Retail has existed since early human history, evolving into what we know it as now. Now, there are over 1 million retail companies in the U.S. alone, and earnings in the business have grown about 4 percent annually since 2010. And though vacant malls and bankruptcies litter headlines, there are 5.2 new store openings for every one that closes its doors.
Below, let’s look at the definition of retail, how it’s evolved over centuries, and in which the future of retail is led.
Retail is when there is an exchange of goods for cash between a company and a consumer. A consumer pays cash in the kind of money, credit/debit card, check, or alternative payment method, while the company provides a product(s) in return.
Based on Merriam-Webster, retail is a noun, verb, and adjective (and adverb but we will skip that):
Retail is the selling of products or goods in small quantities to ultimate customers, and the business of these selling. To retail would be to market in small quantities directly to the ultimate customer. One thing with retail qualities is of, relating to, or participated in the selling of commodities at retailstores.
A merchant is the business that offers the goods to the client who pays for the merchandise. Sometimes, retailers produce their own products, but some utilize third-party manufacturers and providers for their inventory.
Normally, the consumer who buys the product from a merchant is also the end user. But, there are also instances when they are buying for someone else — presents, as an example.
While traditionally, retail was in a brick-and-mortar shop, you will find a great deal of retail stations today.
Retail vs. wholesale
While retail is a transport of goods from the merchant to the consumer, or end user, wholesale is typically a business-to-business (B2B) transaction.
Wholesalers sell mass quantities of merchandise, as opposed to one unit. Pricing for these bulk orders typically work out to a discounted per-unit speed so retailers can add markup and market it directly to customers.
Note: Stores like Sam’s Club and Costco offer wholesale products available directly to consumers. We’ll get into that a bit more when we talk about the kinds of retail.
The history of retail
Retail has technically been in existence since early human history, where people exchanged and bartered animals, produce, and other products. Then, goods were money themselves. The ancient Mesopotamians are credited with inventing the first kind of cash, the shekel, whose value has been based off weight.
Throughout the Medieval times, merchants credited the first variant of their credit card. They used notches on a wooden pole to keep track of accounts receivable and accounts payable. The system continued until 1826.
From the 7th century Tang Dynasty, China introduced the first paper money. The currency remained in circulation for 200 years, until inflation from overproduction and a copper shortage forced merchants to use money backed by gold.
Currency aside, retail has blossomed from a basic system of artisan merchants to a worldwide network of brands of all sizes. Let us look at a Complete timeline:
1658. Boston established the first markets in 1658. Merchants would exhibit merchandise rather than in the spaces under their houses, as they did formerly. The trend caught on and artisans of all types started selling in markets.
1670. The Hudson’s Bay Company trading post was established in Canada. Here, frontier settlers could trade furs with Native Americans. They expanded to a North America-wide performance that did business well into the twentieth century.
1818. Fast forward to April 7, 1818, when Henry Sands Brooks opened H. & D.H. Brooks & Co., the first Brooks Brothers store, in Nyc. What began as a”little family haberdasher” has changed into a global brand that still exists today.
1858. Rowland H. Macy based what we know now as Macy’s. In 1858, he started R.H. Macy & Co. dry goods store in nyc, earning $11.06 on their opening day.
1872. America has its first mail-order retailer. Montgomery Ward founded Montgomery Ward & Co. to sell products to farmers in rural areas who could not access retailers in towns.
1879. 1879 watched James Ritty’s invention of the cash register — the”Incorruptible Cashier.” A”seller of pure whiskies, fine wines and cigars,” Ritty was a prosperous saloon owner with a significant problem: internal theft. He later sold the patent, which changed hands and contributed to the establishment of this National Cash Register (NCR).
1879. That same year, Frank W. Woolworth began his five-cent shops with cheap merchandise.
1883. The U.S. has its first supermarket, Kroger. In 1883, Barney Kroger saved up a whole $372 to open a food shop in downtown Cincinnati.
1886. Richard W. Sears founds his eponymous company, the Sears Roebuck Catalog, selling watches to other representatives.
1900. With increasing tea prices, George Huntington Hartford and George Gilman began importing it directly themselves. They offered it via their Great Atlantic & Pacific Tea Company in a 70% lower cost. The merchant later rebranded as A&P grocery store, the first key chain store organization from the U.S. with 200 shops by 1900.
1902. On April 14, 1902, James Cash Penney opened the initial J. C. Penney store in Kemmerer, Wyoming. The merchant grew to 676 places by 1930 and works 850 stores now.
1906. NCR worker and inventor Charles F. Kettering assembles the initial cash register with an electric engine. This sped up the checkout process and helped retailers maintain better transaction records. It became commonplace in retail stores by the mid 1900s.
1990. After arriving in London from Chicago, Harry Gordon Selfridge opened the first Selfridges retail shop. They opened their doors on March 15, 1909 and the shop is one of London’s most well-known retailers now.
1911. The self-service stores began opening. There were all types of self-service shops, from cloth and fabrics to grocery.
1916. Clarence Saunders opened his Piggly Wiggly store, where he revolutionized the retail experience with shopping baskets, spacious shelves, self-evident, and intentional shop layouts.
1920s. Credit cards are introduced from the U.S. for the first time. Oil companies and hotel chains issued credit cards to clients to use at their shops.
1927. Convenience stores are introduced to the American people: Southland Ice Company opened its doors in Dallas, Texas. The business later rebranded as 7-Eleven.
1929. The first business census concluded the American retail sector reach $48 billion in annual retail earnings. Chain stores commanded just over 22 percent of that number.
1929–1934. Retail sales declined during the Great Depression. The National Recovery Act helped reduce provider prices so retailers can increase profit margins during the economic recession.
1931. The country’s first shopping mall, Highland Park Village, opened in Texas.
1940. Sylvan Goldman devised the shopping cart.
1946. Southland Ice Company shifted their shop hours from 7 a.m. to 11 p.m. and changes their name consequently, to 7-Eleven. The convenience store retailer also expanded to the East Coast in the late 1950s. Today, there are shops all over the world, many of which are available 24/7.
1949. The Vitamix blender infomercial is the first one to grace televisions throughout the nation.
1950. The Diners’ Club, Inc. became the first worldwide credit card for customers to use at multiple companies.
1950s. From the late’50s, the distribution chain switched their focus on transport management, using shipping containers on ships, trains, and trucks to move product.
1950s. Though the first shopping mall started about two decades before, they did not become mainstream until the 1950s. This was due to favorable tax legislation, a surge in suburban dwelling, and the building of the interstate highway system.
1962. On July 2, 1962, Sam Walton opened the initial Walmart in Rogers, Arkansas.
1970s. The conventional cash register evolved into the initial form of the modern-day point-of-sale system.
1974. NCR made the initial UPC barcode scanner. It had been used at Marsh’s supermarket in Troy, Ohio to scan a bunch of Wrigley’s Juicy Fruit chewing gum on Jun 26, 1974.
1978. Bernie Marcus and Arthur Blank opened the first two Home Depot stores in Atlanta, Georgia.
1979. Michael Aldrich devised electronic shopping, linking a tv to a computer via phone line. The computer processed credit card transactions.
1982. Boston Computer Exchange became the first official ecommerce website, an internet marketplace for used computers and related electronics.
1986. Mary T. Schmich references the term “retail therapy” in one of its first uses in a Chicago Tribune article.
1980s. Though earlier iterations of this”vacation” were savory, retailers worked to rebrand the vacation into what we know it as now. It captured on from the late 1980s and is one of retail’s biggest revenue drivers.
1990s. Discount shops became the most popular and successful retailers in the U.S.
1994. Jeff Bezos launched Amazon as an internet market for books on July 5, 1994.
1994. The first-ever ecommerce transaction — with encryption — happened on August 11, 1994. Funny enough, someone sold Sting’s Ten Summoner’s Tales album to a friend. The $12.48 (plus shipping) sale happened in Philadelphia.
1995. Online marketplace eBay launched on September 3, 1995. On it, consumers could bid for things online.
1997. Total retail sales in the U.S. amounted to $2.5 trillion — fifty times the sum in the first census in 1929.
1999. Target surfaced its first designer partnership with architect Michael Graves.
2000. Walmart became the world’s biggest retailer and private company. It hit $200 million in yearly sales.
2001. Apple opened its first brick-and-mortar shops in Tyson, Virginia (near Washington D.C.) and in Glendale, California. The first started on May 15, 2001, and the latter only four days later.
2005. Etsy, an internet market for creatives, artists, and manufacturers, went live on June 18, 2005.
2010. Software programmer Vaughan Rowsell launched Vend POS.
2010. American Express celebrated the first official Small Business Saturday at November 2010, jumping on the store local movement.
2014–2015. Over half of U.K. retailers believed cellular point-of-sale (mPOS) the most crucial in-store tech in 2014. In 2015, the IHL Group discovered that North America mPOS software installs increased 41% year to year.
2017. There were over 1 million retail companies from the U.S., an industry which used around 29 million people. Revenue exceeded $5 trillion.
2018. Well-known retailers such as Toys R Us, Nine West, and Claire’s filed for bankruptcy at sky-high Prices.
Kinds of retail shops
Though retail began mainly as brick-and-mortar, it is far more diverse today. Kinds of retail shops include:
Big box stores: Big box retailers occupy big shops — believe IKEA, Lowe’s, and Target kinds of spaces.
Boutiques: “Boutique” is the French word for”store” and refers to small retail stores that typically concentrate on a niche or unique, luxury jewelry and clothes.
Brick-and-mortar shops: Physical, permanent storefronts where merchants sell and display their wares.
Convenience shops : These retailers are stocked with basic food items and other essentials. They generally have early/late hours and are often connected to a gas station. Special K and Wawa are great examples of convenience stores.
Department stores: Department stores are all round shops which provide a range of merchandise, including but not limited to clothes, home products, appliances, and much more. Examples include Kohl’s and Nordstrom.
Discount shops : These shops provide low-price consumer products, below the standard retail price. Dollar Tree and Five Below are great examples of discount shops.
Ecommerce shops : Online shops make it possible for consumers to buy products online, without visiting a physical site. Fulfillment can happen via transport, in-store pickup, or even shipping.
Event revenue : Event earnings include farmers markets, festivals, and any other temporary selling opportunity in conjunction with an event.
Franchise: A franchisor permits their new and operational know-how to franchisees. Franchisees benefit from brand recognition, franchisor industry expertise, and established procedures, while they need to abide by their standards and pay licensing fees. This happens frequently with fast food companies like McDonald’s or Burger King.
Grocery shops / supermarkets: These retailers sell food and other essential items like cleaning goods and greeting cards. Aldi and Food Lion are grocery shops.
Indie retailers: Independent retailers are liable for their own company entirely. They do not need to worry about abiding by franchisor or brand standards.
Mail order: This is when a merchant sends published catalog via mail to customers’ homes. Consumers can then fill out form and mail in their order, or place an order over the telephone. Items are usually shipped.
Mobile: Mobile retail may happen on apps or through mobile web browsing. It is the fastest-growing retail industry.
Local stores : Mom-and-pop stores have made a revival recently. The locally owned, independent retailers have profited in the store local movement.
Pop-up stores : Pop-ups have gotten retail mainstays, temporary retail activations which happen within shops, at dedicated pop-up places, vehicles, and other unique places. You may also hear this referenced as flash retailing.
Buying malls: A shopping mall is a retail centre with a group of shops, restaurants, or entertainment choices. Shopping malls have been on the decrease.
Thrift shops : Second-hand stores sell items which have been used. Occasionally these operate as nonprofits and off gifts, others are going to purchase used items from individuals and resell them for a profit.
Vending machines: While vending machines make you think of snacks and refreshments, retailers are revolutionizing vending machines. You can purchase electronic equipment in airport terminals or a new car from Carvana‘s vending machines.
Warehouse shops : These retailers sell goods in bulk at discounted prices. Many direct-to-consumer wholesale shops operate on a membership fee, such as BJ’s, Sam’s Club, and Costco.
Note that every merchant can fall into multiple”types” of retail — there’s overlap. By way of instance, a boutique might also be a second hand store, selling just luxury or collectible vintage items. Likewise, an ecommerce shop may also have a pop-up store or take part in event sales for in-person advertising opportunities.
How to become a successful merchant
In contemporary retail, it requires more than offering the ideal price point to be prosperous in retail. Today’s consumers are about connecting with brands that share their values and give an remarkable customer experience. The most successful brands can also be data-driven.
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