Retailing can be distinguished in various ways from other businesses such as manufacturing. Retailing differs from manufacturing in the following ways:

- Location is a critical factor in retail business.
- There are a larger number of retail units compared to other members of the value chain. This occurs primarily to meet the requirements of geographical coverage and population density.
- In most retail businesses services are as important as core products.
- It is the only point in the value chain to provide a platform for promotions.
- A sale at the retail level is generally in smaller unit sizes.
-There is direct end-user interaction in retailing.

  The various characteristics features of retailing are:

1. Point-of-Purchase Display

            A significant relevant chunk of retail sales comes from unplanned or impulse purchases. Therefore, display, point-of-purchase merchandise, store layout and catalogues become important. Impulse goods like chocolates, snack foods and magazines can sell much more quickly if they are placed in a high visibility and high traffic location.”.

2. Larger Number of Retail Business Units

            Location of retail store plays an important role compared to other business units. Retailers consider factors like potential demand, supply of merchandise and store image-related factors in locating the retail outlet. The number of operating units in retail is the highest, primarily to meet the needs for geographic reach and customer accessibility.

3. Direct Interaction with Customers

            Retail businesses have a direct interaction with end-users of goods or services. They act as intermediaries between consumers and suppliers who may be wholesalers or manufactures. Therefore, they are in a position to effectively communicate the response and changing preferences of the consumers to the suppliers or sales persons of the company. This helps the manufactures and marketers to redefine their product and change the components of its marketing strategy accordingly.

4. Lower Average Amount of Sales Transaction

            Many consumers buy products in small quantities for household consumption. Due to lower disposable incomes, some consumer segments in India even buy grocery items on a daily basis rather than a weekly or a monthly basis. Inventory management becomes a challenge for retailers as a result of the many minor transactions with a large number of customers. Hence, retailers must take care of determining average levels of stock, order levels and the popularity of different brands.