What is Retailing? Functions and Importance of Retailing


The origin of word ‘retail’ is related to the French word ‘retaillier’ Which means ‘to break the bulk’ or ‘to cut a piece off’. In the process of distribution, the products move from the manufacturers to the final customers. Several intermediaries or middlemen are involved in this process and the retailers are the last ones. Retailers directly offer the firm’s product to the customers, and thus, link the customers with the manufacturers.

Meaning and Definition of Retailing

According to Cundiff and Still___” Retailing consists of all those activities involved in selling directly to ultimate consumers”.

According to Mc. Carthy___” Retailing is selling to final consumer products to households”.

Functions of Retailing

  1. Sorting: Sorting is one of the main functions in retailing. Producers generally offer large quantities of similar or different products and expect it to be sold in lots to concerned buyers to reduce cost, Whereas customers require variety of products to choose from and buy only in small quantities.
  2. Breaking Bulk: Big lots of products are transported by the producers and wholesalers in order to reduce the costs which are then divided into smaller quantities by the retailers so that these products can match with the consumption needs of consumers.
  3. Holding Stock: In order to support the producers in inventory control and production, retailers provide stock holding facility to them. In this, they maintain a significant level of inventory of products to be supplied instantly to the ultimate consumers when they need it.
  4. Supplementary Services: In order to improve the sales, credit and hire-purchase services are also offered to the customers. Filling orders, processing orders and delivering as well as installing products also come under the function of retailers.
  5. Channel of Communication: Acting as a channel of communication between producers/ wholesalers and the customers is also a function of the retailing. Customers learn a lot about the features, traits of a product or service with the help of sales force, advertisement and displays. On the other hand, sales forecasting, consumer complaints, and delivery delays are learned by the producers. Defective or unsatisfactory merchandise and services can be replaced or modified by the manufacturer.

Importance of Retailing

  1. Assessing Consumer’s Tastes and Preferences.
  2. Promoting New Products.
  3. Availability of Variety of goods.
  4. Demand Creation for specific products.
  5. Distribute different products of the procedures directly to the customers.
  6. Promoting New Products.
  7. Credit Facility to the ultimate consumers.