at the discount stores.

A product usually goes through different intermediaries before it is available to the end consumers. It is almost impossible for manufacturers to sell their products directly to customers. For example, a bread manufacturer cannot expect people to travel miles just to get a pack of bread.

This is where retail stores come in a place that makes a product available to the end consumer. For example, a pharmacy or drug store that sells hundreds of products from multiple manufacturers under one roof is a typical example of a retail store. But do you know there are numerous types of retail stores?

The Marketing Tutor has prepared a detailed list of the most common types of retail stores all over the world.

• What is a Retail Store?
• Types of Retail Stores
  • Specialty stores
  • Department stores
  • Convenience stores
  • Supermarkets
  • Discount stores
  • Drug stores/medicine stores
  • Hypermarkets
  • Used goods store
  • Off-price stores
  • Extreme discount stores
  • Ecommerce stores
  • Dollar store
• Final words

What is a Retail Store?

A retail store, in simplest words, is a form/type of business that directly sells goods to the end consumers. In other words, retail stores are the sales point where consumers can buy products for non-business use.

As far as the prices are concerned, retail stores sell products at marked-up prices because they stand last in the supply chain. The manufacturer sells the product to wholesalers, who then distribute them (at an increased price) to the retail stores. Retail stores then sell products to consumers after keeping a profit margin of their own.

Types of Retail Stores

Currently, there are 12 common types of retail stores, including;

Specialty stores

Specialty stores, as the name suggests, have a relatively narrow product line. They usually sell one or two products or multiple products of similar nature. Generally, specialty stores sell products to a group of customers that are not really price-driven.

For example, an electronics retail store may sell air conditioners, water purifiers, refrigerators, etc. Similarly, a sports store may specialize in equipment related to a particular sport or multiple sports.

In a broader sense, company franchises or independent agencies selling products of one company can also be categorized as specialty stores. For example, a retailer may sell multiple products of Pel or Dawlance Company.

Department stores

Departmental stores are generally bigger retail units where you can find a wide array of products. These stores are generally located in shopping malls, but some retailers may have their own separate spaces. Department stores may sell garments, beauty products, toys, FMCGs, eatable items, etc. Moreover, department stores usually have different sections for different types of products.

However, it is important to note that department stores don’t cover as many categories as hypermarkets or supermarkets. Common examples include Kohl’s, Macy’s, Pantaloons, etc.

Convenience stores

Convenience stores basically provide commonly or routinely used goods to customers near their doorsteps. These stores have a narrow product line and may not have much of variations in the products they sell. Convenience stores have smaller stocks, and their prices are higher than departmental stores or hypermarkets.

Convenience stores are successful in attracting customers because people usually avoid traveling miles just to buy a few regular-use products. You can find these types of stores on every other street or block.

Supermarkets

Supermarkets are probably the most comprehensive and highly categorized form of retailing. Supermarkets mostly target FMCGs such as eatables, groceries, laundry, bakery products, detergents, soaps, shampoos, etc. Supermarkets have less focus on durable consumer goods, but the best thing about supermarkets is the amount of variations/options available.

Unlike convenience stores, you can find multiple varieties of a single product, and prices are also lower. Supermarkets pay attention to segmentation/categorization to attract customers. Common examples include Costco, Whole Foods, and Big Bazaar.

Discount stores

Discount stores, as the name suggests, attract customers by selling products at discounted prices. These stores earn profits by lowering prices and increasing sales volume. Walmart is a classic example of discount store retailing. Although Walmart can be categorized as a supermarket, its marketing model is based on attracting customers by offering huge discounts.

Basically, discount stores buy products from manufacturers in massive quantities and at lower prices. Then, even after offering discounted prices to customers, discount stores can still make high profits due to greater sales volume.

Drug stores/medicine stores

Traditionally, medical stores used to sell medicines and basic medical apparatus, but things have changed now. Drug stores have widened their product line by adding cosmetics, beauty products, common eatable items, healthcare products, basic-to-advanced medical apparatus, personal care products, and groceries as well. In fact, drug stores in many countries are offering basic medical checkups/consultations.

Hypermarkets

Hypermarkets are basically a broadened form of supermarkets with more variation and diverse product lines. Hypermarkets basically provide you FMCGs and durable consumer products under one roof. From electronics to clothing to footwear to cosmetics, you can find almost every product you need as a “residential consumer.”

Another good thing about Hypermarkets is you can find products with different qualities. You can find low, medium, high, and premium quality products of the same category. Common examples include Tesco, Walmart, Sainsbury, Costco, and Asda.

Used goods store

Selling used or second-hand products have been a common practice for decades, but it was limited to occasional or seasonal selling. Mostly, sellers used to arrange infrequent stalls to sell their used products, but it is now becoming a widely recognized form of retailing. In fact, many renowned brands like Audi are endorsing used goods consumption to normalize it in the communities.

Off-price stores

Off-price stores sell products that are either damaged during transportation or had minor defects during production. Manufacturers or wholesalers sell these products to off-price stores for considerably low prices. However, these products may be cheaper, but they usually don’t last long. Alibaba and Amazon have really promoted the sale of off-price goods.

Extreme discount stores

Extreme discount stores are one step ahead of discount stores in terms of product prices and discount percentages. These stores usually purchase inventory from local and private label brands at meager costs and sell at lower prices. However, extreme discount stores often find it difficult to get a regular stock supply and may face interruptions in sales.

People generally think that extreme discount stores sell low-quality products, which is not true. In fact, many local brands start promoting their products through extreme discount stores. Common examples include Lidl and Aldi.

Ecommerce stores

E-commerce retailing is the latest addition to the retailing business, and it indeed is the future. Ecommerce stores don’t have to bear distribution and storage costs, thus making it easier for them to sell products at amazingly low prices.

Buyers book their orders on sellers’ websites or social media outlets and make payments online. The company then delivers the product to the given address. E-commerce retailing is becoming a global practice because of changing consumer behavior. Common examples include Amazon, Etsy, Alibaba, eBay, Macy’s, etc.

Dollar store

Dollar stores are another category of discount stores where you can buy routine-use products are meager rates—usually one dollar or less. Common examples include Family Dollar, Dollar Tree, Dollar General, etc.

Final words

The future of retailing is constantly changing, and businesses are trying to maintain a balance between online retailing and physical retailing. However, millennials are more inclined toward online shopping, and that is why online retailers have gained immense fame worldwide. 

Let us know if we missed any type of retail stores!

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