What is a Mass-Market Retailer
A mass-market retailer is a company that sells affordably priced products that appeal to a wide variety of consumers. Mass-market retailers are not necessarily known for selling durable, high-quality merchandise or for having exceptional customer service, but they do meet consumers' wants and needs, at reasonable prices.
Examples of mass-market retailers include big box stores such as Target, Sam's Club and Best Buy, as well as brands like Levi Strauss and Gap, and e-retailers like Amazon. Supermarket, drugstore, mass merchandise and warehouse chains, are all considered mass-market retailers.
BREAKING DOWN Mass-Market Retailer
By contrast, luxury retailers sell products targeted at wealthy consumers, who purchase upscale items. These products tend to be out of reach, financially, for the average consumer, although aspirational consumers may purchase them anyway, and are associated with higher quality and superior customer service. Examples of luxury retailers include Bergdorf Goodman, Barney's, Tiffany and Saks.
Sales of merchandise through mass-market retailers represent a substantial portion of revenue generated from consumer goods and grocery purchases in the United States. In other countries, there may be a prevalence for smaller retailers who serve communities and local regions. However as more cities worldwide become more densely populated, mass-market retailers may seize the opportunity to establish themselves in such markets.
The Depth and Reach of Mass-Market Retailers
Though local merchants in the U.S. represent a staple part of the economy, mass-market retail chains have established themselves as the predominant sellers of consumer goods in the country. The concentration of a wide variety of goods at discount prices in one location provides a convenience for consumers who want to combine different types of purchases into one trip to a store.
Mass-market retailers may be able to sell products at lower prices than individual, private retailers because of their overall buying power. This stems from the volume of goods that mass-market chains move through the channel compared with privately-owned retailers that may only have one location. Furthermore, the size of each mass-market retail store can be significantly larger and sell more volume than a privately-owned store.
Product mix is one way for mass-market retailers to be competitive with each other. There may be specific brand items that a mass-market retailer sells that are not available through rival stores.
The dynamics of mass-market retail have evolved with online commerce. Big box retailers continue to dominate in the overall mass-market retail space; however, the growth and reach of Amazon, in particular, have compelled brick-and-mortar retail companies to become more competitive online as well.