Distribution Channels - retailers

What is a distribution channel?

What is a distribution channel?

Most distribution channels involve retailers.  These are businesses that buy goods from manufacturers or other suppliers and sell them straight to consumers.  Retailers provide manufacturers and other sellers with some key services.

What are some common retailers?

• Independents

• Supermarkets

• Corner Stores

• Department Stores

• Chain Stores (Or multiples)

• Superstores / Hypermarket

• Kiosks / Street Vendors

• Market Traders

• Online Retailers

What is an independent?

Tend to be relatively small outlets, although there are exceptions. 

Examples of independants

Examples include:

• Newsagents

• General stores

• Greengrocers

• Delicatessens

• specialists - such as those selling bicycles, jewellery or toys. 

Who usually owns independants and where are they found?

Many are owned by sole traders and may be found in a variety of locations such as:

• High streets

• Shopping centres

• Malls

• In small villages or towns.

What is a supermarket?

Supermarkets are usually large stores selling up to 20 000 product lines including groceries, fresh food, greetings cards, clothes, electrical goods, books and household goods. 

Features of supermarkets

They are usually cheaper than independents selling the same sorts of products because they can afford to buy in bulk from manufacturers. 

Where can supermarkets be found?

Many supermarkets are located on the outskirts of towns and cities where land may be relatively cheap and is more readily available.  They usually offer free parking and meet the needs of consumers who prefer ’one-stop-shopping’.

What is a department store

These are large stores split into distinct selling departments, such as menswear, nightwear, cosmetics, food, gifts and children's clothing.  They usually aim to provide good quality products with high levels of customer service. 

How do department stores offer good quality service?

Sales staff may receive training in the different products sold in their particular department. 

Where can department stores be found?

Department stores are often found in city centres.  One example of a famous department store is Harrods of London, UK.

What is a chain store (or multiple)

where one owner opens multiple stores selling the same range of goods in many different locations.  Each store in the chain will look very much the same and be under the control of a central office. 

What do chain stores usually have standardised?

• Product range

• Pricing strategy

• Store fronts

• Store layout

• Staff uniform (if appropriate)

• Staff training, wages and conditions of work.

What do chain stores usually contain?

Chain stores may specialise in all sorts of product lines such as:

• Menswear

• Children's clothes

• Ladies clothes

• Shoes

• Food products

• Domestic appliances

• Sportswear

• Books

• Toiletries

How do chain stores keep their buying costs low?

They bulk buy direct from manufacturers so their cost of sales are low.  However, their ranges of goods are often limited and staff may be poorly motivated because they are not usually given incentives.

What is a superstore/hypermarket?

These are very large stores, usually located on the outskirts of towns and selling a wide range of goods under one roof.  They sometimes feel like giant warehouses when moving around inside. 

What do hypermarkets offer?

Hypermarkets offer an approach to shopping without any non-essential services.  Goods are not likely to be displayed attractively, there are likely to be fewer staff to help out and they tend to lack atmosphere.

What makes superstores and hypermarkets different compared to supermarkets.

Tthey are generally cheaper than supermarkets and have a wider product range.

What is a kiosk/street vendor

These are very small outlets selling a limited range of goods.  They may be found in airports at bus and train stations, in streets and the cinema, for example. 

What do kiosk/street vendors normally sell?

• Fast food

• Confectionery

• Newspapers

• Possibly a limited range of clothes

Other features of kiosk/street vendors

They generally operate with low set-up costs and minimal overheads, but this depends on the location (for example, renting a location inside a major airport would actually be quite expensive).

What is a market trader?

These are usually small time businesses selling goods from market stalls. They are common in many parts of the world. They have low overheads and are often cheaper than other retailers.  Some market traders move from one market to another and set up a stall each time they relocate.  However, in other markets, such as souks, market traders may sell their goods from the same permanently located stall.

What is an online retailer?

Businesses, such as Amazon, that buy goods from manufacturers and sell them online to customers.