2. Retail Channels
The
way the retailer sells and delivers
merchandise and services to its customers
Internet Channel
Catalog Channel
store
internet
catalog
direct selling
TV home shopping
Automatic
89.89%
Direct Selling
Television Home Shopping
Automated Retailing
0.90%
4.70%
0.50%
0.90%
3.10%
3. Internet Retailing
AKA
Online retailing
Electronic retailing
E-Retailing
Retail
channel in which the offering of
products and/or services for sale is
communicated to customers over the
internet.
Retailers using this channel dominate
4. Internet Channel Info.
Facts
Accounts for 10% of retail sales
¼ Look up Basic information about stores
22% research
merchandise
21% compare prices
21% download coupons
for use in stores
5. Catalog Channel
Non store retail channel in which the retail offering
is communicated to customers through catalogs
each year.
Main products sold through catalogs
Beauty products
Drugs
Computers and software
Clothing and accessories
Furniture
Books and magazines
Music
6. Catalog Channel Info.
1.3%
of catalogs result in a direct sale
3%
of 80 million tons of paper used to
produce. More than magazines or books.
View
by many as a waste
of resources
Declining
Role
in market share
changing to drive
traffic to the internet
7. Direct Selling
A
retail channel in which sales
people interact with the
consumers face-to-face in a
convenient location, either at
the consumers home or at work.
Sales person explains FAB of
product to consumer
Very costly to train and maintain
information on products
8. Direct Selling Info.
$30 billion US; $100 billion World Wide
Two types of Direct selling
Party Plan system – Throw a party to
sell products
Multilevel system – Independent
business people recruit other people
to become distributers under them
Watch out for pyramid schemes
9. Direct selling Info
Almost
all 14 million people working in
direct selling are independent agent.
Largest Categories
Personal care
Home and family
Wellness
Leisure
Educational items
10. Television Home Shopping
A
retail channel in which consumers
watch a television program that
demonstrates Merchandise and then
places orders, usually by phone internet or
the TV remote
11. TV Home Shopping Info.
Infomercials
- are programs dedicated
that mix entertainment with product
demonstrations then solicit orders place
by phone. 30 to 60 mins
Direct
response advertising – one or two
min advertisements on TV or radio
offering opportunity to order.
12. TV Channel Info Cont.
Top
Retailers
HSN
QVC
Shop NBC
Jewelry Television
Majority
of viewers who actually watch
don’t do it regularly nor actually purchase
products or services
13. Automated Retailing
Is a retailing channel in which merchandise or
services are stored in a machine and
dispensed to customers when they deposit
cash or use credit.
Vending machines are typically placed in
convenient , high-traffic locations such as
workplaces, malls, airports, or universities.
14. Auto. Retailing Info.
Airports
Show case
ZoomShops
Sony Products
Proactive
Rosetta Stone
Local
Redbox DVD rental
Soda and Candy Machines
15. Store Channel Benefits
Touching
Personal
Risk
and feeling
service
reduction
Immediate
gratification
Entertainment
and social experience
Browsing
Cash
payment
16. Catalog Channel Benefits
Safety
Convenience
Reference off coffee table
Take it to the beach
Internet
through cell phone provides
dipping into this channel
17. Internet Channel Benefits
Broader
and deeper assortments
More
timely information for evaluating
merchandise
Personalization
Cookies
Memberships
Format information
18. Net Channel Benefits Cont.
Side
by side comparison
Instant alternatives
Live chats
Recommendations
ATG has number crunching soft ware that
recognizes characteristics of times of
day, gender location in consideration
iShop
19. Net Channel Issues
Loosing
sales to applications that find the
lowest price
Perceived risk with electronic shopping
Credit cards and internet concerns
CC
companies offer protection
Potential privacy exposure
Breaches kills retailers reputation
Data mining and how its used or sold
20. Benefits of Multi Channel
Retailing
Overcoming
format
the limitations of an existing
Increase assortment
Low cost, consistent execution
Current information
Increase
loyalty
customer satisfaction and
22. Benefits of Multi Channel
Retailing Cont.
Gaining
insight into customers shopping
behavior
Up-sell other products
Cookies develop patterns for
recommendation
Expanding
market presence
Limited retail locations
Rural market access
23. Benefits of Multi Channel
Retailing Cont.
Building
priority information about
consumer behavior and purchase history
Conventional cant link purchases to
purchases
Unique
“how-to” knowledge about
coordinating operational activities
Synergistically coordinate different
channels
24. Other Multi-Channel Retailing
Issues
Which
channel has the lowest cost
Typically E sells
Can be more expensive than a outlet
Website
development maintenance
Advertising
Distribution System
Dedicated warehouses
High level of returns
25. Other Multi-Channel Retailing
Issues
Will manufactures bypass retailers and sell
directly
Disintermediation occurs when manufacturer
sells directly to consumers, bypassing retailers
Why wont this happen
Retailers have more experience in marking to
the end consumer
Provide a broader array of products
Timing and matching of different manufacturer
products
Loss of support of retailers
26. Challenges of Effective Multi
Channel Retailing (CEMCR)
Consumers want recognition in
all channels
Use one channel to
communicate the other
channels through cross
promotion
Cross expenditures
Warehouse at stores
Returns at stores
Store Pickup to save on shipping
costs
27. Challenges of EMCR
Broken Down
Providing an integrated Shopping experience.
Distribution center needs are different
DC becomes a ware house as well
Marketing plan changes
Information system integration
Store information system Product centric
Non-store information systems Customer Centric
28. Challenges of EMCR
Market trends
Walmart started with a separate
management concept when it started
www.walmart.com
JCPenny had everything separate when it
started its on line store.
Originally managed by network specialists
Since has realized integration is the key
Separate marketing, warehousing and
promotion.
Since has realized integration is the KEY!
Some retailers out source for online channel
management
Limits competitive advantage
29. Challenges of EMCR
Supporting M Commerce
The purchase of goods and services through
mobile devices
Predicted to be $120 mil. 8% of e-commerce
Hardware limitations
ESPN has mobile specific site
Store applications is a growing trend
Macy’s iShop browsing of 12 departments
Scrolling wheel allows fine tuning
Then with two click you can have it sent to a
store or your home.
Also used as a promotional tool
Point out clearances, sales etc. to draw business
30. Challenges of EMCR
Organizing for Multi-Cannel Retailing
Select complete integration
Select different organization or each channel
Same product at the same prices
Same promotions and sales
Allows tailoring to the specific channel
Requires management of each market
In selecting which to deploy must consider
Customer database
Consistence
Brand image
Pricing
Merchandise assortments across channels
31. Challenges of EMCR
Organizing for Multi-Cannel Retailing
Centralized customer database
Allows exploitation of consumer data to
improve the shopping experience
Allows better understanding of What the
consumer wants
Allows for seamless transition between channels
Brand image
Gives new media to “Brand“.
Matching of brand image
important
Reduces consumer feeling Lost
32. Challenges of EMCR
Organizing for Multi-Cannel Retailing
Merchandise Assortment
Okay to have different assortment in each
channel
On line typically have a deeper and broader
selection
Easier to carry product that doesn't have broad
appeal
Does your product or store need coverage of
the touch and feel nature of humans?
Stores
Does your product or service do better in “lookand-see”?
On-line
33. Challenges of EMCR
Organizing for Multi-Cannel Retailing
Pricing
Competition may require pricing
variance
On
line VS store
Barn’s and Noble has lower prices to
compete with Amazon
Location
vary pricing due to local market
Oriley Auto parts varies it price to cover
different shipping costs and what the market
expects
34. Challenges of EMCR
Organizing for Multi-Cannel Retailing
Reduction of Channel Migration
Channel migration is consumers
collecting information about products on
their channel then going to a competitor
to make the purchase.
78 % of people will check a web site then
go to a retail outlet.
8% Shop at stores then go to purchase
online
Two approaches to reduce
Offer uniquely relevant information based
on preparatory data the retailer has
collected on the consumer
Promote private label merchandise that
can only be purchased from that retailer
35. Multichannel Shopping in the
Future
Evolve or die
Retailing is ever changing and if a retailer don’t
change with the times they may fall behind
Chips in Store cards to alert store personnel of
the nature of the consumer purchasing habits
Simulators for how you would look or use the
product on mobile devices
Small devices in store retail associates can use
to look up specifics of a products
3D picture that can be manipulated with a
mouse and keyboard
36. KEY TERMS
Automated retailing
E-tailing
Online retailing
Catalog channels
infomercials
Party plan system
Channel Migration
Internet retailing
Pyramid scheme
Direct-response advertising
Live chat
Retail channel
Direct selling
M-commerce
Share of customers
disintermediation
Multichannel
retailer
Television home
shopping
Electronic retailing
Multilevel system
Vending machines
37. Assignment 1
Retail Channels
Please make a Prezi on the different retailing
channels. You will want to provide Examples of
each not provided in the book. Please explain
why that retailer may have chosen that
particular channel. Include:
Internet channels
Catalog channels
Direct selling
Television home shopping
Automated retailing
38. Assignment 2
Benefits Offered By Each Retail channel
In a Blalberize or Comics Life, please chose two
retailers and compare the channels they have
chosen to utilize. You will want to include:
Store channel
Catalog channel
Internet channel
The concerns related to each channel and
how they may over shadow the benefits of
each
39. Assignment 3
Benefits of Multi-Channel Retailing
In Photo Peach or Prezi, create your story on the
benefits of multi-channel marketing. Choose two
examples of retailers; One that could benefit from
adding and one that utilizes multi-channel marketing
to
Overcome the limitations of an existing format
Increase customer Satisfaction
Gain insight into consumer shopping behavior
Expanding market presence
Building a strategic advantage
In the retailer not using multi-channel
marketing, explain how it is hurting them. With the
retailer using the multi-channel marketing show how
they are stronger than the similar competition.
40. Assignment 4
Other Multi channel Retailing Issues
In Prezi, or a Power Point explain what
channel has the lowest cost and provide an
example of a company that uses that
channel.
In the same Prezi or Power Point, provide an
example of a retailer who has bypassed
retailers and sells directly to consumers.
Explain why they may have chosen to do so.
41. Assignment 5
Challenges of Effective Multi-Channel Retailing
Interview a local business that utilizes multi-channel
retailing and make a video or audio.
You will want to cover how they are using multichannel retailing to intergrade the shopping
experience
Has M Commerce been a positive or negative effect
on their business
Has it created a centralized customer data base
Has it effected their brand image
Has their merchandise assortment grown as a result
What kind of pricing effect has it had on them
Have they notice a problem with channel migration
how that affect them
42. Assignment 6
Multi-channel shopping in future
Here
you will want to use Photo Peach or
Comics Life to provide six example of the
future of multi-channel marketing and
how it has altered the experience.
Include things that make you say “WOW!
I love how this allows me to understand
the product or service more.” Since the
internet is the “future. Finding those
examples on-line retailers is probably the
easiest.