What Are The Four Characteristics Used To Classify Retailers?

It is undeniable that retailers perform an important marketing function that enables ultimate customers to approach a broad variety of products and services. So, what are the four characteristics used to classify retailers? Let’s dig into this post to have an overall view of retailers’ characteristics and learn how to categorize them!

What Are The Characteristics Of Retailers?

Before jumping right into the question of “What are the four characteristics used to classify retailers?”, it is important to deeply understand the concept of retailers’ characteristics.

Alongside large department stores, retail chains are in charge of selling finished goods directly to ultimate customers – the last point in the distribution channel.

In other words, retailers finish the final stage of the chain through small quantities after purchasing goods from suppliers, manufacturers, or wholesalers at a discounted price.

Through presentation in retail outlets, retailers draw attention from customers to particular goods and services. As the final link between manufacturers and consumers, the main goal of retailers is to reach maximum profit by increasing customer lifetime value.

What Is The Classification Of Retailers?

The classification of retail formats divides into two branches: store based and non-store based retailing.

The traditional format of store based retailing is subject to the basis of ownership and merchandise. For ownership in retail, it is run by families, corporate chains, parties, or consumers. In contrast, merchandise in retail seems to be a more diverse format with a variety of different retail outlets.

On the other hand, non-store based retailing is an unconventional format in which customers can directly contact the retailers. Two branches of non-store based retailing categorization include direct selling and direct response marketing.

In the age of technology, customers have no difficulty in incorporating mail orders, television shopping, and electronic shopping to get in touch with retailers. However, this emerging format might not be available in many countries. Retailers should strengthen their store based retailing in this case.

Four Characteristics Used To Classify Retailers

What are the four characteristics used to classify retailers? We can categorize retail establishments based on their features, including product line depth, the amount of service offered,  the prices, and how to organize.

Amount Of Service

The most basic feature of retailers is the amount of services they offer.

Apparently, three levels of services used to classified retailers include no service, self-service, and full-service.

Retailers who offer no associates as well as check lanes fall into the group of no service. For retail outlets with customers performing the checkout and packaging the product themselves, it is recognized as self-service. In the case of retailers handling almost all aspects of the shopping process, they fit into the group of retailers with full-service.

Product Line Depth

How many products in a specific product line employed by companies will decide product line depth. Companies may choose between full-line strategy or limited line strategy.

Full line strategy offers a great number of variations of a product from a particular company. The two basic goals of this strategy set their sights on high market share and market growth.

On the other hand, limited line strategy provides a smaller amount of variations of a product. The idea behind this approach is to create a sense of immediacy to sell out quickly.

Relative Prices

The most interesting characteristic used to classify retailers is relative prices. In retail, discount stores and off‐price retailers are the two types of retail outlets.

Discount stores offer a higher volume of standard merchandise at more affordable prices than traditional retail outlets. It is important to distinguish between discount stores and regular stores with occasional discounts. This type of retail outlet often puts retailers at risk of declining profit margins.

Off‐price retailers provide consumers high-quality goods at cheap prices. Superior products at off-price retailers include manufacturer irregularities, second-hand goods, overrun goods, off-the-season items, and canceled orders.

How They Are Organized

How retailers organize is the last answer to the question “What are the four characteristics used to classify retailers?”. Apparently, they concentrate on three organizational structures: centralized operations, store operations, and regional operations.

All decisions derive from the head offices in centralized organizations, while customers own the job of choosing to buy or not to buy a product in store operations. Conversely, all issues and concerns in regional operations are handled by managers.


Since the answer to “What are the four characteristics used to classify retailers?” has been analyzed, you already have good basic knowledge in retailment. Whether you are looking forward to starting your own retail business or not, we do hope that all the above information are helpful guidelines for you. As the gateway to success is not easy to navigate, do not hesitate to explore and learn more!

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