Multichannel RetailingTaylor ReberAmanda OlsonBrandi Swanson

Multi Channel Retailers Retailer that sells merchandise or

services through more than one channel

Retail Channel A 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 Is a 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, weight loss products, vitamins, and books, videos, or toys.

Television Home Shopping

Is a 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 Catalog Channel- -

Safety Convenience

Benefits of Retail Channels Internet Channel - -

Broader/Deeper Assortments Time to Evaluate Merchandise Personalization Perceived Risks

Benefits of Multichannel Retailing 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 Retailing Issues The cost of selling products through the

different channels. The potential for disintermediation

Which Channel has the lowest cost? Electronic or Store??????

Store!!!

Why?

Disintermediation When a 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 Integrated Shopping 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 Multichannel Retailing Centralized Customer 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 SwansonAmanda OlsonTaylor Reber