Every quarter economists track how the retail industry is performing, by tracking retail sales, and take it into account while making decisions about the economy. This is because retail as an industry and retail stores play an important role in our lives, at many different levels, and not only as a channel for sales.
With a rising amount of retail stores closing in the last few years, and the industry facing big changes, some people might ask: Is retail really important?
In this article, we will list different reasons why retail industry is important for all of us.
1. Retail Provides an Important Service to The Public
Retail stores play a very important role in connecting manufactures of goods to the end consumer. They create a convenient environment for the customer to compare and choose between different manufacturers and choose the best price and offering they need.
This also creates a healthy competitive environment where manufacturers will try their best to create a good quality product, at the best possible price, in order to win the sale at the store, in the presence of other competing brands.
In the absence of a retailer, customers would have to buy directly from the factory outlet, where all the goods are of the same brand. Or they would have to drive to multiple outlets to shop multiple brands.
2. Retail is The Biggest Private Employer
One of the main reasons retail is so important for the economy, is that it is the biggest private employer in the country (U.S.), supporting 42 million jobs.
From cashiers, to sales associates, security, visual merchandisers, stock room operators, and temporary jobs during holidays, retail provides a lot of opportunities for people to start their careers.
In fact , nearly 32% of first jobs have been in retail, with average age as low as 16 years.
Even if they don’t plan to stay in the industry for long, a lot of people find it easy to get a retail job when they really need something to just get by.
Some people, like me, just get hooked forever and get used to the fast pace and excitement this industry provides, and never leave it for anything else.
Actually, due to the temporary intent of many retail workers, those who stick around and acquire the right skills tend to grow fast in this industry. It is very hard to find skilled retail managers, so people who have what it takes, tend to be in high demand, with salaries shooting up to six figures recently for some chains.
3. Customers Trust Brands With Physical Presence
Even for businesses that sell online, physical retail presence is still important to build trust with customers.
A lot of pure play online retailers realized this and started having a physical retail presence, even in the form of pop-up shops.
Many customers still want to touch and feel the product before they buy, or try it on to make sure it fits. Other customers prefer ordering it online and picking it at the store location on the way home.
Another point worth noting here, is that even with the rise of online sales, physical shops still drive the majority of goods out of the doors. This is especially important for manufacturers, as they need to create and sell goods in bulk for their business to be economical. Nothing clears more goods in terms of quantities like physical stores.
At the moment physical retail stores contribute more than 80% of total retail sales.
4. Retail Therapy is Real
People do not only visit malls out of necessity to buy a product they need. Many times, they go there just for the act of shopping.
Research has found that retail therapy is real, and that many customers strategically use shopping to uplift their mood.
There is something good about browsing through retail stores, trying on different clothes and outfits, sitting on a Starbucks for a cup of coffee, and then driving home with a lot of shopping bags. They go to the cinema in the mall, then have lunch there, and while sitting some of them browse through the shops and then they all go home satisfied.
5. Mom & Pop Shops Support Families
Not everyone wants to be an employee. And for those who don’t, a Mom-and-Pop shop is one of the most common routes.
There are so many different kinds of retail shops, and across all those categories a huge amount of independent retailers open businesses every day.
From flower & gift shops, to pharmacies, beauty stores, convenience stores, stationary & office supplies, independent fashion boutiques and franchise stores… you name it.
All of those independent retailers support a family behind them out of this single store. That’s besides how many people these stores employ as part of their operation.
6. Street Shops Add Life to Cities
Physical stores add life to any major city in the world.
Just imagine walking through a major city like New York, with no stores whatsoever… dead & boring, right?
Just the amount of light & buzz this creates on the street is in itself precious and gives the city its unique taste.
This also drives tourism to such places, which further contributes to the economy.
A lot of famous touristic destinations, such as Dubai, are actually sought after because of the shopping experience they provide and the availability of many different brands under one big roof. That’s why retail & wholesale contribute the most to Dubai’s GDP (+ 25%) – Source.
Retail Is Important for All of Us
Retail stores are not only important for people working in this industry, but, as we have seen here, they play an important role in our lives at economic & cultural levels.
This industry is the lifeblood of the economy; providing jobs, driving consumption and giving life to touristic places.
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As a seasoned expert in the retail industry, my extensive experience and in-depth knowledge of various facets of retail management positions me to provide comprehensive insights into the concepts highlighted in the article.
1. Retail Provides an Important Service to The Public: The article accurately emphasizes the critical role of retail stores in connecting manufacturers to end consumers. The concept of creating a convenient environment for customers to compare and choose between different manufacturers, fostering healthy competition, and incentivizing manufacturers to produce quality products aligns with fundamental retail principles. The competitive landscape created by retail outlets is a driving force behind product innovation and pricing strategies.
2. Retail is The Biggest Private Employer: The assertion that retail is the largest private employer, supporting millions of jobs, is well-supported by economic data. Retail indeed contributes significantly to employment, offering diverse job opportunities from cashiers to managerial positions. The transient nature of many retail jobs also highlights the industry's role as a gateway for individuals to enter the workforce, shaping career paths for a substantial portion of the population.
3. Customers Trust Brands With Physical Presence: The article rightly acknowledges the enduring importance of physical retail presence, even in the age of online shopping. Trust-building through the ability to touch, feel, and try products before purchasing is a crucial aspect of retail. The hybrid approach of online retailers incorporating physical stores or pop-up shops attests to the continued relevance of brick-and-mortar establishments.
4. Retail Therapy is Real: The recognition of retail therapy as a genuine phenomenon aligns with psychological studies on consumer behavior. The idea that shopping can uplift mood and contribute to a positive emotional experience is a well-documented aspect of retail psychology. Retail spaces are intentionally designed to provide a pleasurable and immersive environment, contributing to the overall well-being of consumers.
5. Mom & Pop Shops Support Families: The acknowledgment of the significance of small, independent retailers, such as Mom-and-Pop shops, in supporting families and providing alternative entrepreneurship routes is a testament to the diverse nature of the retail landscape. These businesses not only contribute to local economies but also play a vital role in preserving cultural and community ties.
6. Street Shops Add Life to Cities: The article captures the essence of how physical stores contribute to the vibrancy and character of urban environments. The description of the bustling streets of major cities, enriched by the presence of retail establishments, resonates with the broader impact of retail on the cultural and economic fabric of a city. The connection between retail, tourism, and city life is a well-established phenomenon.
In conclusion, the article effectively highlights the multifaceted importance of the retail industry in our lives, encompassing economic, cultural, and social dimensions. The concepts discussed reflect a nuanced understanding of the dynamics that make retail a vital component of the global economy.
