Chapter 3 multichannel retailing

2. RETAIL CHANNEL
• MOST COMMON CHANNEL
• WAY RETAILER’S SELL + DELIVER MERCHANDISE + SERVICES TO ITS CUSTOMERS.
• THEY ALSO USE A VARIETY OF NONSTORE CHANNELS WHICH ARE LISTED BELOW:
• INTERNET TELEVISION HOME SHOPPING
• MOBILE DIRECT-RESPONSE TV
• CATALOGS AND DIRECT MAIL AUTOMATED RETAILING (VENDING MACHINES)
• DIRECT SELLING

3. CHANNELS
• OPPORTUNITY TO COMPLETE A TRANSACTION- SELL + DELIVER MERCHANDISE
• PRIMARY OBJECTIVE IS TO COMPLETE TRANSACTIONS
• MEDIUM
• PRIMARILY USED TO COMMUNICATE INFO TO CONSUMERS

4. MULTICHANNEL RETAILING
• ABILITY TO USE MORE THEN ONE CHANNEL TO SELL + DELIVER MERCHANDISE + SERVICES TO
CONSUMERS
• OMNI RETAILING
• COORDINATED MULTICHANNEL RETAIL OFFERING THAT PROVIDES A SEAMLESS CUSTOMER EXPERIENCE WHEN
USING ALL OF THE RETAILER’S SHOPPING CHANNELS

5. THE BIRTH OF MULTICHANNEL RETAILING
• 1925- SEARS OPENED ITS FIRST STORE, 33 YEARS AFTER IT LAUNCHED ITS CATALOG OFFERING
MERCHANDISE PREVIOUSLY UNAVAILABLE TO THE AMERICAN POPULATION ASA WHOLE.

6. INTERNET RETAILING
• RETAILING INTERACTING WITH CONSUMERS THROUGH THE INTERNET
• ELECTRONIC CHANNEL- USING INTERNET THROUGH A TRADITIONAL COMPUTER
• MOBILE CHANNEL- USING THE INTERNET THROUGH A SMART PHONE

7. CATALOG CHANNEL
• NON-STORE RETAIL CHANNEL OFFERING COMMUNICATION THROUGH CATALOGS MAILED TO CUSTOMERS

8. DIRECT- RESPONSE TV CHANNEL
• CUSTOMERS WATCH TV AD’S THAT DEMONSTRATES THE MERCHANDISE + THEN GIVES A WAY FOR
CUSTOMERS TO PLACE ORDERS FOR THAT MERCHANDISE
• INFOMERCIAL- 30 TO 60 MINUTES LONG MIXING ENTERTAINMENT WITH PRODUCT DEMONSTRATIONS
• COMMERCIAL- 1 TO 2 MINUTES IN LENGTH GIVING A BRIEF OVERVIEW OF THE PRODUCT

9. TELEVISION HOME SHOPPING CHANNEL
• RETAIL CHANNEL WHICH THE CUSTOMERS WATCH THETV NETWORK WITH PROGRAMS THAT
DEMONSTRATE MERCHANDISE + THEN PLACE ORDERS FOR THAT MERCHANDISEUSUALLY BY PHONE OR
THE INTERNET
• HSN + QVC
• ANNUAL SALES ABOUT $20 BILLION
• ADVANTAGE- ALLOWS CUSTOMER TO SEE HOW THE PRODUCT WORKS AND DEMONSTRATIONS THAT PERSUADE
THE CUSTOMER TO BUY IT.

10. DIRECT SELLING CHANNEL• SALESPEOPLE INTERACT WITH CUSTOMER FACE- TO – FACE IN A CONVENIENT LOCATION
• AT THEIR HOME
• AT THEIR WORK
• PARTY PLAN SYSTEM
• PARTY TO TRY THE PRODUCT AND SEE WHAT IT LOOKS LIKE
• EXAMPLE: AVON, 31, PARTY LIGHT,
• MULTILEVEL SYSTEM
• INDEPENDENT BUSINESS PEOPLE SERVER AS DISTRIBUTORS
• EXAMPLES: THRIVE, SCENTSY
• PYRAMID SCHEME
• FIRM AND PROGRAM ARE DESIGNED TO SELL MERCHANDISE + SERVICES TO OTHER DISTRIBUTORS, RATHER THAN END-USERS

11. PYRAMID SCHEME

12. AUTOMATED RETAILING (VENDING MACHINES) CHANNEL
• MERCHANDISE OR SERVICES ARE STORED IN A MACHINE + DISPENSED TO CUSTOMERS WHEN THEY
DEPOSIT CASH OR USE A CREDIT CARD
• PLACED AT CONVENIENT, HIGH TRAFFIC LOCATIONS
• SLOWLY DYING AND SOON WILL BE DECEASED

13. BENEFITS OF THE STORE CHANNEL
• TOUCHING AND FEELING PRODUCTS
• PERSONAL SERVICE
• RISK REDUCTION
• IMMEDIATE GRATIFICATION
• ENTERTAINMENT AND SOCIAL EXPERIENCE
• BROWSING
• CASH PAYMENT

14. BENEFITS OF CATALOG CHANNEL
• SAFETY AND CONVENIENCE
• BROWSE AND ORDER MERCHANDISE 24/7
• EASY REFERENCE

15. BENEFITS OF INTERNET CHANNEL
• DEEPER AND BROADER SELECTION
• MORE INFORMATION FOR EVALUATING MERCHANDISE
• PERSONALIZATION
• EXPAND MARKET PRESENCE
• PROVIDE INFORMATION TO COMPARE SHOPPING EXPERIENCE ACROSS CHANNELS
• PERCEIVED RISKS IN INTERNET SHOPPING

16. COMPARISON OF ELECTRONIC AND MOBILE PHONE CHANNELS
Electronic Mobile
Stationary Portable
Large Display Small Display
Non-location aware Location aware
Hit and Miss with technology Touch technology

17. CHALLENGES: MULTICHANNEL SUPPLY
CHAINS AND INFORMATION SYSTEMS
• STRUGGLE TO PROVIDE AN INTEGRATED SHOPPING EXPERIENCE
• DISTRIBUTION SEPARATE FROM RETAIL
• PUTTING TOGETHER A GOOD SYSTEM

18. CENTRALIZED VS. DECENTRALIZED MULTICHANNEL RETAILING
• CENTRALIZED: SAME ALL AROUND
• DECENTRALIZED: TAILORING TO DIFFERENT TARGET MARKETS

19. CONSISTENT BRAND IMAGE ACROSS CHANNELS
• THE MESSAGE IN THE STORE, ADS, AND WEB/OTHER RETAIL CHANNELS SHOULD BE THE SAME
• EXAMPLE: LIBERTY TAX, MICHELIN TIRES, GRANITE, ECT.

20. MERCHANDISE ASSORTMENT
• NARROW ASSORTMENT IN STORE, BROAD ONLINE
• STORE CHANNELS BETTER SUITED FOR TOUCH AND FEEL
• EXAMPLES: TRY STUFF USING THE 5 SENSES
• INTERNET CHANNEL IS MORE FOR LOOK AND SEE
• EXAMPLE: PRICE AND COLOR

21. PRICING
• EXPECT PRICES TO BE THE SAME ACROSS THE BOARD
• SOMETIMES PRICE ADJUST FOR COMPLETION
• EXAMPLE: BARNS AND NOBLE

22. REDUCTION OF CHANNEL MIGRATION
• CHANNEL MIGRATION
• CONSUMER GATHERS INFORMATION ON IDEAS FROM ONE CHANNEL AND PURCHASE THE PRODUCT FROM A
COMPETITORS CHANNEL
• MOST COMMON IS SEARCH ONLINE FOLLOWED BY PURCHASE IN STORE
• 78% OF PEOPLE DO THIS
• SHOWROOMING
• GOES TO STORE TO LEARN ABOUT BRAND OR PRODUCT THEN SEARCH INTERNET FOR THE SAME PRODUCT WITH
A LOWER PRICE.

23. HOW A RETAILER CAN REDUCE SHOWROOMING
• 1. PROVIDE BETTER CUSTOMER SERVICE
• 2. OFFER RELEVANT INFORMATION BASED ON DATA THE RETAILER HAS COLLECTED ABOUT THE
CUSTOMERS
• 3. PROMOTING PRIVATE-LABEL MERCHANDISE THAT CAN BE PURCHASED ONLY FROM THE RETAILER

24. THE FUTURE OF MULTICHANNEL RETAILING