11.non store retailing.2011Presentation Transcript
NON STORE RETAILING
NON STORE RETAILING While only 10% of retail sales are made through non-store channels, sales in non-store formats are growing faster than store sales. Non-store retailing is a form of retailing in which sales are made to consumers without using stores.
The various types of non-store retailers are defined in terms of the medium they are using to communicate with customers: Electronic retailers use an interactive computer or computer- like interface to communicate with customers. Catalog and direct mail retailers communicate using printed material. Direct selling retailers communicate with customers through a personal, face-to-face contact by a salesperson. TV home shopping retailers use television. Vending machine retailers have limited communications through the display of the merchandise in the machine.
Most retailers offer consumers the convenience of selecting and purchasing merchandise at a time and location of their choosing. While non-store retailing provides unique convenience benefits over in-store retailing, frequently consumers are not able to get some important services provided by store-based retailers including that they cannot touch and feel the merchandise, try it on, attend sessions on how to use it, or have it altered prior to purchase.
ELECTRONIC RETAILING Electronic retailing is a retail format in which the retailer and customer communicate with each other through an interactive electronic network. After an electronic dialog between the retailer and customer, the customer can order merchandise directly through the interactive network or by telephone and the merchandise is typically delivered to the customer’s home. The bandwidth of the Internet connection into most household limits the interactivity and amount and quality of information that can be presented.
ISSUES ABOUT SHOPPING ON THE INTERNET1. Entertainment and Social Experiences2. Safety3. Ordering and Getting Merchandise4. Assistance in Screening Alternatives5. Providing Information to Evaluate Merchandise6. Cost of Merchandise Electronic retailing sales will grow only if the format offers consumers advantages over the existing retail formats.
1.Entertainment and Social Experiences In-store shopping can be a stimulating experience for some people, providing a break in their daily routine and enabling consumers to interact with friends. All non-store retail formats are limited in the degree to which they can satisfy these entertainment and social needs.
2. Safety Non-store retail formats have an advantage over store-based retailers by enabling customers to review merchandise and place orders from a safe environment-their homes
3. Ordering and Getting Merchandise Electronic retailing, like most non-store retail formats, enables consumer to order merchandise from any location at any time of the day. However, consumers usually have to wait several days to get the merchandise. Thus, all non-store retailers suffer in comparison to stores on this dimension. The importance of getting merchandise immediately to customers depends on the type of buying situation and merchandise.
4. Assistance in Screening Alternatives Another potential, more significant, benefit of electronic retailing, is the ability to have a search through a wide range of alternatives and select a small group for the customer to look at in more detail. Search engines are computer programs that simply search for and provide a listing of all Internet sites selling a product category.
5. Providing Information to Evaluate Merchandise (Cont.) Using and interactive electronic communication channel, retailers can respond to the customer’ inquiries just like a sales associate would. If information provided by the electronic database can be frequently updated and will always be available, consumers have advantages while store-based retailers have a very difficult time retaining knowledgeable sales associates, and in many cases it is not cost-effective for them to do so. Electronic retailers can easily provide information to have side-by-side comparisons of alternatives. Customers in stores usually have to inspect each brand,one at a time, and then remember different attributesto make a comparison.
6. Cost of Merchandise Some experts suggest that electronic retailers will have much lower costs than in-store retailers because electronic retailers do not have to spend money building and operating stores at convenient locations. However, electronic retailers, or their customers, will have higher costs of delivering small quantities of merchandise to homes, as well as dealing with the high level of return, and attracting customers to their websites.
THE 5 C’S OF E-RETAILING Content - information needs Communication – Consumers want dialogues via e- mail, live chat, online survey etc.,) Customer Care – variety of payment modes, delivery, return options, security, privacy Convenience – user friendly, easy navigation Connectivity – site to site connectivity and user to site connectivity
WHAT TYPE OF MERCHANDISE WILL BE SOLD EFFECTIVELY BY ELECTRONIC RETAILERS? In addition to the amount and presentation of information, retail formats also differed in the type of information they can present effectively. For instance, when purchasing apparel, some critical information might be “look and see” attributes like color and style, as well as “touch and feel attributes” like how the apparel fits. Based on the difficulty of providing “touch and feel” information through non-store channels, one might conclude that non-store retailers will not be able to successfully sell merchandise with more important “touch and feel” attributes like clothing, perfume,flowers, and food.
KEYS TO SUCCESS IN ELECTRONIC RETAILING Some critical resources needed to successfully sell merchandise electronically are(1) strong brand name and image,(2) customer information,(3) complementary merchandise and services,(4) unique merchandise,(5) the ability to effectively present information on the web pages, and(6) a distribution system to efficiently ship merchandise to homes and receive returns.