Top Ten Facts About Retail Store Businesses
The retail industry consists of businesses that the U.S. Bureau of Labor Statistics classifies as non-store and store. Non-store examples include catalog, direct response and in-home demonstration sellers. Stores are businesses that operate at a set location and cater to walk-in traffic. Retailers are the last step in getting products from manufacturers to end-users.
According to the U.S. Census Bureau, 71 percent of retail store businesses had fewer than 10 employees in 2010. The National Retail Federation's "Retail Means Jobs" website says the industry as a whole supports one out of every four U.S. jobs.
Half of all working teenagers have jobs in retail. More than one-third of retail employees work part-time, and 60 percent of them are women. According to the Society for Human Resources Management, retail is the third-highest industry in employee turnover. The category of hotels/restaurants is No. 1 in turnover and recreation/entertainment is second.
Retail stores represent the pulse of consumer spending. As of 2013, that spending accounted for 70 percent of U.S. gross national product. Economists measure consumer spending to gauge the state of the economy.
In spite of the influx of online shopping opportunities, industry research firm Retail Sails says that traditional brick-and-mortar store locations generate more than 90 percent of U.S. retail sales. Based on sales per square foot, a common measurement of store success, the most successful retail store business in 2011 was Apple: $6,050.
Stores cope with shoplifting, employee theft and fraudulent returns that eat into their profit margins. According to the National Association for Shoplifting Prevention, shoplifters take $35 million of goods daily from retailers. Internal theft accounted for more than $34 billion in 2011 losses, according to the association. Returned stolen merchandise, fake receipts and "wardrobing" -- the return of clothing that's been worn but is undamaged -- add to the cost of doing business. Overall, 9 cents of every sales dollar comes back as returned merchandise.
Competition puts customer service at the top of today's retail store agenda. A customer will take her business elsewhere after fewer than three bad shopping experiences. A 2012 Northwestern University survey found that bad customer service led 40 percent of shoppers to purchase online rather than in a store.
Psychology lies behind merchandise displays and store design. Retailers must grab customer attention within seven seconds or risk losing their interest. Because 99 percent of shoppers veer to the right when they enter a store, stores place prime merchandise in the front right entrance area. To draw customer interest, retailers use VIBGYOR color blocking, to place merchandise in a color sequence that emulates how prisms break up light: violet, indigo, blue, green, yellow, orange and red.
Smartphones and tablets continue to change the shopping landscape. Known as "m-commerce," sales generated by these mobile devices approached $25 billion in 2011, according to Emarketer.com. Increasingly, retailers of all sizes are including websites in their marketing mixes to draw traffic into their stores.
Retail stores live by seasonality. Every winter, spring, summer and fall they bring in new merchandise and discount existing inventory to make room for it. Product categories benefit from individual holidays such as Mother's Day and Valentine's Day and events such as the Super Bowl. The last two months of the year can account for 20 to 40 percent of a store's annual sales.
According to research by OnePoll.com, women spend eight-and-a-half years of their lives shopping for their families and themselves. They window-shop about 51 times annually, spending nearly an hour bargain hunting and comparison shopping each time.