Have you ever heard the word "retail" used in a business setting? It generally refers to selling directly to consumers, but depending on the industry, it can carry a slightly different nuance.
This article covers the basic meaning of retail, how it's used across different industries, how it differs from wholesale, and related terminology, all in one place.
What Is Retail?
Retail refers to the sale of goods purchased from manufacturers or wholesalers directly to individual consumers. Supermarkets, specialty stores, and e-commerce sites are all typical examples of retail.
The term is often used interchangeably with "selling to consumers," and broadly refers to any B2C (business-to-consumer) business.
What "Retail" Means in a Business Context
In a business context, "retail" is used not just to describe the retail industry itself, but also as an expression for "operations aimed at individual customers or small-scale customers."
For example, terms like "retail division" or "retail sales" often refer to a team or set of activities focused on individual customers rather than corporate clients. This distinction originated in the financial industry, but is now widely used across industries regardless of sector.
The Difference Between Retail and Wholesale
"Wholesale" is the term that pairs with retail. The distinction between the two comes down to who the sale is made to.
Retail Is a Transaction Aimed at the End Consumer
Retail is a sales transaction aimed at the individual (general consumer) who will ultimately use or consume the product or service. It assumes that the consumer will pick up and use the product themselves, and tends to involve small quantities or single-unit purchases. Pricing is generally set at the retail price.
Wholesale Is a Transaction Aimed at Businesses
Wholesale is a sales transaction aimed at businesses — companies, retailers, and the like — who purchase goods in bulk with the intent to resell them. It refers to the mechanism by which manufacturers or wholesalers sell products to these businesses in lot quantities.
| Comparison item | Retail | Wholesale |
|---|---|---|
| Who buys | General consumers / individuals | Businesses such as companies and retailers |
| Transaction size | A single unit to a small quantity | Bulk quantities (often in lots) |
| Price range | Retail price | Wholesale price |
| Purpose | Consumption / use | Resale |
[By Industry] How the Term "Retail" Is Used
The term "retail" isn't limited to the retail industry — it's used across a variety of sectors. Since the scope and context differ by industry, let's look at each one.
Retail in the Financial Industry
In the financial industry, "retail" refers to the services and sales activities that banks, securities firms, and similar institutions provide to individuals, sole proprietors, and small-to-medium businesses. Terms like "retail banking" and "retail sales" are commonly used, typically in contrast to a "wholesale division" that serves large institutional investors and major corporations.
Services aimed at individuals — deposits, loans, and investment consulting — fall within the retail domain.
Retail in the Real Estate Industry
In real estate, the term "retail" is sometimes used to describe operations that deal directly with general consumers, such as home sales or rental brokerage aimed at individuals. This is distinguished from large corporate property transactions or the buying and selling of investment real estate, with "retail" generally referring to services that individuals use in their everyday lives.
Retail in the Apparel Industry
In the apparel industry, "retail" refers to all operations that sell products directly to general consumers through stores or e-commerce sites. Brand-owned stores, department store floor space, and online stores are all part of the retail domain, since they're all points of contact between consumers and products.
This is distinguished from wholesale operations that supply products to select shops or retailers, and the term "retail" is also used in the context of "D2C" (Direct to Consumer), where a brand sells directly to consumers.
Terms Related to Retail
In business and retail settings, many terms incorporate the word "retail." Let's go over what each one means.
Retail Sales (Activity)
Sales activity aimed at proposing products or services to individual customers or small-scale customers. This term is used across a wide range of industries, including finance, telecommunications, and insurance.
Retail Store
A retail store where products are sold directly to general consumers. This includes street-level shops, mall tenants, and brand-owned stores. Online shops are sometimes also referred to as "retail stores."
Retail Sales (Transactions)
Sales activity aimed at consumers or individual customers. This is used with roughly the same meaning as "retail sales activity," but is sometimes used in a broader sense that includes the actual point of sale, whether in-store or via e-commerce.
Retail Business
A term referring to any business that provides products or services to consumers. It's used to broadly describe the retail industry as a whole.
Retail Marketing
Sales promotion and marketing activity carried out with an awareness of touchpoints with consumers, whether in physical retail stores or on e-commerce sites.
Starting a Retail Business with E-commerce
In recent years, using an e-commerce platform has become an increasingly popular way to start a retail business. Compared to opening a physical store, e-commerce makes it easier to keep initial investment low and to start selling without being limited to a specific region.
Shopify is an e-commerce platform used in more than 175 countries worldwide, and is widely used by everyone from those just starting a retail business to retail businesses that already operate physical stores.
Since you can manage everything from product listings to payment, shipping, and customer management from a single admin dashboard, it's a setup that makes it easy to bring together everything a retail operation needs.
It also supports omnichannel operations that combine physical stores with e-commerce, as well as building a sales page that matches your brand's identity, making it a platform that's easy to use as your retail business grows.
For more details on Shopify's features, pricing, and pros and cons, see the article below.
