Touch/Feel - - You can use your 5 senses, touching, smelling, tasting, seeing and hearingTo evaluate the products before you buy them.. Online you cant feel the products like you could if you were at the store purchasing themPersonal Service - - Personalized services from store associates. They can help youRisk Reduction - - Less risk that purchased products will be incorrectImmediate gratification - - you can get your merchandise immediately when you buy it from the store.. Don’t have to wait for it to get shippedEntertainment and Social Experience - - Interaction between sales associates or friends that you go shopping with. Browsing - - Easier to browse in stores to find the perfect item you are looking forCash Payment - - Immediate transaction and doesn’t result in potential interest or excessive debt
Safety - - security in malls and shopping areas becoming important especially to the elderly. Convenience - - You can look at the merchandise 24/7 on your own time whenever you want. easier to browse through than websites
Broader/Deeper Assortments - - higher range of products.. A store may not have your size but if you order online they will look at all the other stores in the country and see if they have your correct size or colorTime to Evaluate Merchandise - - Provides you with information to help made a better buying decisionPersonalization - - you may be able to personalize your merchandise , if you order and Ipod online through Apple.. You get free engraving on the back..Percieved risks - - people are concerned for the security of credit card transitions on the internet and they are also concerned about privacy violations
Overcoming the Limitations of an existing format - - Increased assortments - - better satisfy customers Low – Cost , Consistent Execution - - Current Information - - Internet can be updated while a catalog cant be unless they send out a new catalog.Increasing customer satisfaction/ loyalty - - Give the customer the option of shopping in store or online.. Gaining Insights to customer shopping behavior - - information on how customers shop at a store for merchandise is helpful to know to better what they would likeExpanding Market Presence - - by adding an electronic channel such as internet, can help expand marketing.. More people can be awareBuilding a Strategic Advantage - - information about customer purchase history and shopping behavior .andd. unique “how-to” knowledge about coordinating operational activities across channels
2 important issues that multichannel retailers face are……
Although you may think that electronic would be the cheaper it indeed can be even more expensive then the store channel. Why??? Because the retailer incurs significant costs to design maintain and refresh a website. They must attract customers to their site and maintain distribution systems and warehouses dedicated to fulfilling orders from customers. They also deal with a high level of returns.
Will manufacturer’s do this? Most won’t because………………………first dash…………………and because retailers have more expertise and are good at collecting and using info about costumers. …………………second dash………..
Consumers want to recognized by a retailer wheather they interact with a sales associate or kiosk in a store, log onto their website or contact their call center. They want to buy online but pick up or return in store.
This is a challenge for retailers because it takes unique skills and resources to manage each channel.
Due to the rapid growth of mobile phone usage and shopping via your mobile phone it is important that multichannel retailers support this but since most retailers websites don’t accomidate the small screen and slower download speeds of a cell phone this is something that is being worked on. To the right is an example of an I phone app from Macy’s called Macy’s Ishop. From this app you can shop just like you would if you were on a regular computer.
Customer databases are used to house complete history of each customers interaction with the retailer. This helps create a seamless experience for the customer. Retailers need to offer a consistent brand image for all of their channels. Typical different assortments of products are appropriate for each different channel. For example for some retailers the clothes they offer online might be different or of more assortment then what they offer in store. This usually happens because they offer more product then what they have space for in a store front. Pricing presents another challenge for multichannel retailers bc customers want pricing to be consistent among each different channel. However multichannel retailers have to adjust their pricing due to different kinds of competition in different channels. This can also cause some challenges bc with the technology we have today people can do price checking online. Channel migration is when a consumer goes to say walmart.com and finds a product they want but then purchases the product from target.com because of multiple reasons. Cheaper shipping or cheaper prices. Two ways to reduce this are to offer uniquely relevant info based on the proprietary data the retailer has collected about the customer and promote private label merchandise that can be purchased only from the retailer.
Multi Channel Retailers Retailer that sells merchandise or services through more than one channel
Retail ChannelA retail channel is the way a retailer sells and delivers merchandise and services to its customers
Different Types of retail channels Internet Channels (Online retailing, electronic retailing, or e-tailing) Catalog Channel Direct Selling Television home shopping Automated Retailing
Internet Channel Isa retail channel in which the offering of products and services for sale is communicated to customers over the Internet. More than one quarter of apparel shoppers look up basic info about stores- hours, location, special events, phone number 22 percent research merchandise 21 percent compare prices 21 percent download coupons
Catalog Channel Is a non-store retail channel in which the retail offering is communicated to customers though a catalog mailed to the customer. About half of U.S. consumers shop though catalogs each year Firms spend millions of dollars mailing catalogs, that account for only 3 percent of the roughly 80 million tons of paper products used annually. (More than either magazines or books)
Direct Selling Is a retail channel in which sales people interact with customers face-to-face in a convenient location, either at the customer’s home or at work. Direct salespeople demonstrate merchandise benefits and/or explain a service; take an order; and deliver merchandise. Highly interactive U.S. sales through direct selling are over $30 billion Largest merchandise selling is cosmetics, fragrances, cooking, kitchenware, weig ht loss products, vitamins, and books, videos, or toys.
Television Home Shopping Isa retail channel in which customers watch a television program that demonstrates merchandise and then place orders for that mercahndise, usually by telephone, internet, or TV remote.
3 types of TV Shopping 1. cable channels dedicated to television shopping 2. infomercials (programs, typically 30 to 60 minutes long that mix entertainment with product demonstration and then solicit orders placed by telephone) 3. Direct-response advertising (consists of one- t0 two- minute advertisements on television or radio that describes products and provides an opportunity for consumers to order them)
Automated Retailing Is a retail channel in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash, or use a credit card. (Vending machines) Examples: Redbox, Proactive, iPods, Sony products, Rosetta Stone, cosmetics. Redbox has 150 million people every week walk within 10 feet of one of its vending machines.
Benefits of Retail Channels Store Channel - - Touching/Feeling Products Personal Service Risk Reduction Immediate Gratification Entertainment and Social Experience Browsing Cash payment
Benefits of Retail Channels Internet Channel - - Broader/Deeper Assortments Time to Evaluate Merchandise Personalization Perceived Risks
Benefits of MultichannelRetailing Overcoming the Limitations of an Existing Format Increasing Customer Satisfaction and Loyalty Gaining Insights to Customer Shopping Behavior Expanding Market Presence Building a Strategic Advantage
Other Multichannel RetailingIssues The cost of selling products through the different channels. The potential for disintermediation
Which Channel has the lowestcost? Electronic or Store?????? Store!!! Why?
Disintermediation Whena manufacturer sells directly to consumers, bypassing the retailers. They lack the skills and are less efficient at performing retailing functions. Retailers can provide a broader array of products and services. Some manufacturer’s use their website as a marketing tool to show customers their available products.
Challenges of Effective Multichannel Retailing Retailers can benefit from using multichannel synergistically. They do this by using one channel to promote the service offered by the other channels. Retailers can benefit by using their stores as “warehouses” for pick or delivery of items ordered online.
Providing an IntegratedShopping Experience Operational differences cause many multichannel retailers to have separate organizations for each channel. However, the trend is to integrate these channels together to make sure that when there is a sale or discount that each channel has the same sale or discount.
Supporting M-Commerce Retailers have created apps and small computer programs to make shopping via mobile phones possible.
Organizing for MultichannelRetailing CentralizedCustomer database Brand Image Merchandise Assortment Pricing Reduction of Channel Migration
Shopping in the Future Page 74 has a great little conversation about how future shopping will be! I read it and slightly felt that we use some of the technologies already A customer database that will save all of your purchases and add like suggestions for the next time -Search engine -Retailers Website Available merchandise, check status of alterations, decision of having merchandise delivered to home, New technologies – self checkout, personalized virtual reality displays
Multi Channel Retailing Questions? Thank you Brandi Swanson Amanda Olson Taylor Reber