Are you considering getting into retail? To give you an idea, according to Statista , retail generated revenues of over 26 trillion US dollars globally in 2021. Furthermore, it is projected to reach 30 trillion by 2024.
Following the mandatory lockdown, consumer behavior changed and retail established new ways of operating. Although physical stores remain popular, online retail sales, or e-commerce , are gaining relevance.
In this post, we help you understand the new forms of retail by answering the following questions:
What is retail?
What is wholesale?
Differences between retail and wholesale;
Digital tools in retail sales.
What is retail?
Retail trade, or retail commerce, is the last step in the chain of distribution of goods. In retail, the customer or final consumer buys a product or service for personal use. This characteristic is what allows retail trade to have a large clientele and its growth to be constant.
With the advance of digital transformation , many companies have turned to online commerce. Thus, we can distinguish three retail sales options. Among the most popular:
1. Retail sales in physical stores : it is only possible to purchase a good in a physical store, which leaves out consumers who live in remote areas.
2. Online retail store : the acquisition of goods and economic transaction is done online. It is not possible to visit a physical location to see the product or make inquiries in person, but it includes consumers from anywhere in the world.
3. Hybrid retail: The consumer can choose to visit a physical store or use e-commerce.
There are different ways to sell. For example, direct or personal sales, indirect sales, B2B sales, etc. Know the different types of sales and choose the ones that work best for your customers.
To better understand what retail is, it may help to know the opposite option: wholesale sales.
What is wholesale?
Wholesale is the transaction that takes place between companies to supply another business. While retail is the last stage, wholesale is an intermediate step. A wholesale business is the link between a wholesale company and the merchant who needs to supply to sell to the final consumer.
2 examples of wholesale are:
Supermarket suppliers: they supply the supermarket with different goods (food, cleaning products, etc.)
Technology company suppliers : supply the electronic components business.
It is worth clarifying that, in recent years, wholesale trade has also undergone changes. Previously, only companies that needed to supply themselves to sell to the final consumer bought from wholesale trade. However, in some countries this option has been included for the final consumer. In fact, 46 million households in Latin America buy from this trade.
For example, the German wholesale supermarket Makro sells to other companies, but it is also possible to buy in bulk as an end consumer. Families make large purchases to supply themselves for a period of time. In other words, it is a retail purchase because it is for personal use – without the intention of reselling it later – but in bulk and at wholesale price, which allows them to save. It currently operates in several countries in the region such as Brazil, Argentina and Colombia.
Look at some of the differences between retail and wholesale in this table:
retail Wholesale
Sold to final consumer It is sold to companies, supermarkets, distributors, etc.
Sold in small quantities Sold in large volumes at once
Highest price per unit Cheaper price for quantity
Purpose: personal use Purpose: to supply businesses
They are available in india phone code businesses such as supermarkets, warehouses, businesses in different sectors (clothing, bazaar, bakeries, etc.) They are obtained through distributors and large stores or factories.
Last link in the chain of distribution of goods Intermediate step in the chain of distribution of goods
You already know the difference between retail and wholesale sales, and you've also seen the new trends in online sales and wholesale sales for the end consumer. We'll see how you can make the most of the type of sale you choose.
Digital tools in retail
As a result of the pandemic, digital commerce has advanced more than 10 years in just 3 months . What was once the only option to survive is now a benefit that companies cannot ignore.
If you want to be successful in retail, you should consider including digital tools.
Zendesk's Sales Trends report showed what sales leaders think: