Definition of Retail Marketing
Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers. The word ‘retail’ is derived from the French work retailer, meaning ‘to cut a piece off’ or ‘to break bulk’.
Retail marketing is comprised of the activities related to selling products directly to consumers through channels such as stores, malls, kiosks, vending machines or other fixed locations, according to the Free Dictionary. In contrast, direct marketing to consumers attempts to complete a sale through phone, mail or website sales.
The successful implementation of the components of the traditional marketing mix (product, place, price and promotion) is essential for success in retail marketing. The savvy marketer must have a thorough understanding of his or her customers to answer the questions that are implied by each of the 4 P’s.
A retail business typically opens within a specific business category, such as men’s clothes. The retailer must decide questions relating to price range, fashion and selection. All of these issues are answered by the assumptions that the retailer makes on the products most likely to attract his targeted customer base. The ability to match products and customers is as much art as science.
Factors such as whether the store location is near the targeted customers, offers easy access and exit, and is highly visible on a well-travelled street are vitally important in the selection of a store location (place).
The perceived quality of the physical structure is also important. Customers expect expensive items to be sold in an upscale environment. Low-cost items might fare better in a location where consumers are accustomed to purchasing those bargain items.
Retail stores can range from large national chains such as Sears or Wal-Mart to a small, locally-owned business, such as a bakery. These retailers have chosen retail locations they believe match their customer’s expectations, are highly visible, and are close to the targeted customer group.
Pricing is a complex process that combines finance with human psychology. If consumers believe that a product is priced too high, they may refuse to buy. If a product seems to be priced too low, they may suspect the product quality.
Additionally, a retailer typically sets price expectations as she develops her brand. If the brand is positioned as discount, the merchant must stay consistent with pricing decisions or risk customer confusion about the store’s brand identity.
Retail marketing is dependent on in-store traffic. Marketers must make effective use of promotions to ensure a steady stream of existing and new customers visit a retail stores. The retailer’s selection of promotional channels is dictated by many factors including local competitive environment, profit margin on sales and total volume of sales. Each dollar spent in promotions must result in additional sales, or profit margins shrink to dangerous levels. Promotional media can include television, radio, print, direct mail and outdoor advertising (billboards).