/Shopping around: the different types of retail
Shopping around: the different types of retail

Shopping around: the different types of retail

Looking at the retail environment today in comparison with that of 30 or 40 years ago, it is clear that significant changes have taken place in terms of the forms of retail store available to consumers. One of the primary drivers behind these changes is the massive increase in the importance of marketing. Retailers have had to recognise that if they want to maximise their profit, they have to offer customers unique experiences and offers. This has led to the variety of retail outlets that we can now see that are dependent on consumer shopping patterns and the capacities of the manufacturers. Every retail outlet is now trying to differentiate itself from its competitors through its product offer and the way this is presented to consumers.

Apart from providing different products, retailers are often structurally different in ways that have an impact on both their strategy and success or failure. One reason that the retail industry is such a significant commercial entity is that it is diverse. There are many different types and sizes of stores, providing a wide range of services and products, and they have many different forms of management and ownership.

What defines a retail store?

Retail stores are businesses selling goods directly to the customer for non-commercial purposes. The goods are usually sold with a markup to give the retailer a profit. There are a wide variety of retail stores serving different sorts of customers and using a variety of sales methods.

The way retail works

The retail process begins with the manufacturer. Manufacturers take raw materials to make products using industrial processes and more or less skilled labour. Once the products are finished, they are sold to a wholesaler; the wholesaler then sells significant quantities of the product to retailers at a lower price than retail. Retailers may buy products either from wholesalers or direct from manufacturers. Retailers then sell the products to their customers with a mark up for profit.

Types of retail store

Department stores

Department stores are a complex form of retail outlet offering many different products to the consumer. Effectively a department store is like a group of small retail stores all under one roof and owned by the same entity. Department stores are famous for offering a wide range of products and catering to a wide variety of budgets.

Specialty stores

Specialty stores are retail outlets focusing on a narrow range of products, perhaps just one or two categories. Customers who use specialty stores are usually less motivated by price and more by quality and service. Examples of specialty stores are sporting goods stores, women’s fashion outlets, hardware stores, etc.


Supermarkets are a very common form of retail outlets. They are substantial self-service outlets split into departments specialising in food and household items. Supermarkets focus on fast and large turnover of goods; supermarkets pay a lot of attention to the range of products that they can offer and the way they can be displayed to attract consumers and accelerate turnover.

Convenience stores

Convenience stores are usually situated in residential areas such as suburbs. They do not have such a large range of products as supermarkets, and they are generally more expensive, charging a premium to reflect the convenience of having a local store with long opening hours. Convenience stores offer very quick service and fast turnover.

Discount stores

Discount stores sell products at a considerable discount from the standard retail price. They work on offering low prices with rapid turnover and high levels of sales.


A hypermarket is effectively a very large supermarket, selling a massive product range, often with more consumer durables such as electronics compared to a standard supermarket. While supermarkets are frequently found in retail parks and malls, hypermarkets are often the size of a mall on their own.

Warehouse stores

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Warehouse stores have a limited range of products, but they sell them in bulk with significant discounts. This type of store relies less on marketing than on the fact that he can offer very large discounts.

E-commerce store

These are virtual stores allowing customers to shop from anywhere in the world at the time of their choosing. The customer orders the products they desire online and they will be shipped to their address.

Dollar stores

Dollar stores are another form of discount store offering a range of goods at substantial reductions. Their USP is that all the products generally cost the same amount.


A drugstore is a specialty store that sells medicines, although nowadays they often offer a wider range of products as well.


Franchise stores combine large national businesses with local owners. Owners buy franchises which allow them to use a company’s business model and brand for a defined period. Franchisees are often given training, support and advice by the parent company, as well as being supplied with the product ranges that they sell.

Vending machines

Vending machines have been a popular form of retail for well over 100 years. Traditionally vending machines would sell small non-durable consumer products such as cigarettes and chocolate. However, they now sell a wider range of goods targeting specific markets, for example, many airports have vending machines selling items that travellers frequently forget, such as toothbrushes, headphones, make up, etc.

All of the above retail strategies can be adapted to fit the requirements of a specific market, and they may be combined in order to draw in more customers.

The retail environment has experienced massive change over the last decades, with customers now often preferring to shop online than visit a store. Although many new retailers now only sell online, in future many will succeed by offering combinations of both bricks and mortar and online outlets. The global pandemic has hastened the changes in the market, with many retailers rapidly adopting new technology, creating digital outlets, and accepting new forms of digital payment.

If you are thinking about entering the retail market, remember that it is crucial to have the right sort of business insurance in place. Business interruption insurance can ensure that you do not lose out in the event of unexpected occurrences such as natural disasters or pandemics; commercial property insurance protects your premises against fire, floods and so on; and stock insurance can ensure that you are protected if your stock is stolen or damaged. Insurance for small business is an absolute essential.