A Comparative Analysis: Product versus Service Retailing; Wholesaling versus Retailing
Difference between Product and Service Retailing
Products are tangible in nature, whereas services are intangible in nature. Hence, various aspects such as quality, timeliness, behaviour, and knowledge of the service delivery professional, service customizations as per the requirement of the customer and use of technological support for improving key processes and enhancing the consumer experience, etc play a crucial role in determining the success of an organization involved in services.
Key Points of Comparison between Retail and Wholesale Business
Key Terminologies used in Retail Business
Consumption: Consumption involves the usage of product/services at a given point of time, but cannot be used for the purpose of resale.
Customer Satisfaction: Customer satisfaction means the extent to which a customer is satisfied with the decision of availing the product/service and getting back to the same retailer/business owner for buying the same product.
Consumerism: Integrated initiative on the part of the individuals, governments and various groups to safeguard the consumer rights and to protect them from the policies and regulations which result in infringement of the rights of the consumers.
Retail: Selling the products/services to the ultimate customers. The retailers keep different products in small quantities and sell them directly to the customers. The Retail business buys the products from the wholesalers at discounted prices, add their margins and sell to the customers.
Wholesale: Wholesale involves selling large quantities of products at a lesser price to the retailers/customers.
Logistics: Logistics deals with the commercial side of retail with focus effective planning, execution and control on procurement and movement of the products for achieving cost advantages and gaining a business edge through effective distribution and resource optimization.
Distribution: It is concerned with the product movement from the manufacturers to the ultimate consumer by following organized channel/intermediaries. The objective of maintaining a robust and a strong distribution channel is to ensure product reach to the maximum number of customers within shortest possible time along with cost advantages.
Inventory Shrinkage: This is a drastic reduction in the existing inventory position due to the occurrence of anti-social events like theft on the part of employees or customers. This may even occur due to certain errors in the process of merchandise management during the stage of receipt of the merchandise. The key focus of any retailer would be on controlling the inventory shrinkage for improving the overall business performance and controlling the costs.
Markdown: This means a reduction in the prices of the product.
Procurement: This involves sourcing the products/services from the vendors/suppliers by managing the end to end procurement cycle. The process includes preparing purchase orders, bargaining for the best deals from the suppliers/vendors, identifying new vendors, making follow-ups, preparing various kinds of documentation/coordination activities and releasing the payment to the suppliers.
Costs of Switching: This essentially implies the total cost which a customer may have to incur for switching from suppliers to suppliers or trying out new marketplaces.
Consumer Empowerment: In the present scenario, the consumers are more aware of their personal rights and can voice out their grievances before the concerned authorities regarding the non-performance of products. The main source of easy access to information for the consumers is the internet and digital technologies.
Authorship/Referencing - About the Author(s)
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