In this comprehensive guide, we’ll help you to define retail and detail the three main types of retailing. We will also outline how various retailers can benefit from using retail software and what can be classified as a retail store.

What is retail?

Retail. You’ve probably heard of it, but what exactly is it?

In its broadest form, retail refers to the direct sale of goods or services to shoppers and consumers. This can either be for use or consumption. For example, furniture or electronic goods can be sold for use. Food and beverage items can be sold for consumption.

Retail is all about selling. These transactions can take place through a variety of sales channels, via online stores, shops (known as brick-and-mortar storefronts) and mobile.

What qualifies as a retail transaction?

Typically, retail payments and transactions are those that take place between consumers, public authorities and businesses. Is the buyer purchasing an item from you? Are they buying to use and not to resell? If so, then you will have completed a retail transaction.

A good indicator is also the size of purchases or orders. Typically, retail transactions are much smaller individual sales than wholesale or manufacturing transactions which are typically done less often and in bulk.

A retail transaction can also include salary and tax payments made by the businesses.

What is retail work?

Retail work is an employed position that primarily sees staff selling products to potential customers. Customer-facing roles, like those in hospitality and retail, often require employees to be outgoing, friendly and have a knack for selling..

How many people does the retail sector employ?

As we mentioned in our ‘what is retail section’, the term itself is broad and the number of people employed in the retail industry is just as vast. In the UK alone, the retail industry is estimated to employ over 3 million people. It also consists of over 300,000 separate businesses.

What does retailing mean?

Retailing is the distribution process of receiving goods from a wholesaler and selling them to customers for them to use themselves. Traditionally, retailing is purchasing goods from the manufacturer and then selling them to the customer. The easiest way to define retailing is to think of it as the middleman. It sits neatly between the manufacturer and the end-user in the supply chain.

The retail supply chain

What is the retail supply chain? In general, the retail supply chain is all the processes involved in producing and distributing a product to consumers. Each retail business’ supply chain will be different. However, almost all retail supply chains include manufacturing, retailer purchasing and consumer selling.

How does the retail supply chain work

Here is what a typical retail supply chain may look like:

1- A manufacturer uses raw materials to produce goods.2- A wholesaler purchases the goods from the manufacturer.
3 - A retailer purchases the goods from the manufacturer. This is usually in large quantities.
4 - Retailers (both large and small businesses) sell goods in smaller quantities for consumers to use.
5 - Consumers purchase from retailers for personal use.

In short, the retail supply chain is vital for keeping the retail industry alive. Each part of the retail supply chain - from manufacturing the product to purchasing the goods - is essential.

What are the three types of retailing?

When it comes to retailing, there are three main categories. These are brick-and-mortar retailing, online retailing and mobile retailing.

We’ve outlined each type of retailing below:

  • Brick-and-mortar retailing: These are usually physical stores and pop-ups on the high street. Customers can visit in person and shop for goods.
  • Mobile retailing: These are usually ways for customers to buy and sell goods via mobile devices and mobile apps.
  • Online retailing: These are usually ways to buy and sell goods via websites, online platforms and marketplaces.

Retailers and their services

In this section of our What Is Retail Guide, we will define what a retailer is, outline the four main types of retailer and detail the types of services they supply.

What is a retailer?

If retailing is the act of receiving goods from wholesalers and selling them to customers, then a retailer is the individual or the business that completes this act.

There are lots of different types of retailers and retail businesses. Each sells different products, such as laptops, dinnerware and clothing items. However, despite selling different goods, all businesses that sell directly to customers are considered to be retailers.

What are the main categories of retailers?

According to Shopify, most retailers fit into one of the below four categories::

  • Food: Perishable products such as produce and baked goods.
  • Art: Both ‘high-brow’ and ‘low-brow’ art forms. For example, fine art and literature.
  • Hardlines: Think technology and furniture. Hardlines are items that are built to last a long time.
  • Soft goods: The opposite of Hardlines. Soft goods are items such as make-up and clothing.

What are the different types of retail stores?

You will find various retail stores within the four main categories of retailers. The range of retail business types is forever changing, but some examples you may already be familiar with include:

Online stores or E-tailers

An online store or an E-tailer is a website or an app where you can purchase goods from a retailer. Products are sold over the internet and are usually stored in warehouses. The warehouse then sends the item to your given address. Online stores don’t have traditional brick-and-mortar stores. Examples of online stores include Etsy and Amazon.


A supermarket may actually be the retail store you are most familiar with. They usually specialise in selling FMCG and home decor products. For supermarkets, marketing displays are key for retailing. Some examples of supermarkets in the UK are Tesco, Waitrose and Lidl.

Discount stores

A discount store sells products at a lower rate than the recommended retail price. Much like department stores, they operate via a complex business model. This is because discount stores usually sell a huge collection of goods. These could be perishable food items, gardening gear and home decor. Some examples of discount stores in the UK are Home Bargains and Primark.

Department stores

Department stores sell a wide range of products directly to customers. These products can include ready-to-wear apparel, electrical kitchen appliances and toiletries. This type of retail store is complex and often sells products at varying price points. Some examples of department stores in the UK are; John Lewis, Selfridges and House of Fraser.

Speciality stores

When you ask the question, ‘what is a retailer?’ One of the first examples to appear in search is speciality stores. These are retail establishments that stock one or two core product categories. Some examples of specialty stores in the UK are; JD Sports and Uniqlo.

Pop-Up Stores

Also known as temporary retail, pop-up stores are usually used to test new products and promote a new range. These are set up in areas that are high in foot traffic.

How can retailers benefit from using retail software?

Are you using dedicated retail software to elevate your business? If not, then perhaps it is time to begin. There are so many benefits that come with using retail software including:

Improved inventory management:

The days of tallying up your products in the stock room are over. Instead, store all your inventory details via cloud-based retail software. You can even tap into data such as sales history and trends.


Utilising dedicated retail software will help reduce the risk of human error. That means more time working on your dream business and spending less time correcting mistakes.

Customer satisfaction

Dedicated retail software will speed up checkout processes. A customer who experiences a positive end to their purchasing journey is much more likely to return. Using retail software also has the added benefit of saving customer information and potentially adding them to email marketing lists.

Hopefully, you’ll now be fully fluent in the world of retail. So next time someone asks you, ‘what is retail?’ you will have all of the answers.

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