Often, people use the terms retail and business interchangeably. But retail and business are two different terminologies. In order to understand this difference, retail and business management can be examined on three key grounds – concept, process, and role.
Retail is only a functional part of a business. Business is a broader term and may comprise various functions like manufacturing, supply chain, marketing, retail, HR, finance, administration, etc. Activities involved in managing the retail operations of a business enterprise falls under the ambit of its retail management. The scope of business management will not only include retail management, but also the management of other functions like HR, marketing, finance, production, etc. However, in small and medium scale enterprises, the functional departmentation is limited and overlapping. Especially, in small-scale enterprises like grocery stores, mom and pop stores, general or Kirana stores, the functional divisions are not apparent and such roles and responsibilities are shared or carried out by the owner(s) themselves or delegated to the store assistants. But even in these stores, the functional activities do exist (payment of wages and salaries for staff, day to day accounting activities like maintaining journals and books of accounts, procurement of goods from suppliers and distributors and merchandising and so on).
For example, let’s say an XYZ company is in clothing business that manufactures its own apparels and also runs its own retail stores to sell its products. The activities involved in managing its retail stores or retail operations fall within the ambit of retail management. Whereas the overall control and administration of the company’s business (which includes all the functions like manufacturing, supply chain, HR, finance, retail) can be referred as business management. Thus, management of retail function is only a component of business management. In the same example, if the manufacturer and retailer were two different entities, the latter’s business would have been referred as a retail business. Since retailing is also a business, the retailer would still carry out all the applicable functions of his business (retail, manpower, accounting, procurement etc.)
Companies adopt business process management to smoothly streamline, optimize and execute its various functional processes. Business process management enhances functional integration and improves the efficiency and effectiveness of its functional processes while aligning them with the organizational goals and objectives. The principles and model of business process management can also be applied to the retail function and retail operations.
Business management of a retail enterprise comprises several key functions which include logistics and supply chain, retail, merchandising and store operations, marketing, HR, finance, information system, and analytics, etc. And each of these functions is carried out as a process with interdependencies with other functions and processes. Retail process management streamlines and optimizes the various functional processes of retail management, keeping in mind the strategic goals and objectives of a retail business enterprise.
Business process management encompasses all the key functional processes including retail. From the perspective of BPM, retail is viewed and executed as a process. But retail itself is comprised of several sub-functions which are managed as integrated processes. This is where retail process management comes into the picture.
Role and Skill Difference
Retail is a specific process with a specific set of roles and responsibilities requiring a specific set of knowledge, skills, and expertise. A retail manager needs to focus on the operations of the retail store which includes store management, ensuring availability of goods, maintaining standards of merchandising, customer service, accounts, reporting and information system, staff management etc in that particular store. The same retail manager might be reported to the owner of the business enterprise or a superior authority who could be in charge of the overall functioning of the business. This superior authority needs to possess the general knowledge, skills, expertise, and competencies of all the areas of business management like manufacturing, supply chain, marketing and retail, HR, finance etc.
Retail management is a part of business management; is one of the business functions and is viewed as a business process. This is the crux of all the differences that exist between retail and business management. However, these differences get shadowed in retail stores where the majority of the focus remains on retail management and retail operations like visual merchandising, customer attraction and footfall, billing and accounting, staff management, inventory, and transportation etc.