Retail Trade: Definition, Characteristics & Examples

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  • 0:03 What is Retail Trade?
  • 1:55 Types of Retail Trade
  • 5:12 Lesson Summary
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Lesson Transcript
Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Retail trade offers goods to the general public, from a small-scale itinerant merchant to a warehouse-sized hypermarket. In this lesson, you'll learn more about the characteristics and types of retail trade operations.

What Is Retail Trade?

It's noon on a Saturday, and you've got a full list of errands you need to run. You stop first at a department store to pick up a pair of shoes you need for next weekend's softball game. Then you swing by a used bookstore to pick up a textbook. Last, you pull into the grocery store, determined to buy some snacks and get home before the football game comes on.

You just had a full afternoon of supporting retail trade in various forms. Retail trade encompasses the department store, bookstore, and grocery store you stopped at, along with many others who sell new or used goods to the public for personal or household use. That could include new and used clothing from specialty or consignment stores and even food and beverages from the grocer. Retail differs from wholesale trade, which focuses on selling to businesses, governments, and institutions.

Shoppers participating in retail trade
Retail Trade

The benefits of retail trade are numerous and varied. Consumers have greater choices and inventory to choose from as well as pricing that is competitive. Retail trade gives consumers an opportunity to build relationships with businesses and acquire the items they need quickly. Disadvantages come in for small-scale retailers who struggle to compete with their larger competitors, both in terms of product assortment and pricing.

According to the data website Statista, in 2017 total retail sales across the world are expected to hit almost $27 trillion. There's heavy competition in the retail trade sector as businesses vie for the attention and money of shoppers. Big businesses overtake the marketplace, making it more difficult for smaller businesses to compete. As a result, new and varied ways of attacking the retail trade industry have presented themselves as business owners look for ways to build their customer base and their bottom line. Let's examine some of the more popular types of retail trade available to consumers.

Types of Retail Trade

Just about any local store, online retailer, or big superstore you can think of will fit into one of various categories of retail trade. Let's look at some of the biggest players.

First we have itinerant and small-scale fixed shops. Itinerant retailers are the type of sellers you see at markets or in busy streets. They may not have a permanent location to sell their goods, instead relying on open and available spaces. Fixed shops, on the other hand, have a permanent location you can visit during set business hours. Examples of itinerant retailers include street traders and food cart or food truck owners. Examples of small-scale fixed shops include pharmacies and shoe stores.

Example of Itinerant Retailer
Itinerant Vendor

Next we have department stores. A department store is a larger retail location that carries many different types of goods under one roof, generally divided into different departments such as housewares or bedding. Examples include Big Bazaar, Shoppers Stop, and Lifestyle.

Chain stores are another retail trade category. Chain stores share the same basic design, layout, and products, as well as name, and are located across the nation or world. Chain stores are owned by the same company, so they are recognizable from one location to the next. A department store might be part of a chain. Some examples include Central, Brand Factory, and Planet Sports.

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