Top 13 Role and Importance of Retailing (With Examples)

Retailing embraces the direct to customer sales activities of the producer, whether through his own stores or by the house to house canvassing or by mail order business.

role and importance of retailing
role and importance of retailing

Retailing is the major connection in the marketing channel between producer and end-users.

It contributes to the economy of a nation by its functions.

Role and Importance of Retailing

The role and importance of retailing can be described below:

1 Dynamic Field

Retailing faces with changing situations.

It is such a dynamic field that forecasting future developments is a very risky endeavor.

Today, retailing management, in particular, has come to be recognized as a “young person’s” field. New return forms are constantly emerging to threaten established into retail forms.

2. Basis of Sales Campaign

The success or failure of a sales campaign comes to focus on the local retail dealer. That’s where the action is.

That’s where the customer buys the product.

Related: 20 Key Nature and Characteristics of Retailing (With Example).

3. Diverse Channel

Retailing is perhaps the most diverse channel of distribution.

It includes the independent dealer, department stores, discount houses, chain stores, mass distributors, supermarkets, and shopping centers.


4. Key to Mass Distribution

Despite the Rapid growth of chain stores, discount houses, shopping centers, etc.

The independent dealer is still an important factor in our system of mass distribution.

5. Better Marketeer

In fact, the independent Merchant is today a better merchant, a better salesperson, and a more resourceful marketer because of the competition of the chains.

By adopting new methods of display, self-service, checkout, and the rest, even the small merchant can often survive and make a profit in competition with the mass distributors.

6. Choice of the Customer

Although his prices may be higher, he depends on neighborhood trade and on the millions of consumers who prefer to do business with “the shop around the corner.”

Bonus: Top 12 Disadvantages and Limitations of Sales Forecasting (Explained).

7. Frontline Activity

In the field of consumer marketing, retailing is the front line, the final step and also the early warning system for producers.

economic significance of retailing
economic significance of retaining

It is the producer and retailer who “take the temperature” of the consumer and gather information for future marketing strategies.

8. Small Investment

It is relatively easy to become a retailer.

No large investment in production equipment is required, Merchandise can often be purchased on credit, and storage space can be leased with no “down payment”.

This ease of entry into the retail business results in fierce competition and better values for customers.

Related: 13 Importance and Objectives of Sales Compensation Plan (Explained).

9. Catering to Consumers

To enter retailing is easy to fail is even easier! To survive in retailing, a firm must do a satisfactory job in its primary role – catering to consumers.

A successful retailer as a merchant who sells goods that won’t come back to customers who will.

Of course, a retail firm also must fulfill its other role – serving producers and wholesalers.

This dual role is both the justification for retailing and the key to success in retailing.

10. Nearer to the Consumption Pole

If we think of production and consumption as the two poles of the distribution process, wholesaling would be nearer to the production pole and retailing would be nearer to the consumption pole.

11. At Least One Middlemen

Distributing consumer products begins with the producer and ends with the ultimate consumer.

Between the two there is usually at least one middleman – a retailer.

Bonus: 21 Benefits and Limitations of Personal Selling (Explain with Examples).

12. Performs Double Role

Retailers serve as purchasing agents for consumers and as sales specialists for Producers and wholesaling middleman.

They perform many specific activities, such as anticipating customers’ wants, developing product assortments and financing.

13. Creation of Economic Utility

Retailers go beyond merely selling products off the shelf.

They add value to the goods and services they sell creating time, place, possession and forms utilities.

Retailers create place utility by opening stores in convenient locations.

They create possession utility when they put products in the consumer’s hands.

What is scope and significance of retailing?

Retailing includes all activities incidental to selling to the ultimate consumer. Today, retailing has become the largest single industry in the world in terms of the number of people employed.

Thus, now you understand the role and importance of retailing.

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