Introduction to Retail and Retail Formats
This domain tests whether you can define retailing and place any store into the correct format using objective criteria - ownership, size, assortment, service level and pricing policy. BSEH items typically give a short store description and ask you to name the format, or ask which function of a retailer is being performed.
What a retailer actually does
- Breaks bulk: buys in large quantities, sells in small units.
- Builds assortment: many brands, sizes and categories in one place.
- Holds stock close to the consumer and provides services - credit, home delivery, returns, exchange, advice.
- Passes information both ways: customer demand to the supplier, product information to the customer.
- The retailer is the last link in the chain and sells to the final consumer for personal use, not for resale.
Classifying formats
- By ownership: independent kirana, chain, franchise, cooperative, government outlet.
- By assortment: specialty (narrow but deep) versus general merchandise (broad).
- By size and price: convenience store (small, long hours, higher prices), supermarket (food-led, self-service, roughly 4,000–10,000 sq ft), hypermarket (very large, food plus non-food, low margin and high volume), department store (apparel-led, counter service, many departments), discount store, category killer.
- Non-store: e-commerce, D2C brand sites, catalogue, vending, teleshopping.
- Organized versus unorganized: organized means licensed, branded, GST-registered and usually chain-run; unorganized means kirana, weekly haat and street vendors.
Worked example
A 55,000 sq ft air-conditioned store on a highway sells groceries, garments, mobiles and furniture under one roof, self-service, with thin margins and heavy footfall. Reasoning: broad assortment across food and non-food, very large area, low-margin high-volume policy and self-service - this is a hypermarket. It is not a supermarket because of size and non-food depth, not a department store because there is no counter service, and not a mall because a mall is a building housing many independent retailers.
Traps that cost marks
- Confusing a mall (real estate, many retailers) with a department store (one retailer, many departments).
- Separating supermarket from convenience store by size alone, ignoring trading hours and price level.
- Assuming organized always means large; an unlicensed large store is still unorganized.
- Calling a wholesaler a retailer - the retailer sells to the final consumer.