Before we discuss about the example of modern retail business, there are several types of retail businesses such as: traditional retail, modern or non-traditional retail. And you must understand both types to distinguish between the notion of Traditional Retail and Non-Traditional or Modern Retail. Before seeing the difference, it is important to understand what exactly these two types of businesses are?
Traditional Retail Business consists of ordinary trading partners such as:
- Direct Dealer: The company sells directly to them and in turn they directly sell to the end consumer or user. The number of stores owned by them can vary from 1 to 10 at a particular location / city. Their presence is limited to certain geographies within a particular city or region. such as clarification of retail business.
- Distributor: The company sells directly to them and in turn serves a small retail store (known as a sub-dealer) in the area designated by the company. Sub-dealers then sell to the final consumer.
- Big Traders: This one is an unorganized channel. Either larger direct companies or dealers will sell their products in bulk and in turn sell to smaller retailers relatively at a lower cost than the distributors. They run like parallel channels for distribution and can sometimes cause market imbalances.
- Trade Stores: This is a company-owned or franchised retail outlet that sells only one company's products. They act as usual places to display the entire range of products sold by companies such as the type of retail ownership.
While Non-Traditional or Modern Retail refers to all other formats of retail stores such as Hypermarket, Department Stores, Discount Stores, Electrical stores, Specialty Stores, Online and Direct Selling
Now let's try to distinguish two specific parameters as mentioned below:
- Attendance: Traditional retailers typically have limited geographic presence eg within a certain city or region while Non-Traditionalal or Modern Retail business has a national presence.
- Services: Traditional channels have a high engagement with consumers during the sale. It can even arrive at a free home delivery rate of a small value item purchased. But consumer expectations are low in terms of service standards at the time of sale. On the other hand in Modern Retail there is usually a low involvement with consumers on the sales floor. Usually consumers are free to roam and choose for themselves what they want to buy. Not much personal attention is given. At the same time high consumer expectations.
- Shipping: There is no strict norm for the delivery of goods from the company to retailers where as in the Modern Retail there is a defined delivery norm such as delivery schedule, barcode, exact delivery before PO expiration etc.
- Volume: Traditional trades usually sell / buy volumes that are consistent with increases during the festival / season while on the other hand modern trading sells / buys higher volumes throughout the year due to regular promotions and expansions.
- Margin: Traditional trading demands higher margins while retention is low. Modern Trade however demands a high margin and there is also a fixed percentage of retention.
- Merchandise: High visibility is ensured in traditional trades with a slightly messy look. Though modern commerce has an innovative merchandise.
- Promotion: Promotion in traditional channels is usually seasonal while modern retail channels believe in monthly and daily promotions on products.
- Staff training: There is a moderate focus on training staff in traditional trade while modern trade ensures a high level of staff training.
- Credit terms: Companies usually provide a lower credit period to traditional trading while modern trade enjoys higher limits and credit periods.
- Relationships: Traditional trades are usually managed on personal relationships with salespeople with owners while modern trading relationships with firms are professional and legal.
Examples of Modern Retailers
Most retailers recognize the importance of combining the best of digital technology and physical stores to profitably create a smooth and consistent customer experience across channels. Their most valuable customers engage with them across all channels: store, mobile, social, and online.
Currently, there are so many modern retail formats / markets are:
1. Supermarket
2. Minimarket
3. Hypermarket
4. Specialty store / convinience store
5. Department Store
An example of a modern retail business is illustrated in a simple way in which the market or retail is where merchants sell and market goods in the form of food products and non-food products in the form of processed, processed or diverse daily necessities that usually come with self-service formats and will use the system of supermarkets or large markets that consumers must immediately provide payment at the checkout they provide.
While people use the terms "mini market" and "supermarket" alternately to refer to retail food stores, industry observers offer more specific guides on different types of suppliers. "Hypermarkets" are on the edge of this larger spectrum and carry a wide variety of food and general merchandise. The striking differences of the 4 Modern retailers are:
1. Size or Scale
What distinguishes small shops, supermarkets and hypermarkets as entities is the relative size and catch. The grocery store or mini market is a smaller competitor, with less annual income than supermarket income, while the supermarket generates more than the mini market. Instead of hypermarkets income would be greater than both.
2. Products Offered
Although food products seem to be one of the common products that connect mini markets, supermarkets and hypermarkets, the mini market carries almost exclusively and easily damaged goods while the supermarket combines the offer with additional departments such as bakeries, delis and pharmacies as non strore retailing.
3. Store Format
Wholesale stores, supermarkets and their larger competitors use a number of different traditional and nontraditional formats such as the advantages and disadvantages of retail businesses.
4. Trends
The data show that temporary reviewers have reduced the number of trips people make to supermarkets, people are buying more per visit because they do not require substantial spending. Where hypermarkets are concerned, legislation that limits their expansion has led to restructuring in the sector, including streamlining and growing online click-and-pick concept, where customers can place ordering online for pickup later. The high growth in minimarket format, marked by the increasingly tight competition in the expansion or addition of the number of outlets of two major players in it namely Indomart and Alfamart.
Such information is related to the types and examples of modern retail businesses that we can discuss in this article. The three types of modern retailers are growing and having both positive and negative values. May be useful.
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