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An Assignment On “NON STORE RETAIL FORMAT” Retail ManagementSubmitted to: Submitted by:Mr. S. Banarjee Virender Rana (38) Apeejay Institute of Technology, Greater Noida
List of contents: Definition of Non Store Retailing Types of Non Store retailing 1. In Home Retailing 2. Telephone Retailing 3. Catalogue Retailing 4. Direct Response Retailing 5. Automatic Vending 6. Electronics Retailing Advantages and Disadvantages E- Tailing in India Precautions to be taken during Online Shopping Future Expectations/ Growth of Non-Store Retailing Conclusion Bibliography
Non-store Retailing: The selling of goods and services without establishing a physical store is known as Non-Store Retailing. It includes such services as vending machines, direct-to-home selling, telemarketing, catalog sales, mail order, and television marketing programs. The fast growing method used by retailers to sell products is through methods that do not have customers physically visiting a retail outlet. In fact, in many cases customers make their purchase from within their own homes.A large majority about 80% of retail transactions are made in stores. However, a growing volume of sales is taking place away from stores. It is estimated that non-store sales account for almost 20% of total retail trade. Types of Non Store Retail Format: Following are the six types of non store retailing: Direct selling, Tele marketing, Online retailing, Automatic vending, Direct marketing, and Electronics retailing. In Home Retailing Telephone RetailingNon Store Retailing Non Store Retailing Catalogue Retailing Non Store Retailing Direct Response Retailing Automatic Vending Electronic Retailing
Some global Non store Retail companies are: The Home Depot, Inc. Dollar Tree, Inc. Forever 21, Inc. The Bon-Ton Stores, Inc. Costco Wholesale Corporation J. Crew Group, Inc. Army and Air Force Exchange Service Bass Pro Shops, Inc. Amazon.com, Inc. AutoZone, Inc.Advantages of Non Store Retailing: Its freedom from a physical retail presence. The high fixed costs of operating retail outlets are eliminated. The breadth of customer coverage is considerably wider than is possible with an individual retail location. Companies do not have to spend large sums or dilute stock building new locations, or acquiring them. This truly gives the non-store retailer a global market from a cheap, centralized location.Disadvantages of Non Store Retailing: There is also the fear of credit card abuse and mail fraud, both related to the sense of detachment that not holding a prospective purchase brings. And since most of us do not have the luxury of a pricey T1 Internet connection, we must still deal with painfully slow connections.
Direct Selling:Direct selling is also defined as personal contact between a sales person and a consumer awayfrom a retail store. This type of retailing has also been called in home selling. Annual volume ofdirect selling in India is growing fast from the beginning of the 21st century.Like other forms of non-store retailing, direct selling is utilized in most countries. It isparticularly widespread in Japan, which accounts for about 35% of the worldwide volume ofdirect selling. The U.S. represents almost 30% of the total and all other countries the rest.The two kinds of direct selling are Door to door Party planDirect retailing originated several centuries ago and has mushroomed into a $9 billion industryconsisting of about 600 companies selling door-to-door, office-to-office, or at private-home salesmeetings. The forerunners in the direct-selling industry include The Fuller BrushCompany (brushes, brooms, etc.), Electrolux (vacuum cleaners), and Avon (cosmetics). Inaddition, Tupperware pioneered the home-sales approach, in which friends and neighbors gatherin a home where Tupperware products are demonstrated and sold. Network marketing, a direct-selling approach similar to home sales, is also gaining prevalence in markets worldwide.Network marketing companies such as Amway and Shaklee reward their distributors not onlyfor selling products but also for recruiting others to become distributors. In 2007,Amway’s parent company tested an Internet recruitment model by launching Fanista, a Website that sells entertainment media such as books, movies, and music, while rewarding users forbringing other customers to the site
Reasons for the growth in direct marketing:Advantages of Direct Selling: Consumers have the opportunity to buy at home or at another convenient Non-Store location that provides the opportunity for personal contact with a sales person. For the seller, direct selling offers the boldest method of trying to persuade ultimate consumers to make a purchase. The seller takes the product to the shopper’s home or work place and demonstrates them for the consumer.Limitations of Direct Selling: Sales commissions run as high as 40 to 50%of the retail price; of course, they are paid only when a sale is made. Recruiting sales people most of whom are part timers are difficult tasks. Some sales representatives use high pressure tactics or are fraudulent.
Telemarketing:Sometimes called telephone selling, telemarketing refers to a sales person initiating contact witha shopper and closing a sale over the telephone. Telemarketing many entail cold canvassing fromthe phone directory. Many products that can be bought without being seen are sold over thetelephone. Examples are pest control devices, magazine subscriptions, credit cards and cubmemberships.Telemarketing is not a problem free retailing. Often encountering hostile people on the other endof the line and experiencing many more rejections than closed sales, few telephone salesrepresentatives last very long in the job. Further some telemarketers rely on questionable orunethical practices. For instance firms may place calls at almost any hour of the day or night.This tactic is criticized as violating consumers right to privacy. To prevent this, some states haveenacted rules to constrain telemarketers activities.Despite these problems, telemarketing sales have increased in recent years. Fundamentally, somepeople appreciate the convenience of making a purchase by phone. Costs have been reduced bycomputers that automatically dial telephone number, even deliver a taped message and recordinformation the buyer gives to complete the sale. The future of telemarketing is sure to beaffected by the degree to which the problems above can be addressed and by the surge of onlineretailing.Advantages and Disadvantages of Telemarketing:There are many advantages and disadvantages of telemarketing. Telemarketing is a somewhatstressful career choice. It really depends on what type of telemarketing that you do. Collectioncall telemarketing can be one of the worst telemarketing jobs that you can have. No matter whichpath of telemarketing you take you will run into a lot of rude people. Everybody knows thatpeople do not like to get interrupted by telemarketers at home. When I see a telemarketer call orwhen I hear a pause on the line, I hang up the phone.You can do telemarketing from home. Usually companies will pay you at least ten dollars anhour to do this from your home. One company that hires telemarketers is known as BabyToBee.This job is better than your average telemarketing companies because you are calling expectantmother and fathers and offering them baby coupons. Usually these people sign up on the website
to receive these things and they are happy to hear from you. Its probably one of the onlytelemarketing jobs that people will be excited to talk to you.As with any telemarketing company you will run into dead leads such as people sign up and cantremember or they never signed up. With a lot of companies it has been a long time since theysigned up for whatever it was they were looking to get. The best way to have a successful call isto establish a rapport with your parent. If they trust you and you are friendly they will be morelikely to end the call with you on a good note. With telemarketing you cannot get upset withpeople who call you names and hang up on you.Telemarketing allows you to stay at home and work which means that you save on gas moneyand other things. You can wake up and sign on whenever you choose to, as long as you get thehours in that are required. All you need for telemarketing is a computer with an internetconnection and some type of headset which has a built in microphone. You can purchase aheadset from Best Buy or an electronics store for around $30.00. Its not one of these jobs whereyou need to purchase $300 worth of things to get started working from home. It allows you tostay at home and have a flexible schedule.
Online Retailing:When a firm uses its website to offer products for sale and then individuals or organizations usetheir computers to make purchases from this company, the parties have engaged in electronictransactions (also called on line selling or internet marketing).Many electronic transactions involve two businesses which focus on sales by firms to ultimateconsumers. Thus online retailing is one which consists of electronic transactions in which thepurchaser is an ultimate consumer.Online retailing is being carried out only by a rapidly increasing number of new firms, such asBusy.com, Pets Mart and CD Now.com. Some websites feature broad assortments, especiallythose launched by general merchandise retailers such as Wal-mart and Target. Some Internetonly firms, notably Amazon.com are using various methods to broaden their offerings.Whatever their differences, e-retailers are likely to share an attribute. They are unprofitable orbest, barely profitable. Of course, there are substantial costs in establishing an online operation.Aggressive efforts to attract shoppers and retain customers through extensive advertising and lowprices are also expensive. The substantial losses racked by online enterprises used to be accepted,perhaps even encouraged by investors and analysts. The rationale was that all available fundsshould be used to gain a foothold in this growing market.Despite these challenges, online retailing is expected to grow, rapidly and significantly for theforeseeable future. Online sales represented about 1% of retail spending in 2005, but oneresearch firm estimates that consumer purchases on the Internet with triple by the year 2010.Which product categories are consumers most likely to buy on the Internet in the future?Consumers shopping intentions in 2005 placed the following goods and services at the tope ofthe list: books, music and videos, computer hardware and software, travel and apparel. Ofcourse, given that change on the Internet occurs, these categories soon may be surpassed byothers - perhaps groceries, toys, health and beauty aids, auto parts or pet supplies.
Advantages of Online Retailing: Bargaining power of consumers. They enjoy a wider choice Supplier power. It is more difficult for consumers to manage a non-digital channel. Internet increases commoditization. Threat of new entrants. Online means it is easier to introduce new services with lower over-heads Threat of substitutes Rivalry among competitors. It is easier to introduce products and services to different markets
Automatic Vending:The sale of products through a machine with no personal contact between buyer and seller is calledautomatic vending.The appeal of automatic vending is convenient purchase. Products sold by automatic vending areusually well-known presold brands with a high rate of turnover. The large majority of automaticvending sales comes from the "4 Cs" : cold drinks, coffee, candy and cigarettes.Automatic vending is a unique area in non-store merchandising because the variety ofmerchandise offered through automatic vending machines continues to grow. Initially, impulsegoods with high convenience value such as cigarettes, soft drinks, candy, newspapers, and hotbeverages were offered. However, a wide array of products such as hosiery, cosmetics, foodsnacks, postage stamps, paperback books, record albums, camera film, and even fishingworms are becoming available through machines.Advantages and disadvantages:Vending machines can expand a firms market by reaching customers where and when they cannotcome to a store. Thus vending equipment is found almost everywhere, particularly in schools, workplaces and public facilities. Automatic vending has high operating costs because of the need toreplenish inventories frequently. The machines also require maintenance and repairs.Future Expectations:The outlook for automatic vending is uncertain. The difficulties mentioned above may hinder futuregrowth. Further, occasional vending-related scams may scare some entrepreneurs away from thisbusiness.Vending innovations give reason for some optimism. Debit cards that can be used at vendingmachines are becoming more common. When this card is inserted into the machine, the purchaseamount is deducted from the credit balance. Technological advances also allow operators tomonitor vending machines from a distance, thereby reducing the number of out-of-stock or out-of-order machines.
Direct Marketing:There are no consumers on the exact nature of direct marketing. In effect, it comprises all types ofnon-store retailing other than direct selling, telemarketing, automatic vending and online retailing. Inthe context of retailing, it has been defined as direct marketing as using print or broadcast advertisingto contact consumers who in turn, buy products without visiting a retail store.Direct marketers contact consumers through one or more of the following media: radio, TV,newspapers, magazines, catalogs and mailing (direct mail). Consumer orders by telephone or mail.Direct marketers can be classified as either general - merchandise firms, which offer a variety ofproduct lines, or specialty firms which carry - only one or two lines such as books or fresh fruit.Under the broad definition, the many forms of direct marketing include: Direct mail - in which firms mail letters, brochures and even product samples to consumers, and ask them to purchase by mail or telephone. Catalog retailing - in which companies mail catalogs to consumers or make them available at retail stores. Televised shopping - in which various categories of products are promoted on dedicated TV channels and through infomercials, which are TV commercials that run for 30 minutes or even longer on an entertainment channel.Advantages of Direct Marketing:Direct marketing provides shopping convenience. In addition, direct marketers enjoy comparativelylow operating expenses because they do not have the overhead of physical stores.Disadvantages of Direct Marketing: Consumers must place orders without seeing or touching the actual merchandise. To off-set this, direct marketers must offer liberal return policies. Furthermore, catalogs and to some extent, direct mail pieces are costly and must be prepared long before they are issued. Price changes and new products can be announced only through supplementary catalogs or brochures.
Direct marketings future is difficult to forecast, given the rise of the Internet.The issue is whether or not firms relying on direct marketing can achieve and sustain adifferential advantage in a growing competition with online enterprises.
E-Retailing:Internet Retailing or e-retailing as is usually referred to as covers retailing using a variety ofdifferent technologies or media. It may be broadly be a combination of two elements. Combiningnew technologies with elements of traditional stores and direct mail models using newtechnologies to replace elements of stores or direct mail retails. Internet retail also has someelements in common with direct mail retailing. For example, e-mail messages can replace mailmessages and the telephone, that are used in the direct mail model as means of providinginformation, communication and transactions while on-line catalogues can replace printedcatalogues.As with direct mail businesses, critical success factors include:(i) Use of customer databases(ii) Easy ordering(iii) Quick DeliveryOperational elements that the Internet retail model shares with both the retail store and directmail models include:(i) Billing of customers(ii) Relationships with supplierThere are, therefore, many elements that Internet retail and more traditional retail models have incommon. Indeed many of the most successful Internet retailers have been those that have beenable to successfully transfer critical elements from traditional retailing to the Internet, such ascustomer service and product displays.
E-Retailing in India:Bottlenecks Faced By E-Retailing in India:(1) Problems with the Payment SystemPeople in India are not used to the online shopping system and moreover the online paymentsystem through the credit card is also totally alien to them. Most of them do not avail of thetransaction facilities offered by the credit cards. They are also dubious regarding the onlinepayment system through the credit cards. Hence different payment options should be madeavailable to them like the credit card, cash on delivery and net banking to give them furtherassurance.(2) Problems with Shipping:The customers using the online shopping channel should be assured that the products that theyhave ordered would reach them in due time. For this the retail companies have resorted toprivate guaranteed courier services as compared to postal services.(3) Offline presence:The customers should be assured that the online retailers are not only available online butoffline as well. This gives them the psychological comfort that these companies can be reliedupon.(4) Products offered at discounted rates:The online retailers save on the cost of building and employee salaries. Some part of thisbenefit should also be enjoyed by the online customers by a reduction in the price of theproduct. The customers should be conveyed this message that they are getting the products at adiscounted price.(5) Language Problem:Most internet retail shops use English as their mode of communication. English may not becomprehensible to the majority of the Indian population. To increase the customer base, contentin the online retail shops should be provided in local language.
Another reason why the concept of e- retailing or online retailing has not gained prominence inIndia is that the Indians prefer to touch the products physically before buying them. This facilityis provided through the multi-brand outlets, not available online. Studies have revealed thepreferences of the customers towards the traditional shopping methods. Hence the retailer onlineshould first make it a point to spot the potential customers and accordingly plan out the product.If the customers are more open to online shopping, then nothing can be more beneficial. Theysave the time and effort to visit, departmental stores, shopping malls, etc. products can bedelivered by a click of the mouse.
Precautions to be taken during Online Shopping:Shopping online offers lots of benefits that you wont find shopping in a store or by mail. TheInternet is always open — seven days a week, 24 hours a day — and bargains can be numerousonline. With a click of a mouse, you can buy an airline ticket, book a hotel, send flowers to afriend, or purchase your favorite fashions. But sizing up your finds on the Internet is a littledifferent from checking out items at the mall.If youre buying items from an online retailer or auction website, following are the advice to helpyou make the most of your shopping experience:(1)Know who youre dealing with:Anyone can set up shop online under almost any name. Confirm the online sellers physicaladdress and phone number in case you have questions or problems. If you get an email or pop-upmessage while youre browsing that asks for financial information, dont reply or click on the linkin the message. Legitimate companies dont ask for this information via email.(2) Know exactly what youre buying:Read the sellers description of the product closely, especially the fine print. Words like"refurbished," "vintage," or "close-out" may indicate that the product is in less-than-mintcondition, while name-brand items with "too good to be true" prices could be counterfeits.(3) Know what it will cost:Check out websites that offer price comparisons and then, compare "apples to apples." Factorshipping and handling — along with your needs and budget — into the total cost of the order”.Do not send cash under any circumstances.(4)Pay by credit or charge card:If you pay by credit or charge card online, your transaction will be protected by the Fair CreditBilling Act. Under this law, you have the right to dispute charges under certain circumstancesand temporarily withhold payment while the creditor is investigating them. In the event ofunauthorized use of your credit or charge card, you generally would be held liable only for the
How to Report if You Have Been a Victim of an Online Shopping Fraud:If you have problems during a transaction, try to work them out directly with the seller, buyer orsite operator. If that doesnt work, file a complaint with: The attorney generals office in your state. Your county or state consumer protection agency. Check the blue pages of the phone book under county and state government. The Better Business Bureau. The FTC.
Future Expectation/Growth of Non-store retailing:Non-store retailing grew at a much faster rate than store-based retailing during the review period.While direct seller Amway embarked on an aggressive brand campaign in 2008, it was Internetretailing which drove growth, riding on increasing Internet penetration, the reduced cost ofInternet access, and greater familiarity with on-line purchasing.With some market observers predicting that by the year 2000 non-store retailing will handle 30percent of all general merchandise sold, non-store channels may become a powerful force in theretailing industry.This graph represents that the importance and the share of the retail online sales is increasing atan increasing rate. It also signifies that with the time constraint coming in the life-style of manybuyers the non-store based retailing and e-tailing will be the core of the retailing business aroundthe world in near future.
Conclusion:Five major forms of non store retailing such as direct selling, telemarketing, automatic vending,on line retailing and direct marketing are discussed in detail. Each type has advantages as well asdrawbacks.The importance and the share of the retail online sales are increasing at an increasing rate. It alsosignifies that with the time constraint coming in the life-style of many buyers the non-store basedretailing and e-tailing will be the core of the retailing business around the world in near futureand in India as well.