1. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-1
Web, Nonstore-
Based, and
Other Forms of
Nontraditional
Retailing
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH
11th Edition11th Edition
BERMAN EVANS
1

2. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-2
Chapter Objectives
To contrast single-channel and multi-
channel retailing
To look at the characteristics of the three
major retail institutions involved with
nonstore-based strategy mixes: direct
marketing, direct selling, and vending
machines – with an emphasis on direct
marketing
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3. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-3
Chapter Objectives (cont.)
To explore the emergence of electronic
retailing through the World Wide Web
To discuss two other nontraditional forms of
retailing: video kiosks and airport retailing
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4. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-4
Figure 6-1a: Approaches to
Retailing Channels
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5. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-5
Figure 6-1b: Approaches to
Retailing Channels
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6. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-6
Nonstore Retailing
 Retailing strategy that is not store-based
 Exceeds $410 billion annually
 80% comes from direct marketing
 Web-based retailing is the fastest-
growing area
 Web retailing expected to reach $180
annually as of 2012
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7. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-7
Nontraditional Retailing
 Nontraditional retailing also includes
formats that do not fit into store and
nonstore-based categories:
 Video kiosks
 Airport retailing
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8. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-8
Direct Marketing
Customer is initially exposed to a good or
service through a non-personal medium and
then orders by mail, phone, fax, or computer
Annual U.S. sales exceed $325 billion (including
the Web)
Other leading countries include
* Japan
* Germany
* Great Britain
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* France
* Italy

9. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall
6-9
Characteristics of Direct MarketingCharacteristics of Direct Marketing
CustomersCustomers
Married
Upper middle class
35-50 years old
Desire convenience,
unique items, good
prices

10. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-10
Strategic Business Advantages of DirectStrategic Business Advantages of Direct
MarketingMarketing
 Reduced costs
 Lower prices
 Large geographic coverage
 Convenient to customers
 Ability to pinpoint customer segments
 Ability to eliminate sales tax for some
 Ability to supplement regular business
without additional outlets
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11. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-11
Strategic Business LimitationsStrategic Business Limitations
of Direct Marketingof Direct Marketing
 Products often cannot be examined prior to
purchase
 Costs may be underestimated
 Response rates to catalogs under 10%
 Clutter exists
 Long lead time required
 Industry reputation sometimes negative
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12. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-12
Data-Base Retailing
 Collection, storage, and usage of relevant
customer information
* name
* address
* background
* shopping interests
* purchase behavior
 Observation of 80-20 rule
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13. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-13
Emerging Trends
 Evolving activities
 Changing customer lifestyles
 Increasing competition
 Increasing usage of dual distribution
channels
 Changing media roles, technological
advances, and global penetration
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14. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-14
Selection Factors by Customers
 Company reputation and image
 Ability to shop whenever consumer wants
 Types of goods and services
 Availability of toll-free phone number or Web site
for ordering
 Credit card acceptance
 Speed of promised delivery time
 Competitive prices
 Satisfaction with past purchases and good return
policy
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15. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-15
Figure 6-4: Executing a Direct MarketingFigure 6-4: Executing a Direct Marketing
StrategyStrategy
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16. 6-16Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall
Media SelectionMedia Selection
Printed catalogs
Direct-mail ads and
brochures
Inserts with monthly
credit card and other
bills (statement
stuffers)
Freestanding displays
Ads or programs in
mass media
Banner ads or hot
links on the Web
Video kiosks
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17. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-17
Outcome MeasuresOutcome Measures
 Overall response rate
 Average purchase amount
 Sales volume by product category
 Value of list brokers
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18. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-18
Direct Selling
 Direct selling includes personal contact
with consumers in their homes (and other
nonstore locations such as offices) and
phone solicitations initiated by retailer.
 Annual sales of $31 billion in the U.S., where
15 million people are employed (more than
80 percent part-time).
 Annual foreign revenues of $85 billion,
generated by 48 million salespeople.
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19. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-19
Table 6-1: U.S. Direct Selling Industry

20. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-20
Vending Machines
 Vending machines are a cash- or card-
operated retailing format that sells goods
and services.
 Eliminates the use of sales personnel and
allows 24-hour sales.
 Machines placed wherever convenient for
consumers.
 95 percent of the $50 billion in annual U.S.
vending machine sales involve hot/cold
beverages and food items.
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21. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-21
Emergence of World Wide Web
 The World Wide Web (Web) is a way to access
information on the Internet.
 People work with easy-to-use Web addresses
(sites) and pages.
 Web users see words, charts, pictures, and
video while hearing audio.
 Both “Internet” and “World Wide” Web
convey the same central theme: online
interactive retailing.
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22. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-22
The Role of the WebThe Role of the Web
 Project a retail presence
 Enhance image
 Generate sales
 Reach geographically-dispersed customers
 Provide information to customers
 Promote new products
 Demonstrate new product benefits
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23. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-23
The Role of the Web (cont.)The Role of the Web (cont.)
 Provide customer service (e.g. E-mail)
 Be more “personal” with consumers
 Conduct a retail business efficiently
 Obtain customer feedback
 Promote special offers
 Describe employment opportunities
 Present information to potential
investors, franchisees, and the media
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24. 6-24Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall
Figure 6-6:
Web-Based
Retail Sales
Projections
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25. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-25
Figure 6-8: Five
Stages of
Developing a
Retail Web
Presence
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26. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-2626
Figure 6-9:
Checklist
of Retailer
Decisions
for the
Web

27. 6-27Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall
Web StrengthsWeb Strengths
 Using the Web
information
entertainment
interactive
communications
 Shopping Online
selection
prices
convenience
fun
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28. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-28
Reasons NOT to Shop OnlineReasons NOT to Shop Online
Lack of trust
Fear
Lack of security
Lack of personal communication
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29. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-29
Recommendations forRecommendations for
Web RetailersWeb Retailers
 Develop or exploit a well-known,
trustworthy retailer name
 Tailor the product assortment for Web
shoppers
 Enable the shopper to “click” as little as
possible
 Provide a solid search engine
 Use customer information
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30. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-30
Video Kiosks
 A video kiosk is a freestanding, interactive,
electronic computer terminal that displays
products and related information.
 Some kiosks are located in stores to
enhance customer service; others let
consumers place orders.
 There are 2.2 million video kiosks in use
throughout the world, nearly 1 million of
which are Internet-connected.
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31. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-31
Airport Retailing
 Large group of prospective shoppers
 Captive audience
 Strong sales-per-square-foot of retail
space
 Strong sales of gift and travel items
 Difficulty in replenishment
 Longer operating hours
 Duty-free shopping possible
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32. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-32
Figure 6-13: Airport Retailing and Starbucks
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33. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-33
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