What is the retail industry?

Did you know that every time you shop, you support millions of jobs and trillions of dollars worth of labor income? The retail industry spans far and wide in the national economy. Retail is the process of selling goods or services to customers to earn a profit.  While most people associate retail with clothes shopping, this industry encompasses all consumer goods and services.

According to the National Retail Federation, retail is the largest private employer in the US, directly and indirectly supporting about 42 million jobs. This translates to $1.6 trillion of labor income and a $2.6 trillion annual contribution to the country’s GDP. Not to mention that retail supports one in four US jobs, making it among the key driving forces of the national economy.

Most retail companies are in fact small businesses and franchises and nearly all retail businesses employ less than 50 people. Furthermore, franchise retail products were predicted to see a 5.5 percent growth in financial output in 2017.

Most retail companies are small businesses and employ less than 50 people.

Most retail companies are small businesses and employ less than 50 people.

Categories and trends of the industry.

The retail industry contains many sectors, chief among which is the resell retail sector. These retail franchises, such as Plato’s Closet, purchase and resell quality or designer used clothing. As a result, these franchises further bolster the industry. According to a study conducted by NPD, healthy lifestyle trends have moved beyond food and into the retail industry as well. Retail goods such as wearable technology and activewear exploded in popularity in 2015 and have continued along the same path. According to the study, many brands and retailers have taken advantage of the health conscious consumer patterns of millennials.

These consumer patterns of health and wellness have also been reflected in sales of home appliances. Products such as scales, rice cookers, food processors, blenders, and water filtration devices all saw a huge spike in recent time. Even large food retailers have begun to follow this trend, offering healthy, organic options in their selections.

Other sectors of the retail industry have begun to grow as well, including jewelry, video games, and computer technology. Studies anticipate that these sectors will continue to expand as technology and products develop and update.

Healthy lifestyle trends have moved beyond food and into the retail industry.

Retail battles online merchants.

Due to developments in online shopping, traditional retail has faced challenges. Chief among these challenges stems from the growth of Amazon, including their Amazon Prime option. In 2016, 43 percent of all US retail sales came from online shopping. Nevertheless, retail franchises have fought back against this new shipping trend, using first person, immediate customer service. A key issue that Amazon faces is a lack of customer service, leaving some clients frustrated when their shipments don’t arrive, or products fail to function. Reaching customer service representatives from online retailers can also prove extremely challenging.

For this reason, more retail services are looking to improve and push for improved, affective customer service. With about 97 percent of consumers saying that customer service ranks as “very important” or “somewhat important” in their retail experience, the industry is looking to improve this experience.

Not to mention, retail franchises have the added advantage of localization. With the potential to appeal to local clients, retailers can base the consumer experience around community. Franchises can connect with local vendors and local community needs. This presents a huge advantage that franchises are using against the growing e-commerce competition.

Clearly, location plays a key role in retail franchising. So, finding the perfect spot to open a location or branch is vital in the future success of the franchise. Franchisors and franchisees must consider the market in the area. Is there a demand for the product or service? The customer base in a specific location plays a key role, too. Does the area provide a large and loyal clientele?

Considering the sheer size of the retail industry, there’s plentiful competition between retailers. This is why marketing, alongside location choicem plays a significant role in attaining success in the industry. Essentially, franchises need to convince customers that their goods or services are superior to those of another brand. A knowledge of current trends and markets can give any retail franchise an edge over their competition when it comes to marketing campaigning.

Is the Industry Right for You?

Retail franchises are a great way to work with your family, as it is very simple and easy to get them involved in the business. Not to mention, in retail there is an endless amount of options and potential businesses to choose from. This can make for a preferable and fulfilling working environment.

As a prospective franchisee, it’s vital to consider the physical location of your retail franchise. Understanding the desired market can help narrow down an optimal location. Even though a specific area may be population dense, that doesn’t necessarily guarantee a large clientele. Certain locations may be populated with a certain demographic that does or does not have interest in your product or service. This is where an analysis of an area’s population can be an advantageous benefit. Using the franchisor is an excellent resource when selecting a location. Often, franchisors have research and data regarding certain areas, which can be a helpful resource.


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