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Berman ch 06 11e

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Berman ch 06 11e

  1. 1. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-1Web, Nonstore-Based, andOther Forms ofNontraditionalRetailingRETAILMANAGEMENT:A STRATEGICAPPROACH11th Edition11th EditionBERMAN EVANS1
  2. 2. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-2Chapter ObjectivesTo contrast single-channel and multi-channel retailingTo look at the characteristics of the threemajor retail institutions involved withnonstore-based strategy mixes: directmarketing, direct selling, and vendingmachines – with an emphasis on directmarketing2
  3. 3. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-3Chapter Objectives (cont.)To explore the emergence of electronicretailing through the World Wide WebTo discuss two other nontraditional forms ofretailing: video kiosks and airport retailing3
  4. 4. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-4Figure 6-1a: Approaches toRetailing Channels4
  5. 5. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-5Figure 6-1b: Approaches toRetailing Channels5
  6. 6. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-6Nonstore 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 $180annually as of 20126
  7. 7. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-7Nontraditional Retailing Nontraditional retailing also includesformats that do not fit into store andnonstore-based categories: Video kiosks Airport retailing7
  8. 8. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-8Direct MarketingCustomer is initially exposed to a good orservice through a non-personal medium andthen orders by mail, phone, fax, or computerAnnual U.S. sales exceed $325 billion (includingthe Web)Other leading countries include* Japan* Germany* Great Britain8* France* Italy
  9. 9. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall6-9Characteristics of Direct MarketingCharacteristics of Direct MarketingCustomersCustomersMarriedUpper middle class35-50 years oldDesire convenience,unique items, goodprices
  10. 10. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-10Strategic Business Advantages of DirectStrategic Business Advantages of DirectMarketingMarketing 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 businesswithout additional outlets10
  11. 11. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-11Strategic Business LimitationsStrategic Business Limitationsof Direct Marketingof Direct Marketing Products often cannot be examined prior topurchase Costs may be underestimated Response rates to catalogs under 10% Clutter exists Long lead time required Industry reputation sometimes negative11
  12. 12. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-12Data-Base Retailing Collection, storage, and usage of relevantcustomer information* name* address* background* shopping interests* purchase behavior Observation of 80-20 rule12
  13. 13. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-13Emerging Trends Evolving activities Changing customer lifestyles Increasing competition Increasing usage of dual distributionchannels Changing media roles, technologicaladvances, and global penetration13
  14. 14. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-14Selection 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 sitefor ordering Credit card acceptance Speed of promised delivery time Competitive prices Satisfaction with past purchases and good returnpolicy14
  15. 15. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-15Figure 6-4: Executing a Direct MarketingFigure 6-4: Executing a Direct MarketingStrategyStrategy15
  16. 16. 6-16Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice HallMedia SelectionMedia SelectionPrinted catalogsDirect-mail ads andbrochuresInserts with monthlycredit card and otherbills (statementstuffers)Freestanding displaysAds or programs inmass mediaBanner ads or hotlinks on the WebVideo kiosks16
  17. 17. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-17Outcome MeasuresOutcome Measures Overall response rate Average purchase amount Sales volume by product category Value of list brokers17
  18. 18. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-18Direct Selling Direct selling includes personal contactwith consumers in their homes (and othernonstore locations such as offices) andphone solicitations initiated by retailer. Annual sales of $31 billion in the U.S., where15 million people are employed (more than80 percent part-time). Annual foreign revenues of $85 billion,generated by 48 million salespeople.18
  19. 19. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-19Table 6-1: U.S. Direct Selling Industry
  20. 20. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-20Vending Machines Vending machines are a cash- or card-operated retailing format that sells goodsand services. Eliminates the use of sales personnel andallows 24-hour sales. Machines placed wherever convenient forconsumers. 95 percent of the $50 billion in annual U.S.vending machine sales involve hot/coldbeverages and food items.20
  21. 21. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-21Emergence of World Wide Web The World Wide Web (Web) is a way to accessinformation on the Internet. People work with easy-to-use Web addresses(sites) and pages. Web users see words, charts, pictures, andvideo while hearing audio. Both “Internet” and “World Wide” Webconvey the same central theme: onlineinteractive retailing.21
  22. 22. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-22The 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 benefits22
  23. 23. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-23The 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 potentialinvestors, franchisees, and the media23
  24. 24. 6-24Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice HallFigure 6-6:Web-BasedRetail SalesProjections24
  25. 25. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-25Figure 6-8: FiveStages ofDeveloping aRetail WebPresence25
  26. 26. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-2626Figure 6-9:Checklistof RetailerDecisionsfor theWeb
  27. 27. 6-27Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice HallWeb StrengthsWeb Strengths Using the Webinformationentertainmentinteractivecommunications Shopping Onlineselectionpricesconveniencefun27
  28. 28. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-28Reasons NOT to Shop OnlineReasons NOT to Shop OnlineLack of trustFearLack of securityLack of personal communication28
  29. 29. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-29Recommendations forRecommendations forWeb RetailersWeb Retailers Develop or exploit a well-known,trustworthy retailer name Tailor the product assortment for Webshoppers Enable the shopper to “click” as little aspossible Provide a solid search engine Use customer information29
  30. 30. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-30Video Kiosks A video kiosk is a freestanding, interactive,electronic computer terminal that displaysproducts and related information. Some kiosks are located in stores toenhance customer service; others letconsumers place orders. There are 2.2 million video kiosks in usethroughout the world, nearly 1 million ofwhich are Internet-connected.30
  31. 31. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-31Airport Retailing Large group of prospective shoppers Captive audience Strong sales-per-square-foot of retailspace Strong sales of gift and travel items Difficulty in replenishment Longer operating hours Duty-free shopping possible31
  32. 32. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-32Figure 6-13: Airport Retailing and Starbucks32
  33. 33. Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6-33All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted, inany form or by any means, electronic, mechanical,photocopying, recording, or otherwise, without the priorwritten permission of the publisher. Printed in the UnitedStates of America.

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