Chapter 3 multichannel retailing
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This document discusses retail channels and the rise of multichannel retailing. It outlines various retail channels including store, catalog, internet, mobile, television home shopping, and direct selling. It then discusses the benefits and challenges of multichannel retailing, including providing a seamless customer experience across channels and integrating supply chains and information systems. It also covers issues like maintaining a consistent brand image, pricing consistently, and reducing "showrooming" where customers use stores to explore options but purchase elsewhere.
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Chapter 3 multichannel retailing
- 2. 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
- 3. CHANNELS • OPPORTUNITY TO COMPLETE A TRANSACTION- SELL + DELIVER MERCHANDISE • PRIMARY OBJECTIVE IS TO COMPLETE TRANSACTIONS • MEDIUM • PRIMARILY USED TO COMMUNICATE INFO TO CONSUMERS
- 4. 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
- 5. 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.
- 6. 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
- 7. CATALOG CHANNEL • NON-STORE RETAIL CHANNEL OFFERING COMMUNICATION THROUGH CATALOGS MAILED TO CUSTOMERS
- 8. 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
- 9. 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.
- 10. 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
- 11. PYRAMID SCHEME
- 12. 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
- 13. BENEFITS OF THE STORE CHANNEL • TOUCHING AND FEELING PRODUCTS • PERSONAL SERVICE • RISK REDUCTION • IMMEDIATE GRATIFICATION • ENTERTAINMENT AND SOCIAL EXPERIENCE • BROWSING • CASH PAYMENT
- 14. BENEFITS OF CATALOG CHANNEL • SAFETY AND CONVENIENCE • BROWSE AND ORDER MERCHANDISE 24/7 • EASY REFERENCE
- 15. 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
- 16. 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
- 17. CHALLENGES: MULTICHANNEL SUPPLY CHAINS AND INFORMATION SYSTEMS • STRUGGLE TO PROVIDE AN INTEGRATED SHOPPING EXPERIENCE • DISTRIBUTION SEPARATE FROM RETAIL • PUTTING TOGETHER A GOOD SYSTEM
- 18. CENTRALIZED VS. DECENTRALIZED MULTICHANNEL RETAILING • CENTRALIZED: SAME ALL AROUND • DECENTRALIZED: TAILORING TO DIFFERENT TARGET MARKETS
- 19. 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.
- 20. 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
- 21. PRICING • EXPECT PRICES TO BE THE SAME ACROSS THE BOARD • SOMETIMES PRICE ADJUST FOR COMPLETION • EXAMPLE: BARNS AND NOBLE
- 22. 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.
- 23. 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
- 24. THE FUTURE OF MULTICHANNEL RETAILING