Classification of different Retail Institutions


The term retail institution refers to the basic format or structure of a business. Given below is a classification.


An independent retailer owns only one retail unit.


A chain retailer operates multiple outlets (store units) under common ownership; it usually engages in some level of centralized (or coordinated) purchasing and decision-making.


It involves a contractual agreement between a franchisor and a retail franchisee, which allows the franchisee to conduct a given form of business under an established name and according to a given pattern of business. Typically, the franchisee pays an initial fee and a monthly percentage of gross sales in exchange for the exclusive rights to sell goods and services in a specified area.

Convenience Store

A convenience store is usually a retailer that is well located, open long hours, and carries a moderate number of items. It’s a small store with average prices, goods and services.

Department Store

A Department store is a large retail unit with an extensive assortment of goods and services that is organized into separate departments for purposes of buying, promotion, customer service and control.


Conventional Supermarket

A conventional supermarket is a departmentalized food store with a wide range of food and related products; sales of general merchandise are rather limited.

Specialty Store

A specialty store concentrates on selling goods or service line, such as apparel and accessories, toys, furniture. In contrast to a mass marketing approach, specialty stores usually carry a narrow assortment in their chosen category tailoring to selective market segments.

Discount Store

It is a type of department store with following features:

  • High-volume, low-cost, fast-turnover outlet.
  • Centralized checkout service.
  • Lower operating costs.
  • Clear customer focus: shoppers looking for good value.

Factory outlet

A factory outlet is a manufacturer-owned store selling manufacturer closeouts, discontinued merchandise, irregulars, cancelled orders, and, sometimes, in-season, first quality merchandise. Factory outlets can be profitable despite prices up to 60 percent less than customary retail prices due to low operating costs. At factory outlets, manufacturers can decide on store visibility, set promotion policies, etc. E.g. .Levi’s Factory Outlet Store at Marine Lines, Mumbai. Reebok, Nike & Adidas Stores on the Delhi-Haryana border.

Direct Marketing

It is a form of retailing in which a customer is exposed to a good or service through a non-personal medium (e.g. Direct mail, T.V., radio, magazines, or internet.). It has the following features:

  • Low costs and inventories
  • More geographical coverage.
  • Convenience for customers.
  • No prior to purchase examination of goods.

Direct selling

Direct selling includes both personal contacts with consumers in their homes as also phone solicitations. The strategy mix for direct selling emphasizes convenience in shopping and a personal touch. Besides, for the retailer, direct selling has lower overhead costs.

Vending Machines

A vending machine is a retailing format involving the coin-or card-operated dispensing of goods and services. It eliminates the use of sales personnel and allows for 24-hour sales.

World Wide Web

Is another aspect of modern retailing. I shall touch upon this in our part on role of I.T. in retailing.

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