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Retail Sector in Country Economy

Literature Review Example

Retail Sector is know to be the most crucial sector of any country’s economy, The industry serves as a conduit for corporate dealings with the general public. In this capacity, it serves as both the global face of production and the engine of manufacturing for billions of consumers around the globe. Its role in spearheading the global environmental movement is crucial given its current position. Retail is a dynamic global industry that provides customers with a huge selection of products and services. (Erol et al.,2009).

The retail industry is a vast sector encompassing the sale of goods and services to consumers for personal or household use. Retailers can operate through various channels, including physical stores, e-commerce platforms, and a combination of both (omnichannel retailing). The industry is diverse, covering a wide range of products and services, and it is subject to constant evolution driven by changing consumer preferences, technological advancements, and economic factors.

The essence of this literature review, to offer a panoramic view of the retail industries. embark on an exploration of the retail industry, this introduction lays the foundation for a comprehensive examination of its intricacies. Through the upcoming literature review of key emerging changes, and critical perspectives, as to provide an understanding of the challenges faced by the industry and the opportunities that rises in the sector.

Global review on the retail sector

Retail is the channel via which manufacturers and suppliers deliver their goods to customers. Retailers frequently purchase their products straight from manufacturers. At this point, a raw material turns into a completed good. The sector includes the sale of items via physical storefronts, kiosks, mail order, and online. Retail services refer to the use of a building or a portion of it by individuals who are in the business of selling items to consumers. Retailers use a supply chain to meet customer demand. The retail sector necessitates making a range of strategic decisions at the strategic level, such as choosing the right shop type and target market.(Deloitte,2016)

Rising GDPs in emerging economies translate into higher population per capita incomes. This results in higher population spending, which is a major market driver for the retail sector. Another trend driving this industry is the rise in online purchasing, which occurred as a result of an increase in internet traffic brought on by the coronavirus epidemic and an increase in the volume of transactions made on various e-commerce websites. The retail sector is changing as a result of the advent of new technologies like IoT and AR, which give customers a unique shopping experience.

Global Retail Industry Market Segmentation Analysis

The Global Retail Industry Market is segmented on the three main factors Product, Distribution Channel, And Geography. Accordingly, to the Distribution Channel, The retail industry depends highly on e-commerce for its revenue generation. As the Convenience stores are small retail outlets that they serve purpose of small transactions by the buyer. Department stores are large shops which stock various goods in different departments. A specialty store is a place that has a deep assortment of brands, styles, or models within a relatively narrow category of goods. (Grewal, 2017)

the global retail market generated sales of over 27 trillion U.S. dollars, with a forecast to reach over 30 trillion U.S. dollars by 2024. Which makes it a very rich sector full of opportunities, and a competitive field.(Statista,2024)

The top retail markets in the world

Literature Review Example

Source: Statista,2024(ac,01/2024)

Changes and trends in the industry:

Digitalization and the use of AI:

 According to Paraida, Sjödin, and Reim (2019, p. 6), digitalization is the “use of digital technologies to innovate a business model and provide new revenue streams and value-producing opportunities in industrial ecosystems.” So, rather than introducing new technology, the emphasis is on comprehending the use and implementation of digitalization. It is obvious, from the empirical context of the retail industry that digitization has a wide range of effects on the value generation, value delivery, and value capture aspects of business models. For instance, businesses are now able to quickly make better marketing decisions by using Artificial Intelligence for value-creation on social media material, which gives them more precise insights into customer behavior. (Aversa, Hernandez, & Doherty, 2021).

As part of a new value delivery routine, chatbots and robot-generated responses have similarly ensured a quick and reasonably accurate response to client questions (Hoyer, Kroschke, Schmitt, Kraume, & Shankar, 2020). Using virtual reality (VR) to improve the customer experience is another example of value delivery (Battisti & Brem, 2020). Lastly, we are witnessing more experimentation in value-capturing activities with big data analytics (Aversa, Hernandez, & Doherty, 2021), blockchain, and cryptocurrencies (Choi, Guo, & Luo, 2020). These developments will have a long-term effect on the revenue models of the retail sector.

 

Literature Review Example
 

Sustainability

In recent time, the issue of sustainability has grown at a great pace, taking on an important relevance in societies and now becoming one of the most important management elements for both governments and companies.

The concepts and topics related to CSR research are extensive and intricate. The term “sustainability” is widely used and can refer to anything from protecting the planet’s natural ecosystem to generating profits now and in the future due to a competitive advantage (Porter, 2008). A worldwide policy debate on sustainable development is linked to sustainability (Drexhage and Murphy, 2010). Sustainability and corporate sustainability are two concepts that are frequently used interchangeably with CSR (Sheehy and Farneti, 2019).

The idea of sustainability in retail is new and pertains to a number of topics, such as logistics, transportation, cleaner production, reducing waste in the manufacturing process, and eco-efficiency. Sustainable management benefits consumers and retailers alike in numerous ways, in addition to ethical considerations. Approximately 68 million of customers around the world base their purchases on social, environmental, and personal values. They also report spending up to 20% more on environmentally friendly items and citing sustainability marketing as a factor in their decision-making. Nonetheless, 93% of consumers demand more from the businesses they use to address social and environmental causes, according to Retail Industry Leaders Association. Retailers are becoming more committed to sustainability as a result. In this study, we concentrate on the academic works that link the two domains. Sustainability and merchants, in order to understand the literature’s present condition, its historical development, its current trend, and its primary future consequences. (Ruiz-Real et al., 2018)

This phenomenon of retail pressure being applied in order to change supply chain processes may be the simple result of the distribution of jobs. An estimated one in every seven jobs are supply-chain related. Additionally, the focus on retails’ supply chain management is a consequence of product and process standards being set by lead companies such as retailers the results of which cascade down through the supply chain and across the business network (Ruggie, 2017). Research suggests that there is growing consumer and general social pressure on retailers to use their power vis a vis the suppliers as a lever for positive change (Vandenbergh, 2007).

One possible explanation for the phenomena of retail pressure to modify supply chain operations could be the way jobs are distributed. One out of every seven employment is thought to be tied to the supply chain. The emphasis on supply chain management in retail also stems from lead organizations, like retailers, setting standards for their products and processes, which have an impact on the entire business network and the supply chain (Reggie, 2017).

Literature Review Example
 

Challenges and Opportunities:

Challenges faced by the Retail Industry

Optimizing Omni channel, Retailers will continue to embrace the omni-channel strategy in 2024 as they optimize Omni channel across all platforms. A seamless customer experience is produced by the omni-channel strategy, which unifies and coordinates all currently used channels for consumer engagement. Omnichannel strategies are very successful; organizations who implement them see a 91% increase in client retention year over year. Retailers must, however, maximize each consumer touch point and assure consistency with regard to the brand and the customer experience, including the in-store experience, in order to successfully use omni-channel marketing. (Forbes, 2023)

Furthermore, many challenges rises in the digitalization process of the sector. Main challenges are, Adapting to New Technologies, The retail sector often grapples with the pace of technological advancements. Retailers must choose relevant technologies and train their staff accordingly. The challenge is not just about adopting new tools but also about integrating them seamlessly into existing systems.

Data Security and Privacy, as digital transformation involves handling large amounts of customer data, ensuring security and privacy becomes paramount. Retailers face the task of protecting sensitive information from cyber threats while complying with data protection laws. In Addition, the Cost of Implementation, Investing in digital transformation can be expensive. The cost of new technologies and the need for skilled personnel to manage them pose a significant financial challenge, especially for smaller retailers. (Bacalhau, 2023)

However, Sustainability development present many challenges, Firstly Global Supply Chains, due to retailers frequent use of foreign suppliers, It is quite difficult to guarantee the sustainability of these supply chains, which includes minimizing environmental effects and using ethical sourcing methods. This spots the light on its main effect on the Environment, for example, trash Management: A significant amount is produced by retail operations, ranging from unsold products to packing materials. Among the most important obstacles to sustainable retail practices are trash management and reduction as well as recycling promotion. Adding up on the Energy Consumption: Retail establishments use a lot of energy, including distribution centers and actual stores. To reduce the environmental impact, energy-efficient techniques and technology must be implemented. (Journal of retailing,2021)

Opportunities

Due to technological advancements and changing consumer habits, the retail industry is changing more quickly than ever before. Channel integration and big data power are becoming requirements for competitiveness rather than differentiators. The Internet of things, virtual or augmented reality, artificial intelligence, robotics, drones, and autonomous cars are even more recent emergent forces that will determine the direction the field takes (Deloitte 2016).

For a long time, virtual and augmented reality have held great promise, but those hopes are just now starting to come true. According to Poncin and Mimoun (2014), new forms of technology-based reality and applications improve sensory experiences. For instance, fashion stores enable clients to participate in virtual fashion shows through the use of new technologies (Deloitte 2016). Building on AI-based technology, numerous businesses are testing autonomous cars, and numerous manufacturers and merchants are capitalizing on robotics and drone technological advancements (Van Doorn et al. 2017). Robots are already widely used in distribution centers by big manufacturers and merchants. In order to supplement its current delivery choices, Amazon has also made its ambitions for drone delivery public.

Retailers are under pressure from customers to package their items sustainably and recyclable for both online and in-store shopping. And that makes sense. The main source of emissions in the sector is e-commerce packaging. As per the Sustainable Packaging Consumer Report by Shorr:

In the last year, 76% of respondents claim they have deliberately tried to buy more environmentally friendly goods. If the packaging is sustainable, 86% of consumers think they are more inclined to make a purchase from the merchant. 77% anticipate seeing more companies offer packaging that is entirely sustainable in the future. Packaging that is sustainable is in demand from consumers. Retailers are starting to pay attention. (Businessresearchcompany, 2023)

Conclusion

In conclusion, the global retail industry is undergoing a profound transformation, driven by technological advancements, shifting consumer preferences, and the imperative to adopt sustainable and ethical practices. Retailers that proactively embrace these changes, leverage technology, prioritize customer-centric strategies, and build resilient supply chains are well-positioned to thrive in the evolving global retail landscape. The literature underscores the importance of agility, innovation, and strategic foresight for retailers aiming to navigate the complexities of the modern retail environment.

In conclusion, the retail industry stands at the intersection of unprecedented challenges and opportunities, shaped by a confluence of technological advancements, evolving consumer behaviors, and global dynamics. The comprehensive literature review highlights key trends and factors influencing the retail landscape, shedding light on critical areas that demand attention from industry stakeholders.

References:

Asgary, Nader H., et al. Global Business : An Economic, Social, and Environmental Perspective Third Edition, Information Age Publishing, Incorporated, 2021.

Rahdari, A., Sheehy, B., Khan, H.Z., Braendle, U., Rexhepi, G. and Sepasi, S. (2020). Exploring global retailers’ corporate social responsibility performance. Heliyon, [online] 6(8), p.e04644. doi:https://doi.org/10.1016/j.heliyon.2020.e04644.

Mordor intelligence (2018). Mordor intelligence. [online] Mordorintelligence.com. Available at: https://www.mordorintelligence.com/industry-reports/retail-industry.

Sabanoglu, T. (2022). Topic: Retail market worldwide. [online] Statista. Available at: https://www.statista.com/topics/5922/retail-market-worldwide/#topicOverview.

Görçün, Ö.F., Zolfani, S.H. and Çanakçıoğlu, M. (2022). Analysis of efficiency and performance of global retail supply chains using integrated fuzzy SWARA and fuzzy EATWOS methods. Operations Management Research, [online] pp.1445–1469. doi:https://doi.org/10.1007/s12063-022-00261-z.

Ruiz-Real, J., Uribe-Toril, J., Gázquez-Abad, J. and de Pablo Valenciano, J. (2018). Sustainability and Retail: Analysis of Global Research. Sustainability, [online] 11(1), p.14. doi:https://doi.org/10.3390/su11010014.

Fernando, J. (2023). Corporate Social Responsibility (CSR) Explained with Examples. [online] Investopedia. Available at: https://www.investopedia.com/terms/c/corp-social-responsibility.asp.

Lehner M. (2015). Translating sustainability: The role of the retail store. International Journal of Retail & Distribution Management, 43 (4/5), 386–402.

Grewal, D., Roggeveen, A.L. and Nordfält, J. (2017). The Future of Retailing. Journal of Retailing, 93(1), pp.1–6.

Mapsted (2023). 10 Must-Know Retail Industry Trends for 2023. [online] Mapsted Blog. Available at: https://mapsted.com/blog/retail-industry-trends.

Grewal, D., Roggeveen, A.L. and Nordfält, J. (2017). The Future of Retailing. Journal of Retailing, 93(1), pp.1–6.

Stuart J.H. (2011). An identity-based approach to the sustainable corporate brand. Corporate Communications: An International Journal, 16(2), 139–149.

www.thebusinessresearchcompany.com. (n.d.). Global Retail Opportunities And Strategies Market Report. [online] Available at: https://www.thebusinessresearchcompany.com/report/retail-market#:~:text=Opportunities%20%E2%80%93The%20top%20opportunities%20in [Accessed 23 Jan. 2024].

Maloni, M.J.; Brown, M.E. Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry. J. Bus. Ethics 2006, 68, 35–52. [Google Scholar] [CrossRef].

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