Fixed Shop - Large Retailers and Chain Stores or Multiple Shops

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Fixed Shop Retailers

Retail stores are known for selling goods and services to customers by using multiple channels of distribution with a sole aim to earn the profit. Retail stores can be of two types: itinerant and fixed. Fixed retail stores are top-rated in urban areas and large cities. Consumers in urban areas always desire to shop from fixed retail shops such as supermarkets and malls.

Let us discuss two fixed shop retailers that are large retailers and chain stores or multiple shops:


Large Retailers

Large retailers are also known as departmental stores. Department stores are considered as one of the important parts of the retailing industry. The stores are huge and provide a variety of products to the customers under one roof. These products are classified into departments and all these departments are located under the same roof. In urban areas, more departmental stores are being established because of their popularity among the masses.

A departmental store is an independent unit selling different products under one roof. The products may include womenswear, menswear, electronics, toys, etc. Some department store examples are Macy's, Big Bazar, Reliance Smart, etc.


Features

Some of the crucial features of departmental stores are:-

  • They are usually located in densely populated areas which turn out to be a great advantage for them.

  • Departmental stores goal is to improve the shopping experience of its valued customers by introducing different facilities. 

  • Departmental stores are companies with shareholders because of the size of the operation. Needs of funding is significant in the case of these stores.

  • Departmental stores do not believe in middleman and operate retailing as well as warehousing functions.

  • Departmental stores follow the method of centralized purchasing.


Advantages

Advantages of departmental stores are:

  • The convenience of customers is one of the most important advantages of departmental stores. Customers can buy different type of products and fulfil all of their shopping needs under one roof. By visiting departmental stores, customers can save their time that they would have wasted in visiting different stores. Customers can save time and labour.

  • A departmental store doesn't only provide different products but also ensures customers variety in each product. For example, if a customer is buying a TV, then he/she gets to choose a  product from different brands that are there in the store.

  • Departmental stores operate on a vast scale; thus, it gets the benefits of large scale production. When production is huge, the cost of production decreases that helps the company to sell the products at a low price and make profits.

  • Departmental stores are financially stable, which help them to run promotions for their company; this attracts the customers.


Disadvantages

Disadvantages of departmental stores are:

  • The departmental stores also provide many special services to its customers which results in an increase in their operating cost. A higher operating cost restricts the company to offer discounts to its lower-income customers.

  • The departmental stores are huge, which make it impossible to attend and assist each and every customer shopping in the store.

  • Establishing a departmental store requires a considerable amount of funding and a large place thus making it quite difficult. There is a lot of risk in this field as a huge amount of money is involved without any certainty.


Chain Stores or Multiple Shops

Chain stores are also known as multiple shops which function under one brand and have common ownership. This is branches or outlets of a single brand that are spread across the country. These type of shops were first established in America and now have become popular all over the world. Some examples of multiple shops are Croma and Dmart.

Chain stores have common ownership and do not have individual owners like in franchising. The looks and designs of each chain store are similar to one another. The display system, the colour of the walls, furniture and other arrangements are also kept uniform in all chain stores in order to retain a brand identity. Some of these chain stores examples are Dominos, KFC, etc. 

There is a popularity of chain stores in India also. Many Indian companies are adopting this type of retailing for their companies. Some examples of chain stores in India are Reliance Fresh, Lifestyle,  Dmart, etc.


Features

Some features of chain stores or multiple shops are:

  • Chain stores also follow the method of centralized purchasing because the head office sends the product to individual chain stores for sales.

  • The chain stores are located near populist areas with the idea of remaining close to its target customers.

  • The control and responsibilities of the chain store are in the hand of the branch manager or store manager. He/she is responsible for giving reports to the head office regarding the performance of the chain stores.

  • There is one head office.

FAQ (Frequently Asked Questions)

1. What are the Limitations of a Chain Store?

Some of the disadvantages of chain stores are:

  • Unlike the departmental store, the variety of products is limited in chain stores. The number of choices available for customers is limited. 

  • The chain stores are always dependent on the head office, which is why they don't show any initiative in increasing the sales of the store.

  • These stores are not flexible to changing market demands. If the demand for market change, then these stores are going to face huge losses.

2. What are the Characteristics of Fixed Shop Retailers?

Some of the characteristics of a fixed shop retailer are:

  • The amount of resources is huge in this case, and the scale of production is larger as compared to itinerant retailers.

  • This type of retailers deals with a different type of products, including consumer durable as well as consumer non-durable products.

  • Their cost of production is lesser as compared to itinerant traders because the production amount is huge in case of fixed retailers.

  • They provide after-sale service to the customers, which motivates the customers to make their purchase from fixed retailers in  future.