What is a chain store? For many people, shopping like housework is hard and tedious. For others, shopping is a relaxing pastime and activity that frees them from the world of work. But the question is, where should we buy? From big stores or small shops? What are the strengths and weaknesses of these two shopping methods? Read this article to know more about the advantages and disadvantages of chain stores.
It is very difficult to imagine life today without buying from chain stores. The owners of these stores try to make them feel comfortable from the moment the buyers get off the car or bus that takes them to the chain store. Relaxing music is played everywhere, security cameras monitor the store from time to time, and everything is perfectly clean, even the air conditioning system constantly freshens the air inside the building.
One of the reasons for the popularity of chain stores is the large number of shops under one roof.
There are many department stores and chain stores. A very important part of chain stores are smaller shops and boutiques whose glamor attracts shoppers. In these shops, people can find books, expensive Chinese goods, designer clothes, comfortable clothes, and so on. Each chain store has different sections for products such as meat, fruits and vegetables, biscuits and cakes, canned food, tea, coffee and beverages, and washing powder. Most products are pre-marketed, packaged, weighed and priced in department stores. Chain stores provide you with a convenient and fast shopping experience.
Shopping without interruption can be tedious, but there are many things you can do in a chain store. Many people who go to these stores to shop, eat or drink or talk to their companions go to the many coffee shops and restaurants that exist in these centers.
It is a fact that children hate to be dragged from side to side when shopping in a store, and this is definitely another reason why chain stores are so popular, because children are not forgotten in them. Playgrounds, animal shows, cinemas or skating rinks are just a few examples of the entertainment that chain stores provide for children.
Of course, these features have only one reason: to create the belief in buyers that they need items that they did not intend to buy but have a good discount, and should buy them. The customer may use a credit card for large purchases.
As a result, the Land Chain Store seems to be a dream come true for kids and adults alike. We can come here to escape the misery, the cold winters or the unbearable heat of summer.
However, many people still prefer to buy from the same small old stores.
Let’s be honest, life without chain stores will be hell. We should be thankful for them, something that used to take a whole day, now it only takes a few hours. Thirty years ago, you had to walk up and down the street, visit a collection of shops, stand in line to buy and pay, and by the time you finally got home with a few shopping bags, it was already night. And of course, at that time, shops were only open from 9 am to 5 pm.
Chain stores are now open longer to meet customer needs, and even open on holidays. The variety of products is astonishingly high. Chain stores now offer more than 40,000 products to customers, ranging from affordable products to specialty products at competitive prices. In these stores, it is possible to use free parking and other facilities such as financial services. In addition, these stores also sell extraordinary products under their own brand name and also have home delivery and online shopping.
Usually none of us have to drive long distances to find a chain store, we can see them outside the city or on the main streets of the city. Some retailers are looking for more convenient locations, such as train stations. Thirty years ago, people were dying to buy from these shops, but today they are no longer very interested in it.
Advantages and disadvantages of chain stores
The job of retailers is to buy items in bulk and take advantage of the low price of wholesale buying and selling it in small volumes and at higher prices. Retailers are the intermediary between the manufacturer or wholesaler and the customer who buys the goods. Large-scale retailing, such as chain stores and very large stores, has many advantages, but they also have disadvantages.
Broad-scale retail benefits
- Economic savings
Economic savings occur when business returns grow faster and faster than costs. Businesses make a profit based on their size. Note that costs can be divided into fixed and variable costs, there are fixed costs regardless of production, and variable costs depend on the rate of return. In larger companies, higher returns can cover fixed costs. For example, in addition to the variable costs of buying products, the retailer must also pay for shipping products to his shop. As larger retailers order more products, shipping costs are split over more goods. In this way, larger retailers benefit from a higher purchase advantage and lower labor costs.
While small retailers have to decide for themselves all aspects of the business, larger retailers can hire experts in buying, selling, finance and marketing. Having people who spend their time entirely on specialized maps has a positive effect on efficiency and leads to more profit and development.
- Providing door to door delivery services to the customer
People can be hired to deliver door-to-door purchases to deliver orders for more than a few items to the customer. More profit from more orders, and fewer orders from customers who live close together, cover the cost. These features will attract more customers, introduce the business to new concepts such as telephone or online sales, and increase business credibility.
- Special offers and sales discounts
Retailers with special offers and discounted prices try to attract more customers and have more sales. Large retailers are more likely to be able to offer such discounts than smaller retailers.
- Investing in new technologies
Technology makes business easy, but it requires more initial investment. Large retailers have more money for such investments, and this money is offset over the years by cost savings and greater efficiency. The volume of daily transactions of a large retailer, and possibly more stores across the country, makes investing in technology an undeniable necessity for staying competitive and providing accurate and timely information for effective business management.
- low price
In chain stores, goods are available at relatively lower prices because they buy goods in bulk and have high sales. This reduces the cost of sales management and they can make less profit from the customer.
- Fast and high sales
Chain stores can attract more customers due to their special features. Customers flock to chain stores for cheap prices and plenty of options. As a result, these stores can sell their products quickly and in large volumes.
- Low business administration costs
Chain stores have relatively low administrative costs. Except for a few cases, they do not provide free services to customers. Their goal is to provide cheap goods to customers. They hire the fewest retailers needed, so you can run chain stores at the lowest cost.
- Freedom of choice without the intervention of the seller
In chain stores, customers have to choose the product themselves. They are given more freedom of choice and as a result customer satisfaction increases. This freedom is more suitable for customers who do not like the intervention of the seller.
- Predict more profits
Chain stores can predict higher profits because they buy in large volumes and sell in low volumes. In addition, they have very low administrative costs and do not provide free customer service. As a result, they automatically make more profit.
Disadvantages of large-scale retailing
- Less ability to provide individual services
A small retailer may know all of its customers because it is constantly interacting with them. He knows the tastes and desires of these customers so he can provide them with better personal services that are more suitable for their unique needs. A big retailer can’t do that because his goal is to sell and sell and sell. In such a large business, time is equivalent to money, and the faster the sales, the more profit is made. Small, specific orders are rarely accepted by customers, especially if they do not meet the rate of return that these businesses expect. In large stores, the customer may be no more than one, but in a small retailer, an old customer is valuable.
- Labor problems
The fact is that over time, the pressure on the workforce of department stores is shifted because they are expected to do a lot of work in a short time. Most tasks are repetitive and rarely involve conversations with clients or other colleagues. This weakens the work ethic, and the cost of hiring and retaining employees will increase if employees resign regularly.
- Less control over petty theft
In a large environment with thousands of pens, it is difficult to take care of all the places to prevent theft. Large retailers are always faced with the problem of small thefts from shelves.
It is necessary to install CCTV cameras, but it costs a lot to hire people who are present in all the corridors and are careful not to put any goods in their bags or clothes. People are more tempted to steal in chain stores than in smaller shops, because people are easily identified in the shops. Also, thieves may find it difficult to detect small thefts in large stores, as there are so many items in their stores. People who steal from shops usually do so more in large stores than in small shops. As a result, the business is facing a losing situation that must either invest in security or make small losses.
- It takes a lot of capital
It takes a lot of money to set up a chain store. You can’t run department stores anywhere. Finding the right place to set up these stores is difficult and will cost a lot.
- Not suitable for all products
Only some products that customers know well can be sold in chain stores. It is necessary for carpet weavers to introduce some products to the customer in order to find out about it. As a result, products that are not well known to customers cannot be sold in chain stores.