3. Retail Channel
A retail channel is the way a retailer sells
and delivers merchandise and services to
its customers
4. Different Types of retail channels
Internet Channels (Online
retailing, electronic retailing, or e-tailing)
Catalog Channel
Direct Selling
Television home shopping
Automated Retailing
5.
6. Internet Channel
Isa retail channel in which the offering of
products and services for sale is
communicated to customers over the Internet.
More than one quarter of apparel shoppers
look up basic info about stores-
hours, location, special events, phone number
22 percent research merchandise
21 percent compare prices
21 percent download coupons
7. Catalog Channel
Is a non-store retail channel in which the retail
offering is communicated to customers though
a catalog mailed to the customer.
About half of U.S. consumers shop though
catalogs each year
Firms spend millions of dollars mailing catalogs,
that account for only 3 percent of the roughly
80 million tons of paper products used
annually. (More than either magazines or
books)
8. Direct Selling
Is a retail channel in which sales people interact
with customers face-to-face in a convenient
location, either at the customer’s home or at work.
Direct salespeople demonstrate merchandise
benefits and/or explain a service; take an order;
and deliver merchandise.
Highly interactive
U.S. sales through direct selling are over $30 billion
Largest merchandise selling is
cosmetics, fragrances, cooking, kitchenware, weig
ht loss products, vitamins, and books, videos, or
toys.
9. Television Home Shopping
Isa retail channel in which customers watch a
television program that demonstrates
merchandise and then place orders for that
mercahndise, usually by telephone, internet, or
TV remote.
10. 3 types of TV Shopping
1. cable channels dedicated to television
shopping
2. infomercials (programs, typically 30 to 60
minutes long that mix entertainment with
product demonstration and then solicit orders
placed by telephone)
3. Direct-response advertising (consists of one-
t0 two- minute advertisements on television or
radio that describes products and provides an
opportunity for consumers to order them)
11. Automated Retailing
Is a retail channel in which merchandise or
services are stored in a machine and
dispensed to customers when they deposit
cash, or use a credit card. (Vending
machines)
Examples: Redbox, Proactive, iPods, Sony
products, Rosetta Stone, cosmetics.
Redbox has 150 million people every week
walk within 10 feet of one of its vending
machines.
12. Benefits of Retail Channels
Store Channel - -
Touching/Feeling Products
Personal Service
Risk Reduction
Immediate Gratification
Entertainment and Social Experience
Browsing
Cash payment
14. Benefits of Retail Channels
Internet Channel - -
Broader/Deeper Assortments
Time to Evaluate Merchandise
Personalization
Perceived Risks
15. Benefits of Multichannel
Retailing
Overcoming the Limitations of an Existing
Format
Increasing Customer Satisfaction and
Loyalty
Gaining Insights to Customer Shopping
Behavior
Expanding Market Presence
Building a Strategic Advantage
17. Which Channel has the lowest
cost?
Electronic or Store??????
Store!!!
Why?
18. Disintermediation
Whena manufacturer sells directly to
consumers, bypassing the retailers.
They lack the skills and are less efficient at
performing retailing functions.
Retailers can provide a broader array of
products and services.
Some manufacturer’s use their website as a
marketing tool to show customers their
available products.
19. Challenges of Effective
Multichannel Retailing
Retailers can benefit from
using multichannel
synergistically. They do this
by using one channel to
promote the service
offered by the other
channels.
Retailers can benefit by
using their stores as
“warehouses” for pick or
delivery of items ordered
online.
20. Providing an Integrated
Shopping Experience
Operational differences cause many
multichannel retailers to have separate
organizations for each channel. However,
the trend is to integrate these channels
together to make sure that when there is
a sale or discount that each channel has
the same sale or discount.
23. Shopping in the Future
Page 74 has a great little conversation about how
future shopping will be!
I read it and slightly felt that we use some of the
technologies already
A customer database that will save all of your
purchases and add like suggestions for the next
time
-Search engine
-Retailers Website
Available merchandise, check status of
alterations, decision of having merchandise
delivered to home,
New technologies – self checkout, personalized
virtual reality displays
Touch/Feel - - You can use your 5 senses, touching, smelling, tasting, seeing and hearingTo evaluate the products before you buy them.. Online you cant feel the products like you could if you were at the store purchasing themPersonal Service - - Personalized services from store associates. They can help youRisk Reduction - - Less risk that purchased products will be incorrectImmediate gratification - - you can get your merchandise immediately when you buy it from the store.. Don’t have to wait for it to get shippedEntertainment and Social Experience - - Interaction between sales associates or friends that you go shopping with. Browsing - - Easier to browse in stores to find the perfect item you are looking forCash Payment - - Immediate transaction and doesn’t result in potential interest or excessive debt
Safety - - security in malls and shopping areas becoming important especially to the elderly. Convenience - - You can look at the merchandise 24/7 on your own time whenever you want. easier to browse through than websites
Broader/Deeper Assortments - - higher range of products.. A store may not have your size but if you order online they will look at all the other stores in the country and see if they have your correct size or colorTime to Evaluate Merchandise - - Provides you with information to help made a better buying decisionPersonalization - - you may be able to personalize your merchandise , if you order and Ipod online through Apple.. You get free engraving on the back..Percieved risks - - people are concerned for the security of credit card transitions on the internet and they are also concerned about privacy violations
Overcoming the Limitations of an existing format - - Increased assortments - - better satisfy customers Low – Cost , Consistent Execution - - Current Information - - Internet can be updated while a catalog cant be unless they send out a new catalog.Increasing customer satisfaction/ loyalty - - Give the customer the option of shopping in store or online.. Gaining Insights to customer shopping behavior - - information on how customers shop at a store for merchandise is helpful to know to better what they would likeExpanding Market Presence - - by adding an electronic channel such as internet, can help expand marketing.. More people can be awareBuilding a Strategic Advantage - - information about customer purchase history and shopping behavior .andd. unique “how-to” knowledge about coordinating operational activities across channels
2 important issues that multichannel retailers face are……
Although you may think that electronic would be the cheaper it indeed can be even more expensive then the store channel. Why??? Because the retailer incurs significant costs to design maintain and refresh a website. They must attract customers to their site and maintain distribution systems and warehouses dedicated to fulfilling orders from customers. They also deal with a high level of returns.
Will manufacturer’s do this? Most won’t because………………………first dash…………………and because retailers have more expertise and are good at collecting and using info about costumers. …………………second dash………..
Consumers want to recognized by a retailer wheather they interact with a sales associate or kiosk in a store, log onto their website or contact their call center. They want to buy online but pick up or return in store.
This is a challenge for retailers because it takes unique skills and resources to manage each channel.
Due to the rapid growth of mobile phone usage and shopping via your mobile phone it is important that multichannel retailers support this but since most retailers websites don’t accomidate the small screen and slower download speeds of a cell phone this is something that is being worked on. To the right is an example of an I phone app from Macy’s called Macy’s Ishop. From this app you can shop just like you would if you were on a regular computer.
Customer databases are used to house complete history of each customers interaction with the retailer. This helps create a seamless experience for the customer. Retailers need to offer a consistent brand image for all of their channels. Typical different assortments of products are appropriate for each different channel. For example for some retailers the clothes they offer online might be different or of more assortment then what they offer in store. This usually happens because they offer more product then what they have space for in a store front. Pricing presents another challenge for multichannel retailers bc customers want pricing to be consistent among each different channel. However multichannel retailers have to adjust their pricing due to different kinds of competition in different channels. This can also cause some challenges bc with the technology we have today people can do price checking online. Channel migration is when a consumer goes to say walmart.com and finds a product they want but then purchases the product from target.com because of multiple reasons. Cheaper shipping or cheaper prices. Two ways to reduce this are to offer uniquely relevant info based on the proprietary data the retailer has collected about the customer and promote private label merchandise that can be purchased only from the retailer.