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Chapter 3 multichannel retailing

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Chapter 3 multichannel retailing

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Chapter 3 multichannel retailing

  1. 1. RETAIL CHANNEL • MOST COMMON CHANNEL • WAY RETAILER’S SELL + DELIVER MERCHANDISE + SERVICES TO ITS CUSTOMERS. • THEY ALSO USE A VARIETY OF NONSTORE CHANNELS WHICH ARE LISTED BELOW: • INTERNET TELEVISION HOME SHOPPING • MOBILE DIRECT-RESPONSE TV • CATALOGS AND DIRECT MAIL AUTOMATED RETAILING (VENDING MACHINES) • DIRECT SELLING
  2. 2. CHANNELS • OPPORTUNITY TO COMPLETE A TRANSACTION- SELL + DELIVER MERCHANDISE • PRIMARY OBJECTIVE IS TO COMPLETE TRANSACTIONS • MEDIUM • PRIMARILY USED TO COMMUNICATE INFO TO CONSUMERS
  3. 3. MULTICHANNEL RETAILING • ABILITY TO USE MORE THEN ONE CHANNEL TO SELL + DELIVER MERCHANDISE + SERVICES TO CONSUMERS • OMNI RETAILING • COORDINATED MULTICHANNEL RETAIL OFFERING THAT PROVIDES A SEAMLESS CUSTOMER EXPERIENCE WHEN USING ALL OF THE RETAILER’S SHOPPING CHANNELS
  4. 4. THE BIRTH OF MULTICHANNEL RETAILING • 1925- SEARS OPENED ITS FIRST STORE, 33 YEARS AFTER IT LAUNCHED ITS CATALOG OFFERING MERCHANDISE PREVIOUSLY UNAVAILABLE TO THE AMERICAN POPULATION ASA WHOLE.
  5. 5. INTERNET RETAILING • RETAILING INTERACTING WITH CONSUMERS THROUGH THE INTERNET • ELECTRONIC CHANNEL- USING INTERNET THROUGH A TRADITIONAL COMPUTER • MOBILE CHANNEL- USING THE INTERNET THROUGH A SMART PHONE
  6. 6. CATALOG CHANNEL • NON-STORE RETAIL CHANNEL OFFERING COMMUNICATION THROUGH CATALOGS MAILED TO CUSTOMERS
  7. 7. DIRECT- RESPONSE TV CHANNEL • CUSTOMERS WATCH TV AD’S THAT DEMONSTRATES THE MERCHANDISE + THEN GIVES A WAY FOR CUSTOMERS TO PLACE ORDERS FOR THAT MERCHANDISE • INFOMERCIAL- 30 TO 60 MINUTES LONG MIXING ENTERTAINMENT WITH PRODUCT DEMONSTRATIONS • COMMERCIAL- 1 TO 2 MINUTES IN LENGTH GIVING A BRIEF OVERVIEW OF THE PRODUCT
  8. 8. TELEVISION HOME SHOPPING CHANNEL • RETAIL CHANNEL WHICH THE CUSTOMERS WATCH THETV NETWORK WITH PROGRAMS THAT DEMONSTRATE MERCHANDISE + THEN PLACE ORDERS FOR THAT MERCHANDISEUSUALLY BY PHONE OR THE INTERNET • HSN + QVC • ANNUAL SALES ABOUT $20 BILLION • ADVANTAGE- ALLOWS CUSTOMER TO SEE HOW THE PRODUCT WORKS AND DEMONSTRATIONS THAT PERSUADE THE CUSTOMER TO BUY IT.
  9. 9. DIRECT SELLING CHANNEL• SALESPEOPLE INTERACT WITH CUSTOMER FACE- TO – FACE IN A CONVENIENT LOCATION • AT THEIR HOME • AT THEIR WORK • PARTY PLAN SYSTEM • PARTY TO TRY THE PRODUCT AND SEE WHAT IT LOOKS LIKE • EXAMPLE: AVON, 31, PARTY LIGHT, • MULTILEVEL SYSTEM • INDEPENDENT BUSINESS PEOPLE SERVER AS DISTRIBUTORS • EXAMPLES: THRIVE, SCENTSY • PYRAMID SCHEME • FIRM AND PROGRAM ARE DESIGNED TO SELL MERCHANDISE + SERVICES TO OTHER DISTRIBUTORS, RATHER THAN END-USERS
  10. 10. PYRAMID SCHEME
  11. 11. AUTOMATED RETAILING (VENDING MACHINES) CHANNEL • MERCHANDISE OR SERVICES ARE STORED IN A MACHINE + DISPENSED TO CUSTOMERS WHEN THEY DEPOSIT CASH OR USE A CREDIT CARD • PLACED AT CONVENIENT, HIGH TRAFFIC LOCATIONS • SLOWLY DYING AND SOON WILL BE DECEASED
  12. 12. BENEFITS OF THE STORE CHANNEL • TOUCHING AND FEELING PRODUCTS • PERSONAL SERVICE • RISK REDUCTION • IMMEDIATE GRATIFICATION • ENTERTAINMENT AND SOCIAL EXPERIENCE • BROWSING • CASH PAYMENT
  13. 13. BENEFITS OF CATALOG CHANNEL • SAFETY AND CONVENIENCE • BROWSE AND ORDER MERCHANDISE 24/7 • EASY REFERENCE
  14. 14. BENEFITS OF INTERNET CHANNEL • DEEPER AND BROADER SELECTION • MORE INFORMATION FOR EVALUATING MERCHANDISE • PERSONALIZATION • EXPAND MARKET PRESENCE • PROVIDE INFORMATION TO COMPARE SHOPPING EXPERIENCE ACROSS CHANNELS • PERCEIVED RISKS IN INTERNET SHOPPING
  15. 15. COMPARISON OF ELECTRONIC AND MOBILE PHONE CHANNELS Electronic Mobile Stationary Portable Large Display Small Display Non-location aware Location aware Hit and Miss with technology Touch technology
  16. 16. CHALLENGES: MULTICHANNEL SUPPLY CHAINS AND INFORMATION SYSTEMS • STRUGGLE TO PROVIDE AN INTEGRATED SHOPPING EXPERIENCE • DISTRIBUTION SEPARATE FROM RETAIL • PUTTING TOGETHER A GOOD SYSTEM
  17. 17. CENTRALIZED VS. DECENTRALIZED MULTICHANNEL RETAILING • CENTRALIZED: SAME ALL AROUND • DECENTRALIZED: TAILORING TO DIFFERENT TARGET MARKETS
  18. 18. CONSISTENT BRAND IMAGE ACROSS CHANNELS • THE MESSAGE IN THE STORE, ADS, AND WEB/OTHER RETAIL CHANNELS SHOULD BE THE SAME • EXAMPLE: LIBERTY TAX, MICHELIN TIRES, GRANITE, ECT.
  19. 19. MERCHANDISE ASSORTMENT • NARROW ASSORTMENT IN STORE, BROAD ONLINE • STORE CHANNELS BETTER SUITED FOR TOUCH AND FEEL • EXAMPLES: TRY STUFF USING THE 5 SENSES • INTERNET CHANNEL IS MORE FOR LOOK AND SEE • EXAMPLE: PRICE AND COLOR
  20. 20. PRICING • EXPECT PRICES TO BE THE SAME ACROSS THE BOARD • SOMETIMES PRICE ADJUST FOR COMPLETION • EXAMPLE: BARNS AND NOBLE
  21. 21. REDUCTION OF CHANNEL MIGRATION • CHANNEL MIGRATION • CONSUMER GATHERS INFORMATION ON IDEAS FROM ONE CHANNEL AND PURCHASE THE PRODUCT FROM A COMPETITORS CHANNEL • MOST COMMON IS SEARCH ONLINE FOLLOWED BY PURCHASE IN STORE • 78% OF PEOPLE DO THIS • SHOWROOMING • GOES TO STORE TO LEARN ABOUT BRAND OR PRODUCT THEN SEARCH INTERNET FOR THE SAME PRODUCT WITH A LOWER PRICE.
  22. 22. HOW A RETAILER CAN REDUCE SHOWROOMING • 1. PROVIDE BETTER CUSTOMER SERVICE • 2. OFFER RELEVANT INFORMATION BASED ON DATA THE RETAILER HAS COLLECTED ABOUT THE CUSTOMERS • 3. PROMOTING PRIVATE-LABEL MERCHANDISE THAT CAN BE PURCHASED ONLY FROM THE RETAILER
  23. 23. THE FUTURE OF MULTICHANNEL RETAILING

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