The wholesale and retail trade industry is made up of two parts: the wholesale trade sector, and the retail trade sector.
The wholesale trade sector comprises establishments engaged in wholesaling merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The wholesaling process is an intermediate step in the distribution of merchandise. Wholesalers are organized to sell or arrange the purchase or sale of (a) goods for resale (i.e., goods sold to other wholesalers or retailers), (b) capital or durable nonconsumer goods, and (c) raw and intermediate materials and supplies used in production. Wholesalers sell merchandise to other businesses and normally operate from a warehouse or office.

The retail trade sector comprises establishments engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise; retailers are, therefore, organized to sell merchandise in small quantities to the general public. This sector comprises two main types of retailers: store and nonstore retailers.

Companies in this sector sell a wide range of products to consumers and businesses, from food and apparel to hardware, household goods, and office supplies. Major companies include Costco, Kroger, and Walmart (all based in the US); as well as ALDI and Schwarz Gruppe (Germany); Carrefour (France); and Tesco (UK).

Global retail sales — including both in-store and online purchases — are projected to recover by 5.1% in 2021, according to eMarketer. Europe and North America are home to the many of the world”s largest retail companies, with Europe accounting for 88 of the 250 largest retailers in the world, according to Deloitte Touche Tohmatsu. However, North America is dominant in the top 10 with seven of these companies are US-based. US-based retailers are the most global and are aggressively expanding their operations abroad. The top market for international expansion is Asia, particularly China and Hong Kong.

The US retail industry includes about 1 million outlets with combined annual revenue of about $5 trillion. The industry includes auto dealers and internet and catalog retailers, but generally excludes food and drinking establishments, such as restaurants and bars.


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Quarterly Census of Employment and Wages data show that wholesale and retail trade make up a large part of the nation’s employment and business establishments. In the economy as a whole, wholesale trade represents about 4.4 percent of all employment and about 7.2 percent of all establishments; while retail trade is about 11.7 percent of all employment and about 12.9 percent of all establishments.

The annual average of the average weekly hours of nonsupervisory workers in wholesale trade was 37.8 in 2003; in retail trade, the corresponding average weekly hours number was 30.9 in the same year. For all private industry, the average was 33.7.

In wholesale trade, the average hourly earnings of nonsupervisory workers were $17.36 in 2003; in retail trade, nonsupervisory workers’ average hourly earnings were $11.90. The average earnings for production and nonsupervisory workers in all private industry were $15.35 in 2003.

According to the Current Population Survey, in 2003, the unemployment rate of persons most recently employed in wholesale and retail trade was 6.0 percent, the same as the overall unemployment rate.

Data from the Mass Layoff Statistics program show that in 2002:
in wholesale trade, there were 150 extended mass layoff events, resulting in 24,205 separations of workers from their jobs, and 19,476 initial claimants for unemployment insurance;
in retail trade, there were 412 extended mass layoff events, 135,679 separations, and 108,419 initial claimants.

Employment Projections data indicate that wholesale trade employment will increase 11.3 percent over the 2002 – 12 period. Retail trade employment will increase 13.8 percent. Total employment for all industry sectors is projected to grow 14.8 percent.

Labor productivity – defined as output per hour – grew by 5.6 percent in wholesale trade from 2001 to 2002, according to data from the Productivity and Costs program; the growth in output per hour in retail trade was 4.5 percent. There are separate measures of productivity for many industries at the 4-digit NAICS level of classification.

The Producer Price Index program publishes data for many industries in the retail trade sector.
In 2003, there were 191 fatal occupational injuries in wholesale trade, and 343 fatal occupational injuries in retail trade; there were 247,600 nonfatal injuries and illnesses in wholesale trade, while in retail trade there were 620,900 nonfatal injuries and illnesses, according to data from the Injuries, Illnesses, and Fatalities program. In wholesale trade, the nonfatal injuries and illnesses incidence rate was 4.7 per 100 full-time workers; in retail trade, the incidence rate was 5.3 per 100 full-time workers. The rate was 5.0 per 100 full-time workers in all private industry.

Typical jobs, such as those in sales, cashiering, and stocking, tend to require few special skills and pay low wages. Average hourly industry wages are moderately lower than the average for all US workers. As a result, employee turnover tends to be moderately higher than the average for all industries. In tough economic times, however, employees tend to stay put. The turnover rate for the retail sector fell below 50% for the first time in 2009 and declined steadily thru 2011, after which it began to climb again. Retailers rely heavily on part-time help because sales volume varies during the day and week, as well as seasonally.

Disruption in the retail sector, including bankruptcies and mass store closings, as well as new labor-saving technologies that eliminate workers from the retail equation, have dimmed prospects for job growth. US employment of retail sales workers is expected to show little or no change from 2021 to 2031.

In certain high-end retail segments, such as original art, some consumer electronics, and luxury autos, sales staff require specialized education or training. Expensive or complicated merchandise may involve a longer sales cycle and extensive customer relationship development. Companies specializing in high-end merchandise may use commissions as compensation to motivate sales staff.

The retail sector”s injury rate is about 35% higher than the average for all US workers, primarily due to lifting-related injuries from restocking jobs.


Businesses engaged in the wholesale trade have an intermediate place in the distribution chain, between producers and consumers of goods. They purchase and resell goods, such as the output of agriculture, mining, or manufacturing, generally without making any substantial changes to the goods. Some of the purchasers of the goods are retailers or other wholesalers. (The term jobbers is sometimes used for wholesalers who specifically serve retailers.) Other purchasers use goods such as industrial machinery or medical instruments to produce goods or provide services. Still other purchasers are processors who transform raw or semi-processed materials into goods of greater commercial value.

Wholesalers operate out of offices or warehouses. The warehouses are temporary storage facilities; unlike a retail store, they are not designed to display merchandise and do not encourage walk-in traffic. Wholesalers do not advertise to the general public. They contact their customers by telephone, sales workers, industry-specific advertising, or electronic media. They tend to create long-term relationships with purchasers, becoming regular suppliers with strong ties.

Wholesalers earn their revenue by charging buyers slightly more than they have paid sellers. Buyers are willing to pay this markup because wholesalers serve as a single point of contact where goods are available from multiple producers. For example, a food market needing eggs, milk, fruit, vegetables, and meat can buy from one wholesaler rather than identifying, negotiating prices, paying, and arranging shipping with the countless different farms that produce these agricultural goods. Wholesalers also relieve purchasers of the burden of warehousing goods that are not needed immediately.

In 2014, wholesalers made nearly $7.7 trillion in sales. These sales are divided into durable goods (approximately $3.4 trillion in sales) and nondurable goods (more than $4.3 trillion). These two sectors make up the largest shares of the industry, accounting for more than 2.9 million employees in durable goods and more than 2 million employees in nondurable goods. There is also a third sector, wholesale electronic markets and agents and brokers, that consists of businesses primarily engaged in bringing buyers and sellers together to make deals. This sector accounts for more than 895,000 employees. It functions with a smaller workforce than that of durable and nondurable goods wholesalers because it is engaged only in deal-making and therefore does not need workers for warehousing, trucking, and other functions of the two sectors that take possession of goods. Many of these establishments do not even rely primarily on human workers for deal-making, using electronic resources instead.

The Census Bureau issues monthly reports with two key figures on the status of the wholesale industry: sales and inventory. The ratio of inventory to sales (I/S), especially for durable goods, is often examined as a measure of the health of the economy because during recessions, those who buy from wholesalers curtail their purchases and wholesalers’ inventories pile up. Retailers generally place orders in advance of the shipping date, so it takes months or years for their purchase cutbacks to become evident as wholesalers’ excess inventory. As a result, the I/S ratio usually reaches its peak well after the recession has started, and it is considered a lagging indicator of economic health. For example, the I/S ratio for durable goods was 0.110 for 2007, the year the Great Recession began, and the ratio did not peak (at 0.123) until 2009.

Consumer spending typically accounts for some two-thirds of Gross Domestic Product. Therefore, GDP trends usually indicate the health of the retail sector. In addition, measures of Consumer Confidence help gauge consumer spending and savings rates, which also relate to the performance of retailers. In tough times, consumers, having less disposable income, limit their outlays to necessary day-to-day items. Conversely, during strong economic periods, consumers are more willing to make big-ticket purchases. Observers should also keep watch on the Consumer Price Index. Most retailers resist absorbing higher wholesale prices, and attempt to pass on any increases to their customers. At a certain point, however, consumers will push back against price hikes, and retailers’ sales and margins will then come under pressure.

Regional & International Issues

Global retail sales — including both in-store and online purchases — are projected to reach over $30 trillion by 2024, according to Statista. The US and China — the world”s two largest economies — dominate global retailing. China is expected to have an annual growth rate of 5.8% by 2023, according to S&P Global.

Europe is one of the countries that is home to many of the world”s largest retail companies, accounting for 88 of the 250 largest retailers in the world, according to Deloitte Touche Tohmatsu. E-commerce has been a major factor in the high retail growth among these companies, according to the 2020 Global Powers of Retailing report from Deloitte Touche Tohmatsu and STORES Media.

Major retailers headquartered outside the US include ALDI and Schwarz Gruppe (Germany); Carrefour (France); and Tesco (UK). In Asia, Aeon and convenience-store giant Seven & I Holdings are Japan”s leading retailers, while Suning Commerce Group leads in China. Walmart is the world”s largest retailer.

While US companies continue to dominate cross-border retail expansion, European retailers also are globally active as they search for growth beyond their mature home markets, according to CBRE”s How Global is the Business of Retail report. Nearly 40% of European retailers” combined revenue is generated from foreign operations, with France and Germany having the most global retail networks. Asia, particularly China and Hong Kong, is the top market for international expansion. As more retailers look to grow their businesses, cross-border retailer activity has accelerated. Italian, British, and French retailers are also expanding, focusing mainly on their own region.

Developing countries identified as ripe for retail expansion by consulting firm A.T. Kearney include Brazil, Chile, Uruguay, China, United Arab Emirates, Turkey, and Mongolia. South America fared well during the recession and is poised for more growth. Brazil and China in particular have been targets for luxury retailers. The luxury brands have found customers in the countries” newly wealthy, who have both the disposable income and the desire to sport recognizable luxury labels as symbols of their success.

Retailers that expand internationally face many challenges and may want to take into consideration social and cultural differences, regional suppliers, local talent pool, employment laws, political issues, currency exchange, and government regulation. Some retailers choose to partner with local retailers or sell their products through a local channel first to develop a better sense of local demand.

India has high potential for retailers, but foreign investors have been hampered by restrictions on ownership of certain businesses. Nevertheless, Walmart in 2018 acquired a majority stake in India”s leading online retailer Flipkart for $16 billion. India has relaxed retailing regulations for foreign single-brand retailers, who will be allowed to take 100% ownership of their stores in the country. Brands such as IKEA have already received approval to proceed as a single-brand retailer in the country. Major multi-brand retailers still face limits on investment in India, however.

In the US, climate, ethnic populations, and regional preferences can affect demand for certain types of merchandise. Economic growth and population growth drive demand for the sector overall. The states that have the most retail establishments were California, Texas, New York, Pennsylvania, and Florida.


There are many types of retailers. Consumers can afford to be choosy about where they shop, and retailers often distinguish their offerings through promotional activity. What sets one retailer apart from another is the quality, quantity, price, and selection of products available. Full-line department stores offer moderately priced products across several merchandise categories-for example, home appliances, electronics, cookware, linens, and apparel. Specialty department stores depend more on apparel, accessories, and cosmetics. Upscale specialty department stores, marketing top American and European fashion designer merchandise, charge a premium for their wares.

Aside from department stores, industry observers will find discounters. Discounters sell a broad selection of everyday items, such as stationary, sporting goods, toys, hardware, and over-the-counter pharmaceuticals. As growth opportunities diminished, a number of discounters began offering groceries to gain business. Another type of company is the wholesale club. Wholesale clubs have a lineup similar to that of discounters, but what sets them apart is they sell products from warehouse-like centers in bulk packages, under no-frills, self service terms, and charge a membership fee. Membership fees make up a large portion of operating profit.

Emerging technologies
Gone are the days when IT strategy was limited to architecture, modernization, and enterprise resource planning (ERP) systems. Investment options, technologies, and vendors number in the thousands, making it challenging to navigate and hone in on the next big thing.
Ultimately, retailers should figure out how to scale these solutions and embed them into their way of doing business. To leverage the true power of next-generation technologies, retailers should make some significant changes. They should be able to consistently mine the data they collect, transform their operations to deliver on the brand promise, and adapt to the future of work.

Major components of the retail sector include sellers of motor vehicles (17% of overall retail sales), drugs and supplements (9%), automotive fuels (7%), food dry goods (4%), and hardware tools and women”s apparel (3% each).

Retailers buy goods from suppliers or wholesalers and resell them for a profit. The industry includes national and regional chains, franchises, and independent retailers. Franchises allow independent operators to leverage a well-known brand name and benefit from the parent company”s purchasing and operational efficiencies. Because franchise owners pay royalties and bear much of the financial burden of opening a retail outlet, franchising is a cost-effective way for companies to expand.

The degree of specialization differentiates types of retailers. Department and general merchandise stores offer a wide range of items, while specialty retailers offer a broad selection within a product category. Numerous market segments can exist within a category. For example, clothing stores may focus on a particular gender (men, women, children); price tier (high, medium, low); style (traditional, contemporary, designer); or size (petite, tall, plus-size). At some discount retailers, such as dollar stores, merchandise can vary from week to week.

For brick-and-mortar retailers (those with physical stores), location is key to driving customer traffic. Typical sites include enclosed, outdoor, and strip malls, and stand-alone sites. Large retailers typically occupy desirable anchor spots in shopping malls. When selecting locations, retailers consider local demographics (population growth, income); traffic patterns; proximity to complementary and competitive retailers; and lifestyle. Retail format can vary: gigantic superstores offer massive selections, while kiosks allow companies to set up scaled-down versions of retail operations in small spaces. Pop-up stores allow both large and small retailers to take over vacant space for a limited period of time, as short as a one-day event, to take advantage of high traffic locations and build product buzz. Specialty retailers may also lease locations within larger retailers.

Selecting the appropriate merchandise is critical. Buyers may attend trade shows or search through product catalogs or supplier websites to review upcoming new products. Vendors may set up individual meetings with large retailers to review product offerings. Because most companies place orders many months in advance of product receipt, buyers must have thorough knowledge of market and consumer trends to make good buying decisions. Volume discounts are common and favor large retailers. In industries where suppliers are numerous, retailers often buy from distributors or wholesalers, which consolidate merchandise and simplify purchasing. Retailers with multiple stores often operate their own warehouses or distribution centers to receive and store merchandise from suppliers.

Effective supply chain management controls the flow of merchandise from suppliers to individual retail outlets and helps keep operating costs low. Many companies, particularly large retailers, have implemented sophisticated information systems that integrate data from manufacturers, distributors, warehouses, transporters, and retail outlets to track merchandise movement, monitor inventory levels, and ensure timely delivery of stock to stores. Inventory management helps companies identify slow- and fast-moving items and spot shrinkage due to damage, spoilage, or theft. Rapid inventory turnover is especially critical for retailers selling perishable items, such as fresh foods or dairy products. Retailers periodically discount or “mark down” items that aren”t selling to clear floor space for new merchandise.

When developing store layouts, retailers allocate space to basic merchandise, special promotions, checkout, and storage. Companies evaluate how efficiently they”re using space by monitoring sales per square foot. Most retailers group similar merchandise and may place complementary items adjacent to one another to generate incremental sales. Well-designed layouts and window displays attract and maximize store traffic. Store atmosphere can vary significantly, based on the type of shopping experience retailers want to deliver. For example, a high-end clothing store may feature lavish decor and expensive fixtures, while warehouse clubs offer little more than the basics. Checkout procedures can also vary: high volume retailers, such as grocery stores, typically have a centralized checkout area with multiple lanes to process as many transactions as possible. Department stores usually have checkout stations throughout the store. More retailers are offering self-checkout. Newer check-out options include mobile contactless payments using smartphones, a method already popular in other countries such as Japan.


IT systems generally support the most basic retail operations. Point-of-sale (POS) technology records sales transactions and processes payments. Fully integrated information systems link POS, inventory, forecasting, purchasing, and many backoffice functions, such as payroll, finance, and accounting. Electronic data interchange (EDI) allows retailers to place purchase orders electronically. Automatic replenishment systems help companies maintain desired inventory levels of key products. To access real-time sales data, large companies link individual store systems to corporate systems.

To better manage merchandise movement, many large retailers have implemented enterprise resource planning (ERP), which improves companies” visibility into the supply chain by connecting retailer systems with manufacturers, raw material suppliers, distributors, and transporters. Some companies participate in cooperative supply chain networks that share sales data and forecasts from retailers and supply and production data from raw material suppliers and manufacturers. Known as just-in-time (JIT) merchandising, coordinating demand and supply information allows supply chain participants (including retailers) to reduce inventory carry costs and minimize write-offs and discounting.

Universal product codes (UPC), implemented with bar codes on product packaging, provide standard identification for retail products and allow retailers to scan items electronically. In addition to bar codes, a growing number of retailers are using radio frequency identification (RFID) devices, which can transmit and store product information. While more expensive to implement than bar code processing, RFID gives companies greater tracking abilities since RFID codes can be unique to an individual item. In addition, RFID allows retailers to monitor product movement more efficiently because supply chain participants can scan merchandise by the pallet.

Advances in payment system technology have allowed many retailers to improve the checkout process. RFID allows retailers to offer contactless payment through special tags or cards. Some companies, such as grocery stores and home improvement chains, have added self-checkout lanes. Biometric identification allows customers to pay with a fingerprint and also can assist with tracking employees at key areas such as at the cash register and time clock. Handheld checkout devices and mobile contactless payments eliminate the need for dedicated stations. Due to rapid adoption of mobile wallets, such as Apple Pay and Google Wallet, mobile payments in the US are expected to grow at about 17% between 2018 and 2023, according to Forrester”s Data Mobile Payments Forecast. According to Statista, e-commerce sales are expected to account for about 20% of retails sales in 2021. Mobile commerce sales in India reached about 80% of all retail commerce sales in 2020 while China is expected to generate about $2.5 trillion in 2021, according to E-Marketer.

Data security has become one of the top issues facing the industry. Retailers are focused on closing security gaps and winning back the trust of consumers following a string of data breaches at some of the largest global chains. One of the most-talked about events was the holiday 2013 data theft at Target, which affected some 110 million customers who had personal and credit card data stolen. Home Depot was the target of a data breach in fall 2014. Many other retailers have also been targeted by hackers, who are getting more sophisticated in their approach. Better security is a top priority for retailers but will take time and resources to implement. October 2015 was the voluntary deadline for US retailers to upgrade to POS systems capable of processing EMV chip-and-PIN credit cards (aka smart cards), which contain an embedded security chip. (Some retailers, including gas stations, were granted extensions.) Liability for fraud is shifted from card issuers to retailers under the new system.

Retail companies continue to incorporate technological innovations such as Smart Technology through digital wallets to cater to consumer needs. As consumers heavily rely on smartphones on their day-to-day activities, companies are making payments easier for customers through digital wallets, wherein payments could be made through an app on their smartphones. Other companies are also making use of POS Financing or buy now pay later (BNPL) systems. The BNPL offers consumers options for flexible payments through making purchases without paying on the spot.


Competitive Landscape

The internet and increasing consumer connectivity are transforming the retail sector, with physical stores losing market share to online operators. Even segments once assumed to be relatively safe from online competition, such as grocery and auto parts retail, are facing increasing competition from e-tailers (especially Amazon) and reimagining their businesses in response. In 2020, total US e-commerce sales were estimated at $861.1 billion, a 44% increase annually, which is higher than the 15% increase in 2019, according to DigitalCommerce 360. E-commerce is expected to grow to 21.3% of US retail sales in 2020 and is expected to reach about $860 billion by 2022, according to DigitalCommerce360.

Worldwide retail e-commerce sales approached $3 trillion in 2018, accounting for more than 15% of total global retail sales, according to Internet Retailer. China, with more than 770 million internet users, is the primary growth driver and is projected to account for a whopping 55% of global retail e-commerce by the end of 2019. More than 35% of China”s retail sales occur online, by far the highest rate in the world. Other major markets for online retail include the US, the UK, South Korea, and Denmark.

To survive, traditional retail chains are scrambling to grow their own online businesses, right-size their store counts, and optimize supply chains to meet consumers” evolving expectations, which increasingly include free shipping, and next-day (or even same-day) delivery. Retailers large and small are focusing on providing compelling in-store experiences to draw foot traffic to stores and combat online rivals.

While large companies dominate some retail sectors (such as mass merchandisers and grocery stores), other US sectors (such as auto dealers and convenience stores) are fragmented. Many specialty retailers are single-store operations. Imports are a significant part of the US market for many retail categories, including apparel, shoes, computers, electronics, toys, and cut flowers. Due to low labor costs, manufacturers in Asian countries, such as China and India, play an important, and sometimes controversial, role in the supply chain for many retailers.

Competitive Advantages:

Omni-Channel Business Model – As consumers migrate online, retailers that successfully merge their in-store and digital operations to offer home delivery and in-store pickup for items ordered online will come out ahead, especially among younger, tech-savvy consumers.

Private-Label Brands – From apparel, to groceries, to auto parts, private-label brands (aka store brands) are increasingly popular with consumers. Private label dollar sales grew 5.8% in 2018, outpacing national brands by a wide margin, according to Information Resources Inc. Exclusive store brands typically are less expensive than national brands, more profitable for retailers, and increase customer loyalty. Some retailers, including Trader Joe”s, build their business around private brands.

Identifying Market Segments – Premium retailers have seen revenues rise 81% over the last five years, while price-based retailers have seen their revenues climb 37% over the same period. In contrast, balanced (or mid-priced) retailers managed only a 2% increase in sales and have been closing more stores than they open, according to Deloitte Insights.

Compelling In-Store Experience – To draw customers to stores in the Digital Age, chains are focusing on creating unique and compelling in-store experiences for shoppers that can”t be matched online. Toy stores create play areas for children, home improvement chains host in-store DIY workshops, while department stores stage fashion shows. Beauty retailer Sephora has thrived in part by offering hands-on beauty bars and in-store makeovers.

Supply Chain Efficiency – Rapidly changing consumer tastes and pressure to provide different delivery options to multiple destinations, is pressuring retailers to optimize their supply chains like never before. Retailers who can”t deliver products to customers how and when they want it quickly will lose sales to those who can.

Companies to Watch:

Walmart, the world”s largest retailer, is playing catch up with Amazon in online sales. The company operates more than 11,300 stores in 27 countries worldwide and e-commerce websites in 10 countries. Walmart is the #1 seller of groceries in the US and Mexico and a leading seller of food in Canada, Central and South America, Japan, and the UK. In 2018, Walmart acquired a controlling stake in India”s Flipkart for $16 billion and in 2013 it bought for $3.3 billion to transform its lagging digital operation and keep pace with rival Amazon.

Amazon, the world”s largest online retailer, pioneered retail e-commerce and continues to disrupt and drive innovation in the retail sector. The company captured 47% of US online sales in 2018, or about 5% of total US retail sales, according to Chain Store Age. Major categories for the online giant include electronics, home, and apparel, but in sells almost everything. The company is expanding in high-growth categories such as grocery and pharmacy. The company rocked the US grocery industry with its $13.7 billion purchase of Whole Foods Market in 2017.

Germany”s Schwarz Group — operator of the Lidl and Kaufland chains — is the leading seller of groceries in Central Europe and the third-largest retailer in the world. The company”s deep-discount Lidl grocery chain has upended Europe”s grocery industry and is poised to do the same in the US and beyond. Schwarz Group has operations in about 25 countries, and more than 60% of the company”s revenue comes from outside its home country.

French hypermarket operator Carrefour is the largest retailer in France and #2 in Europe (after Schwarz Group). Carrefour pioneered the hypermarket format more than 50 years ago but is a late arrival to the online retail party. The company is aggressively modernizing its vast network of some 12,300 stores across 30 countries and adopting an omni-channel approach to its business.

Alibaba is China”s top e-commerce firm and second in the online world behind Amazon. One of Asia”s most valuable companies, Alibaba is thriving as China”s 772 million internet users buy more and more online. While most of its revenue is generated from online sales, the company, like Amazon, has a cloud computing business.

One of the most straightforward ways retailers can expand sales is by opening new stores. It should be kept in mind, though, that new locations initially entail increased operating costs, some of which are fixed. Management must be careful not to open new stores in close proximity to existing ones. Doing so often results in sales cannibalization. Historical and planned store counts lend a view to a company’s expansion strategy. For instance, during a recession, well-heeled retailers may try to gain share by developing stores within competitors’ territories. Cash-strapped companies, on the other hand, may retrench, closing low-profit locations. The ability to build or lease new stores depends on a company’s cash balance, debt, and available credit. Leasing property requires less capital and permits quicker expansion than does construction, but long-term agreements can make it difficult to close underperforming stores when cash needs to be conserved.

New stores allow retailers to boost year-to-year sales matchups. A better measure of sales growth is comparable store sales, or comps, which only include locations in existence for at least one year. If comps rise, profits post greater gains, since they do so with little additional fixed costs. Should comps fall, the retailer may have to streamline its operations to maintain profit margins. One way a retailer can improve comparable store sales is to accurately anticipate what merchandise its target demographic will find the most desirable. This can prove especially difficult for companies that sell apparel, since consumers tend to be rather fickle with regard to their individual fashion tastes. An effective advertising campaign, appealing store layout, and attractive signage are also ways that companies can increase traffic and sales. Furthermore, retailers have had to develop attractive websites to compete against a growing number of online competitors.
To stay competitive, many retailers have shifted their investment strategies over the past 10-20 years. They’ve moved from growth via new stores to growth via big investments in all areas of the business—for example, launching new digital sales models, acquiring other businesses, or transforming their fulfillment processes. The cost to increase market share continues to grow, and many retailers find themselves in a precarious position as they try to figure out how to win battles on multiple fronts.

Where should retailers focus their strategies in 2019 to help move to the right side of the tipping point? Those who can synchronize their bets to create harmony across the organization may be best prepared for what is to come.

Loyalty: Emotional vs. transactional
Retailers should look beyond tiered programs built around traditional loyalty and benefits—points, dollars off, gifts, mailers—that at best elicit “transactional” loyalty. In an industry shifting toward experience-based models, retailers should look to make emotional connections, not just transactional ones.

With a genuine approach to driving consumer loyalty, retailers can optimize loyalty programs and make them even more valuable. Aligning the program with the values and the consumer conversation is imperative. Recently, loyalty programs have been expanding to focus on convenience (with home delivery or issue resolution) and experience (with exclusive events and limited-edition products).

Leadership lessons from China
To build a competitive advantage, retailers should consider looking at global cross-industry trends and build capabilities that can shape consumer experiences. For example, in China, consumers and the retail market have skipped a generation of technology: Next-gen technologies in the United States are yesterday’s technologies in China.
Retailers should be looking at the leaders in China to better understand the art of the possible in emergent areas such as online-to-offline, last-mile delivery, supply chain as a service, social commerce, and the implications of advanced public and private infrastructure.

Privacy by design
For retailers, consumer data is a must-have. For years, the industry struggled with how to create and use data. Now companies are on the hook for what data they have and what it says about individuals.
With regulation after regulation hitting the market, it’s time retailers had their privacy compliance road maps in place. But compliance can also be a catalyst for reinventing personalization and having honest conversations with consumers. Integrity matters in creating loyalty, especially when it comes to dealing with personal identity.

Supply chain as a differentiator
The supply chain is quickly becoming a way for retailers to offer consumers a differentiated service. But making the supply chain faster, more predictable, and cheaper is a difficult triad to manage simultaneously.

As retailers buckle down and prepare for potentially challenging times ahead, supply chain improvements can be a significant growth driver. But rather than just investing in trends like automation smart packaging in reaction to competitors, retailers should think about accumulating long-term competitive advantages through wider supply chain strategies.

Sales & Marketing

Customer demographics vary by retailer and can be different within a retail segment. For example, while women buy more clothing and beauty products, men are more likely to buy motorcycles and consumer electronics. People in Generation Y (those born between about 1980 and 1995), for example, often put a priority on spending on the latest technology, but may not be as interested in buying a new car. Demographic trends can affect retailer strategy and marketing.

Common marketing and promotional vehicles include TV, print, radio, newspaper advertising, the internet; direct mail; and in-store events. Social media outlets, such as Facebook, Pinterest, and Twitter, are used by many companies to interact with customers, offer special deals and gifts to connected customers, and spread the word about sales and discounts. Small retailers benefit from grassroots marketing, word-of-mouth, and local event sponsorship. Retailer brand names and brand name merchandise help attract a distinct clientèle. Loyalty programs, which reward frequent or large purchases, help retailers develop a customer base. Gift cards are a popular way to generate repeat visits. Retailers may hold special sales or events to drive store traffic, introduce items, or clear out excess merchandise. Discounts or markdowns are common in some categories, such as women”s apparel.

Large retailers rely on extensive consumer research to guide merchandising and pricing decisions. Syndicated data helps companies track competitors” performance and evaluate the effectiveness of marketing programs.

Customer service tends to be more important for expensive products (such as cars) or sophisticated products (electronics). Pricey or complicated products may have a longer selling cycle and require more personal attention from sales staff. For volume-driven retailers, such as grocery stores, customers are more likely to appreciate fast, efficient service. Many retailers measure customer service through surveys or follow-up phone calls.

The internet has greatly affected the retail operating model by expanding consumer access to goods and allowing consumers to compare prices more effectively. Online-only retailers can offer a vast selection of merchandise and enjoy low overhead due to the absence of physical stores. More retailers are aiming to offer customers a more seamless experience between online, mobile, and brick-and-mortar shopping, a strategy known as omnichannel retailing.

In some categories, online retailing has allowed suppliers to bypass traditional retail channels and reach consumers directly, although suppliers are often hesitant to sell directly for fear of losing product distribution. Some companies have drop ship agreements with suppliers, which allow the retailer to process online orders and the supplier to ship merchandise directly to customers.

Retailers may offer merchandise in multiple price tiers to appeal to a broad customer base. Brand name merchandise (including designer brands) is typically the most expensive. Large retailers may offer private-labels or store brands, which offer comparable quality but lower prices than brand names. Discount brands appeal to price-conscious customers. Companies may use promotional funding from manufacturers to discount retail prices.


Gross Margin
The difference between the prices retailers pay manufacturers for their goods and the prices they charge is called the markup. Cost of sales is what is paid to the manufacturers plus outlays for freight, store occupancy, employees, insurance, and utilities. Gross margin is a good measure of how well a company builds sales, sets the markup, and controls costs and expenses. Proper inventory management is vital. Too much inventory increases carrying costs and forces markdowns to improve turnover. (Turnover is the cost of sales divided by the average value of inventory over a given period.) Conversely, an overly lean inventory may translate into lost sales opportunities. Generally, the higher the turnover, the greater the flexibility in setting the markup; this improves the chances of maximizing profit.

Digital startups and funding
Digital startups are no longer playing in the shadow. They’re addressing chronic issues faced by the retail industry through innovative offerings, personalization, authentic engagement, differentiated fulfillment, and more. And the amount of capital flowing to retail tech startups is allowing these companies to realistically compete with established players.
To help offset the early gains made by these startups, traditional retailers will have to push ahead, blurring the lines between business development and corporate strategy. To acquire the next big idea, they might have to seek out guidance from specialists or through a scouting approach.

Many retailers have highly seasonal sales, and cash flow can be uneven. For example, toy retailers generate most sales and profits during the winter holidays, while children”s clothing retailers depend on back-to-school sales. The most important peak period, by far, is the winter holidays, which may generate up to a third of total annual sales for some retailers, followed by back-to-school, Mother”s Day, Valentine”s Day, and Easter. As a result, working capital requirements fluctuate during the year, increasing in mid-summer ahead of the fall merchandising season and again substantially prior to the holiday season when companies must carry significantly higher inventory levels to meet demand. Inventory represents a substantial investment, and risk, for retailers who must avoid out-of-stocks and also being saddled with excess inventory often disposed of through deep discounting.

Receivables for most retailers are low, since most consumers pay with cash or third-party credit cards. Most large retailers issue branded credit cards and may run their own credit card operations or outsource credit services to third parties. The ability to help consumers get credit is especially important for large purchases, such as cars or major electronics and appliances. Companies with variable seasonal inventory levels typically require short-term financing, often through commercial banks or suppliers. Inventory financing for trendier items, such as toys and apparel, can be risky. Inventory turnover is an important measure, but can vary significantly depending on retail segment: large grocery store inventories average about 40 days” sales, car dealer inventories can exceed 65 days” sales. Large projects, such as major store renovations or expansions, can require significant capital investment. The industry is capital-intensive: average annual revenue per worker in the US is about $310,000.

Most retailers have established merchandise return policies. Large retailers typically set aside allowances for returns, based on historical trends. Losses due to crime, such as theft, fraud, or robbery, can also be problematic. Many large retailers use security systems and electronic merchandise tags to deter and prevent crime.

The financial terms of franchise agreements typically include an initial payment, royalty payments based on a percentage of sales, and advertising fees. Most franchise agreements include minimum operating requirements and may require retailers to achieve specific annual sales volumes.


The Federal Trade Commission (FTC) and state governments generally enforce laws against deceptive sales and advertising practices, predatory pricing, and monopolistic behavior. Other government regulations may affect retailers depending on the type of merchandise sold. For example, because the Food and Drug Administration (FDA) regulates food, drug, and some beauty products, it can issue product recalls, which greatly affect grocery, drug, and health and beauty stores. The US Consumer Product Safety Commission (CPSC) administers and enforces several federal laws to protect the public against risks of injuries and death associated with consumer products and also may issue recalls.

Efforts by some states to raise their minimum wage above the federal minimum of $7.25 per hour will affect retailers in those states. In 2019, 18 US states will increase their minimum wage. California and New York have passed legislation to gradually raise the minimum wage to $15 per hour by 2022. Some big US cities and states like California, Illinois, and New York are passing laws mandating predictive employee scheduling to give shift workers advance notice of their schedules, as well as paid time off and sick leave.

Location Specific Industry Data :

Australia NSW Back Creek EDIT |COPY |DELETE
Australia WA Ridgewood EDIT |COPY |DELETE
Austria BURGENLAND Unterfahrenbach EDIT |COPY |DELETE
Australia VIC Congupna EDIT |COPY |DELETE
United States MI Glen Arbor EDIT |COPY |DELETE
Italy GE Pontedecimo EDIT |COPY |DELETE
Canada QC Montreal EDIT |COPY |DELETE
United Kingdom NA Carnock EDIT |COPY |DELETE
United States MA Ayer EDIT |COPY |DELETE
Germany NW Meerbusch Ossum-Bosinghoven EDIT |COPY |DELETE
United States PA West Chester EDIT |COPY |DELETE
Iceland NA Reykjavik EDIT |COPY |DELETE
Germany BW Donaueschingen EDIT |COPY |DELETE
Brazil MG Ribeirao Das Neves EDIT |COPY |DELETE
Germany RP Birgel EDIT |COPY |DELETE
Great Britain NA Deuxhill EDIT |COPY |DELETE
Netherlands ZH Rotterdam EDIT |COPY |DELETE

One Response to “RETAIL & WHOLESALE”

  1. cbrucemo Says:


    Voted 4 out of 5