American Retailing
American retailing came about because of the Industrial Revolution. The first retailers were those who made what they were trading. The first retail shops were called trading posts and were spaces set up for people to trade (retail merchandising notes). Businesses that derived from trading posts were small and serviced a small market. Then the railroad was built which gave people access to goods as well as the opportunity to ship goods. Business centers then moved to big cities which brought people into urban areas to work. Population and immigration boomed due to the large demand for new products and jobs (International Retailing Text). Montgomery Ward and Sears started mail order catalogs and shipped via the railroad. This was the beginning of retailing in America.
America has many types of retail environments. One type is self-service. The cost of the goods in this environment are low and are that way because of the lack of salespeople. Consumers also feel free to shop at their own pace in self-service environments. One example would be warehouse stores such as Sams Club and B.J.’s Wholesale Club. Another type of retail environment is discount stores. Consumers feel like they are getting a better deal at discount stores. There are certain items that people feel comfortable buying at discount stores. For example, a consumer might feel comfortable buying toiletries at Wal-Mart, but they would not buy clothes there. Instead they might designate these purchases to a department store such as Hudson Belk.
There are many factors that set the U.S. retail industry apart from those in other countries. The first difference is the fact that there is little government regulation on retailing in the United States. In Europe, the government requires stores to shut down for one week in order for the employees to take a mandatory vacation. The government also requires some sort of education in the retail field in which they wish to work. In the United States, zoning is very liberal. As long as a piece of land or a building is zoned for commercial use, it can be used to virtually any type of retail establishment. In Europe, the government regulates which stores go where. Pricing is also liberal in the United States, meaning an establishment can charge whatever they want for a product or service.
Another factor that sets the United States retail industry apart from those in other countries is that retailers can choose what specific merchandise they want to carry. In some countries, the retailers do not get to choose which specific pieces they carry in their store. Instead, the manufacturer dictates what they will receive.
The buyer plays an integral role in the retail industry in the United States. The buyer has the freedom to research different lines and vendors and choose who they want to work with and which, if any, merchandise they choose to buy. This is not attainable in some countries such as Japan. In America, buyers are the gatekeepers for consumers (International Retailing).
The United States also has an extensive network of national chain stores. This draws in consumers and gives the stores around them a chance to reap the benefits of their presence. For instance, if Sears is in a mall, most people in the area will know that and go there for certain service such as car repairs. By consumers going to Sears, they are walking in the mall and passing by smaller, less known stores. Thus, they might take notice of these smaller venues.
The United States also has an advanced system of logistics for communication between the retailer and the vendor and or the manufacturer. The latest cutting edge technology allows stores such as Wal-Mart to automatically reorder stock when the inventory of an item reaches a certain level. This is a very convenient method of placing orders, saving the retailer time and money and allowing them to use those saved funds elsewhere in the company to eventually turn it over into a profit.
American retailing also has the advantage of national brands. Consumers trust these brands and feel comfortable purchasing them. Without national brands, discount retailers could not develop (International Retailing). Private brands are also an advantage. Supermarkets depend on their own private brands of products to make a profit. Retailers such as The Limited and Gap create their own lines that are sold only in their stores. This gives them a differential advantage over stores that carry national brands.
Another aspect that is important in American retailing is the fact that a retailer can hire or fire employees based on their sales needs. As aforementioned, in Italy retailers must shut down for a week in order for employees to go on vacation. During this time the employer is not allowed to hire new help. This is not true in America. In America, being short staffed means losing sales which in turn means losing a profit. And retailing is about making a profit at the end of the day.
Another advantage that American retailers have is the fact that there are permanent marketplaces for all kinds of goods. An example of this is Americasmart in Atlanta. At market, retailers can go and visit hundreds of vendors and hand pick all of the merchandise they would like to carry in their store. And all of these vendors are under one roof. Their showrooms are always there and it is almost a guarantee of availability of goods. It is considered “one stop shopping” for retailers.
The United States also has a large number of independent retailers. The government does not protect them against larger retailers. Thus they must be competitive and creative in their tactics to compete against the larger retailers. Independent retailers make retail different and interesting because they are not corporate. Therefore, there is no limit to the creativity that can be displayed via merchandise, promotion, or aesthetic factors.
The United States is a free market system. This means that producers are free to produce as much as they want of whatever they want (International Retailing). Also, consumers are free to purchase as much as they want. There is no limit as to what they can buy or how much. The supplier and the consumer’s needs must be met. In order to attain this, there are a few guidelines that assure this process is successful. First, specialized production of goods must be met with specialized demands of consumers. This can be done by doing market research, or, simply finding the target market. Secondly, the products have to get from the manufacturer to the consumer. This is the purpose of the retailer, a middleman between the vendor and or manufacturer and the consumer. Finally, supply and demand must be equalized over time. This is also attainable through market research as well as the retailer knowing their customer’s wants and needs.
Overall, American retailing is a force purely driven by the consumer and the rights given to Americans. Since freedom is such as repetitive norm, it is echoed in all aspects of American life. Including business. By allowing retailers to have the freedom to sell what they want, for how ever much they want, this imposes competitive practices among retailers. These retailers keep consumer’s spending their money and taking discretionary actions as to where they will spend it. This, in effect, causes more businesses to open and more goods to be sold. Thus creating a healthy economy. So, with freedom, comes competitive strategy, and with competitive strategy, comes a profit.
