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Retail Industry In United States

Retail Industry in the future will be in more automated. The retailers who understand the need of shift towards changing customer behavior and technology will be a smash hit.

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Definition / Scope

The word 'Retail' is derived from a French word, retailer, with the prefix re and the verb tailer meaning "to cut again". Retail is generally refer to a set of activity that involves selling of goods or services to the ultimate customer for any use or consumption form various type of merchants.

The first US retailers were established on 7th April 1818; Henry Sands Brooks opened H&D H Brooks & Co. This retail company was providing ready-to were men’s suits to the American customers. Now, this company is renamed as The Brooks Brothers Group. It has 210 stores all over U.S and 70 stores in other countries.

Back then, the store was usually operated by a single person. But after Second World War there were tremendous change in this industry. The store were classified into two types i.e. store and non store retailers.

Store retailers are usually placed at a prime location where the customer can easily walk in the store. These stores usually have extensive display of merchandise and use mass media marketing in order to attract the customers. They sell the product to general public for household or personal use and some server for the institutions. Some of these store retailers even have a provision for after sales services like installation and repair. It includes departmental store, supermarket, convenience store etc where as Non store retailers sell goods and services to the customer but outside the convectional store. It includes direct marketing, online marketing, and automatic vending etc.

In today’s context, retail is a very complex field. It requires selling of diverse product like food, clothing, automobiles, and health care product in one space. Purchases of these goods are usually done directly from wholesaler. The wholesales purchase goods in large quantities from the producer and act as a mediator between producer and retailer. Later the retailers purchase the product from the wholesaler. Thus, retailer resells these products in small quantities to general public.

The retailers offer customer with multiple brands product with informative services. A retailer is usually an agent or a business person whose main objective is to sell the product based on marked price set by the merchandise to the customer. She/he performs all the marking activities, buying, selling and gathers all the information that the customer wants.

Supply chain.PNG

Market Overview

A century ago, buying and selling were uncomplicated. The store was operated by a single person. But today due to the changing business environment, and new technological trends retail industry has become a complex world.

On 2008 retail industry hit recession phase. Many people lost their job. But in early 2010 the retail industry was back on track. E-commerce retail sales had increased by 4.2 percent and in 2017 total retails increased to 8.9 percent.

Today, Retail industry is going through transition phase. It is mainly being disrupted by two trends i.e. technology and change in consumer behavior. Many of the stores have made an announcement plan to close. Now, survival of the store depends on understanding the importance of both trends and overcoming the shift towards thrive whereas the retailers who are not willing the change will have to leave the market.

However, retail industry in U.S is one of the largest industries among other industry. In 2017, this industry has employed 20.31 millions of people and has created a market value of 3.1 trillion dollars. In addition, this industry have contributed 5.9 percent to its country’s GDP and According to National Retail Federation, the retail industry is expected to grow around 4 % in 2018 i.e. market value is expected to be around 3.2 trillion dollars.

Market value.PNGPercentage of GDP.PNG

Key Metrics

Metrics Value Explanation
Base Year 2017 Researched through internet

Market Risks

Retailers may face various risks while performing their business activity.

  1. Since there are more than 2000 retailers in U.S, there is an intense competition as these retailers offers same or similar product on the basis of price, quality and services.
  2. Today most people look for new shopping experiences so it is risk to the retailers as they need to add value like incorporating new technology and build a brand so that the customer visit the stores and have a awesome shopping experience.
  3. The retailers always look for new ideas in order to attract the customers, but some time when organizations try to change, resistance to change decreases.
  4. Today most of the retail industry in U.S uses technology so it is necessary for the retailers to maintain and improve the system continuously as technical fault leads to bad shopping experience.
  5. While shopping online, there may be loss of critical data which may impact customer services.
  6. As the retail industry in US is growing day by day so maintaining a proper supply chain is necessary.

Top Market Opportunities

Mean while, most of the retailers are using technology, there have been many cases of identity theft, critical information lost, and difficulty faced by customer while shopping online. So using advance technology like robots for online chat rooms, VR technology for better product view will create a better value and experience in order to create better the market opportunity in the future.

Market Drivers

The new government policy has reduced the corporate tax from 35% to 21 % on December 22, 2017. This significant transformation in this retail industry has increased GDP, wages and customer spending.

Industry Challenges

Stealing, shoplifting has been a serious issue in this industry even through high security measures. According to the National Retail Security survey, about 45% of the employee account for theft and 35% for shoplifting. The blunder made by the managerial and merchant deception around 12 to 5% to retail store losses.

  • Retailers usually ask for the customer credit card information on online platforms. Even through high security measure, the hacker’s steels credit cards numbers and other sensitive information. As a result, retails are still looking for better technology for safe online transaction.
  • Today customers are more demanding; customers don’t have patience to wait so the delivery of the product needs to be done more precisely at a right time, right place.

Technology Trends

These retail industries have top five technologies in today’s phase: Big data technology has been used by many retailers today. This technology has been able to improve personalized marketing, provides security to customer personal data, and helps to conduct store analytics for better store experience by providing real time feedback.

  • Many people have started using smart phone now, Mobile applications and mobile wearable’s has provided new shopping experiences. Customer can walk in the store with virtual reality goggles and try out things without touching them physically.
  • As retail shop has gone through digital transformation all the data produced from our “Internet of things” will become higher impact data for retailers. Thus, retailers will utilize this data make better personalize shopping experience by putting right product in right place at right time.
  • Many of the store warehouse have robot for supply chain and logistics. Now the companies have started using drone for the supply of product to its customer.

Regulatory Trends

Retail industry plays a crucial role in U.S economy as it support around 4.2 million jobs. Since U.S government has changed the policies, retail industry has been facing various positive and negative scenarios.

  • As the market is growing, economy today relay on various ports and channels but the policies has reduce its infrastructure plan for building roads, bridges and airports which has brought a huge chaos in the retail industry.
  • Retailers in U.S usually import goods from China, but the government has implemented 35% tariff on Chinese imports which result to increase in retail product.
  • The new government policy has reduced the corporate tax from 35% to 21 % on December 22, 2017. This significant transformation in this retail industry has increased GDP, wages and customer spending.

Other Key Market Trends

Today retail industry is shifting towards automation. This factor has brought a decline in retail employment. In 2017, retail industry just lost 101,100 jobs. There has also been an announcement plan to close 6879 stores as the shopper moves online.

Market Size and Forecast

After the economic crisis in 2008, retail industry has made a huge recovery. The retail industry has rose dramatically. Although there is an announcement of closing stores and decline in employment rate still the retail industry has the market size 5,733.4 billion dollars in 2017.

Top 3 Retail Companies in the USA on the basis of revenues (2017)

Revenue detail.PNG

Market Outlook

In this changing digital world, retailers will face many challenges in order to compete in the market place as the retailers need to adapt changing customer preference and expectation. The retailers need to keep an eye on the competitors in order to stay on the market. However, the sale for 2018 is expected to grow on non store sales. Overall it is expected to increase from 10 to 12 percent.

Technology Roadmap

Trend of using technology in retail industry is increasing and will continue to play a vital role in retailing. In 2018, the retailers will use the technology effective and efficiently and try to gain maximum from it. Data security will be quite challenging as retailers collect data from the customer. Retails need to be ready all the time in order to minimize cyber security risk since cyber insurance cover only cost but does not ensure reputational risk.

Customer today is more incline toward technology. They are always looking for new shopping experiences. Using of robot, digital assistance and use of Virtual Reality technology store may convince consumer buying behavior.

Competitive Factors

Since retail industry is in transition stage, retailers need to innovate new technologies and new customer experience while shopping. Thus, retailer who crosses this stage will stay in the competitive market otherwise they will have to leave the market.

Key Market Players


  • Founded: 1962
  • Headquarters: Arkansas
  • Employee: 1.5 millions
  • Revenue: 482.1 billion
  • Stores: 11,500 stores
  • Market value: $259,851.3 million
  • Top competitors: Target, Costco, Amazon

Sam Walton opened Walmart at the age of 44. The company offers every day low price service to its customers. Walmart is by far the largest retailer in US. According to Walmart, nearly 260 million people visit its 11500 stores every week. Last year Walmart invested $2,7 billions to promoted about 200000 people to jobs with more responsibility and higher pay.


  • Founded: July 1995
  • Headquarters: Seattle
  • Employee: 566,000
  • Revenue: $177.2 Billion
  • Market value: $880,056.2 Million

Amazon was founded by Jeff Bezos, his wife MacKenzie and Shel Kaphan. This company established its store and won award for top retailers both for online and offline in retail customer experience’s annual top retailers survey. They won this award because they are always innovating, pushing forward into new segments. They have also started using drone technology for delivery and Artificial intelligence. Now, the new data “one click retail” shows that Amazon is able to grab 4 percent of country total sales.

Further Reading

  1. (2018). Industries at a Glance: Retail Trade: NAICS 44-45. [online] Available at:
  2. [Percentage added to the Gross Domestic Product (GDP) of the United States of America in 2017, by industry (as a percentage of GDP)]. (n.d.). Retrieved August 11, 2018, from
  3. [Retailing]. (n.d.). Retrieved August 11, 2018, from
  4. [Total employed persons in the U.S. in 2017, by industry]. (n.d.). Retrieved August 11, 2018, from
  5. Anders, (n.d.). Retail Industry Expects More Sales Growth In 2018. Retrieved August 11, 2018, from
  6. Barrera, (2017, December 19). The Biggest Labor Market Trends in 2017. Retrieved August 11, 2018, from
  7. Bhushan Dhiraj, (2017, January 24). Giants Of Retail. Retrieved August 11, 2018, from
  8. Columbus Business First, Schwartz, Diamond, & Varma, (2017, April 14). How Trump’s trade policies affect U.S. retailers. Retrieved August 11, 2018, from
  9. D&B Hoover. (n.d.-a). Company Profile. Retrieved August 11, 2018, from
  10. D&B Hoover. (n.d.-b). Company Profile. Retrieved August 11, 2018, from
  11. Deloitte. (n.d.). 2017 retail, wholesale, and distribution industry outlook. Retrieved August 11, 2018, from
  12. GAYLOR, (2017, January). Trends and challenges for 2017. Retrieved August 11, 2018, from
  13. KPMG. (n.d.). Top Retail risks for 2017. Retrieved August 11, 2018, from
  14. Plunkett Research. (n.d.). U.S. Retail Industry Statistics and Market Size Overview. Retrieved August 11, 2018, from
  15. Quatrro. (2017, August 17). Top Three Challenges Facing Retail Industry. Retrieved August 11, 2018, from
  16. Schriever, (n.d.). Ranking the biggest industries in the US economy – with a surprise #1! Retrieved August 11, 2018, from
  17. Skorupa, (2008, August 19). Top 10 Oldest U.S. Retailers. Retrieved August 11, 2018, from
  18. Statista. (n.d.). Number of employees from 2007 to 2017. Retrieved August 11, 2018, from

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