The retail industry is the oldest but still a common form of business. Traditional retailing involves selling products at a physical (brick and mortar) store. Common examples include franchises, hypermarkets, supermarkets, malls, etc.
However, the advent and the evolution of the internet has also revolutionized business practices. New business concepts have evolved with time, and selling products without a traditional retail store is becoming a new common.
Hundreds and thousands of firms are now operating without on-store retailing. They sell their products on online platforms such as their websites, social media accounts, etc. In business terms, this concept is termed as non-store retailing.
What is Non-Store Retailing?
Non-store retailing is a form of retailing in which a firm sells its products without a physical retail store/space. The firm sells its products via online platforms and delivers the product to customer’s doorstep.
Although companies have been doing non-store retailing for the past three or four decades, it rose to prominence during the 21st century. However, non-store retailing is not an average line of business by any means. Firms nowadays are switching to non-store retailing because of its “unlimited” benefits.
Importance of Non-Store Retailing
With the changes in customer’s preferences, the non-store retailing business has grown immensely during the 21st century. A lot of non-store retailing brands have established themselves as trustable sellers. Therefore, more and more people now prefer to shop without physically visiting the brick-and-mortar stores.
Moreover, non-store retailing has now taken a significant share of the retailing business. In fact, one of the world’s largest retailers, Amazon, is a perfect example of non-store retailing. The company has massive warehouses but no physical store. Customers buy the products online, and Amazon delivers the products at the customer’s mentioned designation anywhere in the world.
But, does that mean non-store retailing means selling products over the internet? Well, there are many other forms of non-store retailing, and we are going to have a detailed look at all of them.
Types of Non-Store Retailing with Examples
Generally, non-store retailing is classified into six further types:
- Direct selling
- Online retailing
- Automatic vending
- Direct marketing
- Electronics retailing
Direct selling is the oldest form of non-store retailing. Door-to-door selling is one of the most common practices in direct selling. Salesmen usually do cold calls to homes or offices to sell the products. Some salesmen prefer making an appointment with a potential client and then visit later. Salesmen also use other options such as promotions, standees, etc.
However, a firm needs highly trained salespeople for direct selling. It is not easy to persuade a customer unless you have the right skills. Therefore, companies spend heavy budgets on training such a workforce.
On the other hand, direct selling has a lot of benefits too. For instance,
- Direct selling allows a firm to interact directly with a customer.
- A customer can have a better demonstration of the related product.
- It reduces overhead costs for a business.
Direct selling also has further subcategories such as:
One to one selling includes targeting a single or multiple customer directly. They may visit different homes and offices to sell the products. Moreover, sometimes, the salesman finds a host who invites his/her friends or neighbors to one place, and then the salesmen demonstrate the product in front of a small gathering.
Multi-level marketing is a large-scale form of direct selling. Amyway.com is a common example of multi-level marketing. The firm started this mode of selling in 1994 when they used to hire independent businesses as their distributors. The company generally targeted the Asia Pacific region and Japan.
Telemarketing is another traditional mode of non-store retailing and was very common in the late 1990s and early 2020s. It involves selling a product via telephone. However, this non-store retailing channel has almost diminished over time.
Telemarketing is still a common practice in stockbrokers; they often approach their potential clients through telephones, etc. Moreover, bankers often sell their promotional offers, credit/debit cards, etc., via telemarketing.
Online retailing is one of the latest and most common forms of non-store retailing. Companies sell their products either on their websites or through social media platforms. A firm displays all the available items on its website so that the customer has multiple options to choose from. Customers select a product, make the payment, and the firm delivers the product at the customer’s doorstep.
Amazon.com Inc is the finest example of online retailing. The company has really revolutionized the non-store retailing business. Amazon operates in almost every part of the world. The best thing about Amazon is it caters to almost every single category of customers.
Automatic vending includes selling products with the help of machines. Mostly, FMCG companies operate with automatic vending machines. Firms install automatic vending machines in public or even in private places.
For instance, beverage companies such a coca-cola, Pepsi, Nescafe, etc., install their vending machines at public places such as stadiums, banks, roads, or even private offices. In fact, pizza sellers are now selling their products via vending machines.
Direct marketing is a blend of different non-store retailing practices. Companies used to do direct marketing through coupons, newspapers, magazines, and mails (letters). However, with the advent of the internet, companies now use emails, e-newspaper, websites, e-magazines, etc.
As of now, email marketing has become one of the most effective sources of direct marketing. Companies offer regular email subscriptions mostly free of cost. Potential customers are regularly updated about the latest offerings from the companies.
Electronic retailing is more of online retailing as sellers interact with the customers on digital platforms. These platforms may include the seller’s website or social media profiles. Customers select their desired product and may order through telephone, website, email, or send a direct message on the company’s social media accounts. Common examples include Etsy, eBay, Amazon, Alibaba, etc.
Advantages of Non-Store Retailing
Lower Business/Overhead Costs
The best thing about non-store retailing is you can start a business with little resources. If you go for a traditional brick-and-mortar store, you will need a physical store, and that can be very expensive. But, It requires a warehouse and a digital platform where you can connect to your customers.
Better and Easy Access to the Market
Non-store retailing has made it easier for businesses to access the market. You can set up a simple online shop and start selling. Amazon, eBay, and Alibaba started as simple online stores, and now they are the leading retailers across the globe.
Non-store retailing is now booming. It is not easy to capture or serve a bigger market with on-store retailing. However, with this type of retailing, you can access local as well as international markets. The potential for market growth is immense in this retailing. You just have to develop effective marketing strategies.
Non-store retailing requires customers to submit some necessary personal details to buy a product. This way, companies can keep a record of their customers, can access them with promotional offers, and evaluate customers’ needs in a better way.
Disadvantages of Non-Store Retailing
One of the most challenging things for non-store retailers is to attract customers and gain their trust. In fact, it can be more difficult for those new entrants who don’t have any prior market reputation. A firm without any physical presence may find it very difficult to get the business going.
A non-store retailer may not need a physical store, but it needs to advertise its products to get customers. Digital marketing can be very expensive, and it mostly works via the pay-per-click method. That said, the advertiser will have to pay for every single click on its advertisement regardless of the sale.
Structural costs in a non-store retailing business can be high. A business will need a website and a warehouse to start with. Moreover, social media presence is equally important for non-store retailing, and you may have to hire experts to make and manage your website and social media profiles.
Security and Legal Requirements
Websites and other digital channels are always exposed to hacking. If a hacker gets into your business website or social media profiles, things can become very messy for you. Besides, you must be aware of and comply with eCommerce laws related to run a non-store retailing business.