retailing

1. Pasig Catholic College
Multi-Channel Retailing
Chapter 3

2. What is Retailing?
 It is a high-tech, high-touch growth
industry that offers opportunities for
people to make profit and loss
decisions early in their careers.

3. Multichannel Retailing
 Retailers that sell merchandise or
services through more than one
channel.
 Retailers can leverage the unique
benefits provided by each to attract
and satisfy more customers.

4. Questions:
1. What are the unique customer benefits offered
by the three retail channels: stores, catalogs,
and the Internet?
2. Why are retailers moving toward using all three
channels?
3. How do Multichannel retailers provide more
value to their customers?
4. What are the key success factors in
Multichannel retailing?
5. How will technology might affect the future
shopping experience?

5. Benefits Provided by Different Channels
Stores Catalogs Internet
Browsing Convenience Broad selection
Touching and feeling Safety Detailed problem-
products solving Information
Personal service Visual presentation Personalization
Cash payment
Entertainment & Social
interaction
Immediate gratification
Risk reduction

6. Stores
 Browsing
 Touching and feeling products
 Personal service
 Cash payment
 Entertainment & Social interaction
 Immediate gratification
 Risk reduction

7. Browsing
 Many consumers surf the Internet
and look through catalogs for ideas,
though most consumers still prefer
browsing in stores.

8. Touching and Feeling Products
 Opportunityfor customers to use all
five of their senses – touching,
smelling, tasting, seeing, and
hearing.

9. Personal Service
 Sales associates still have the
capability of providing meaningful,
personalized information.

10. Cash Payment
 Stores are the only channel that
accept cash payment.

11. Entertainment and Social Experience
 In-store shopping can be a
stimulating experience for some
people. It provides a reality in their
daily routine and enabling them to
interact with friends.

12. Immediate Gratification
 Stores have the advantage of
allowing customers to get the
merchandise immediately after they
buy it.

13. Risk Reduction
 The store will be there to receive
defective or unsuitable merchandise
and issue you a credit for it.

14. Catalog Channel
 Providessome benefits to customers
that are not available from the store
or Internet channels.
 Convenience
 Safety
 Visual presentation

15. Convenience
 Consumers have the added
convenience of not being restricted
to a place with Internet access and a
computer;
 They can look through a catalog on
the beach or propped up in bed.

16. Safety
 Securityin malls and shopping areas
is becoming an important concern for
many shoppers, particularly with the
elderly.

17. Quality of Visual Presentation
 The photographs of merchandise in
catalogs, while not as useful as in-
store presentation, are superior to
the visual information that can be
displayed on a CRT screen.

18. INTERNET CHANNEL
 Provides convenience and safety benefits
offered by catalogs and other non-stores
formats.
 Has the potential to offer a greater
selection of products and more
personalized information about products
and services.
 Broad selection
 Detailed problem-solving Information
 Personalization

19. Broader Selection
 The vast number of alternatives
available to consumers.

20. Detailed Problem-Solving Information
 Provision of information to help
customers make better purchase
decisions.
 Customers can format the
information so they can effectively
use it when evaluating products.

21. Personalization
 Most significant potential benefit of
the internet channel is its ability to
personalized the information for each
customer economically.
Personalized Customer Service
Personalized Offering
Personalization in the Future

22. Personalized Customer Service
 Enables electronic retailers to
automatically send a proactive chat
invitation to customers on the site.
 Offering live, online chats.
 ONLINE CHAT – provides customers with the
opportunity to click a button at anytime and have an
instant messaging e-mail or voice conversation with
a customer service representative.

23. Personalized Offering
 Provides an opportunity for retailers
to personalized their offerings for
each of their customers.
 Recommendation of complimentary
merchandise.

24. Personalization in the Future
 Benefits that will be available to
consumers’ shopping via the Internet
in the future.
 Access
to more retailers and deeper
merchandise assortments.

25. Touch and Feel Attributes
Store Catalogs Internet
-Hesitate to buy. -Provides information -Provides
Role of -Limited information about the consistency information about
and quality of the consistency
Brands -Offer little benefits
merchandise and quality of
merchandise.
-Limited information -Limited information -Using of 3D /
-Offer little benefits -Offer little benefits zoom
Using -Virtual models
Technology -digitized body
-Limited information -Limited information -Useful information
-Offer little benefits -saving time & effort -saving time &
-consume time & effort
Gifts effort
-Limited information -Limited information -Useful information
-Offer little benefits -Offer little benefits -saving time &
Services -consume time &
effort
-consume time &
effort
effort
-prefer by banks

26. Evolution Toward Multi-
channel Retailing

27. Four Reasons:
1st –
Overcoming Limitations of an existing
2nd – Expanding Market Presence
3rd – Increasing Share of Wallet
4th – Insights into Customer Shopping
Behavior

28. Overcoming Limitations of an
existing Format
 The amount of merchandise that can
be displayed and offered for sale in
store is limited.
 Limitation that store-based retailers
face is inconsistent execution.

29. Expanding Market Presence
 Adding an electronic channel is particularly
attractive to firms with strong brand
names but limited locations and
distribution.
Store
5% 16%
19% 43%
11%
Catalog Web Site
6%

30. Increasing Share of Wallet
 Electronic
and catalog channels drive
more purchases from the stores, and
the stores drive more purchases
from the Web site.
 Store-based retailers can also
leverage their stores to lower the
cost of fulfilling orders and
processing retuned merchandised if
they use the stores as “warehouse”
for gathering merchandise for
delivery customers.

31. Insights into Customer Shopping
Behavior
 An electronic channel can provide
valuable insights into how and why
customers shop and are dissatisfied
or satisfied with the experience.
 Offersthe opportunity to collect
more detailed information about
customer preferences.

32. Capabilities Needed for
Multichannel Retailing

33. Skills to operate and realize the
benefits of Multi-channel retailing.
1. Developing assortments and managing
inventory
2. Managing employees in distant locations
3. Distributing merchandise efficiently from
distribution centers to stores
4. Catalogs
5. Web sites
6. Processing orders electronically
7. Efficiently distributing individual orders to homes
8. Operating communications and information
systems

34. Capabilities Needed for Multichannel
Retailing
Develop assortments & manage inventory High High Low Low
Manage people in remote locations High Low Low Low
Efficiently distribute merchandise to store High Low Low High
Present merchandise effectively in a printed format & Med. High Low Low
distribute catalogs
Present merchandise effectively on a web site Med. High High Low
Process orders from individual customers electronically Med. High High Low
Efficiently distribute merchandise to homes & accept Med. High Low Low
returns
Integrate information systems to provide a seamless Low Med. High low
customer experience across channels
Store-Based Retailers Niche Electronic Retailers
Catalogs Retailers Merchandise Manufacturers

35. Issues in Multichannel
Retailing
IntegratedShopping Experience
Brand Image
Merchandise Assortments
Pricing

36. Integrated Shopping Experience
 Many retailers are finding it easier to
offer integration one step at a time
rather than trying to link everything
from the start, which could be
financially and technologically
daunting for them and alienate
consumers of things don’t go well.

37. Brand Image
 Multichannel retailers need to project
the same image to their customers
across all channels.
 Customers enter the Web site
through an image of the red doors
used in its stores and are greeted by
the phrase,
“Always classic, never closed.”

38. Merchandise Assortments
 Customers expect that everything
they seen in a retailer’s store will
also be available on its Web site.
 Many multi-channel retailers have
tailored the assortments sold on
their web site to include only
products their customers are likely to
buy over the Internet.

39. Pricing
 Represents another difficult decision
for a multi-channel retailer.
 Retailersneed to adjust their pricing
strategy because of the competition
they face in different channels.
 Multichannel retailers are beginning
to offer new types of pricing, like
auctions, that take advantage of the
unique properties of the Internet.

40. Summary
- Retailing vs. Multi-Channel Retailing
- Importance and contribution of
utilizing multi-channels
- Benefits in adopting a multi-channel
strategy
- Three basic channels and skills
needed to realize benefits of multi-
channel retailing
- Issues in multi-channel retailing

41. Conclusion
The pervasiveness of information
and communication technologies has
shifted economic power from retailers,
which once could dictate the terms of
purchase, to consumers, who can now
change loyalties as easily as they send
e-mail. Recapturing those consumers
is the top priority, and success of this
can be done if loyalty can be rebuild
quickly, efficiently and without losing
control of costs.

42. Conclusion
An effective and profitable
strategy for multi-channel retailing
requires far more than simply bolting
on a dot.com division or a telesales
service center. A retailer’s retail
channels must operate on an
integrated whole. Channels must have
no conflict between channels, no
cannibalizing with each other.