PPT 3-1
Types of General Merchandise Retailers
Department Stores
Full Line Discount store
Drug stores
Category Specialists
Off-Price Retailers
PPT 3-2McGraw-Hill/IrwinLevy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 3Chapter 3
Multi-Channel Multi-Channel RetailingRetailing
PPT 3-3
The Multi-Channel Retailer
Retailer
PPT 3-4
Customer
Today’s empowered consumers live in a multi-channel world -- Research products online, buy offline, and demand service everywhere
Web & Email • 24x7 • Visual
Call Center • Convenient • Immediate
Catalog retailing
Brick & Mortar • Touch/Feel • Experience driven
Consumers buy what they want, when they want, wherever they want
PPT 3-5
Why are Retailers Using Multiple Channels to Interact with Customers?
• Customer Want to interact in different ways
• Each channel offers a unique set of benefits for Customers
PPT 3-6
Unique Benefits Provided by Store Channel
• Browsing• Touch and feel products• Personal service• Cash payment • Immediate gratification• Entertainment and social
interaction
PPT 3-7
Benefits Provided by Catalog Channel
Convenience easily accessible
Visual presentation
PPT 3-8
Unique Benefits Provided by Internet Channel
• Convenience• Safety• Broad selection• Detailed information• Personalization• Problem-solving
information
PPT 3-9
Internet Users Across the Globe
PPT 3-10
Illustration - Radha- Part 1
Radha sits in front of her home electronic center reviewing her engagement calendar displayed on her TV screen. She sees that she has accepted an invitation to a formal cocktail party on Friday night and decides to buy a new dress for the occasion. She switches to her personal electronic shopper, SOHA, and initiates the following exchange:
SOHA: Do you wish to browse, go to a specific store, or buy a specific item?
Radha: Specific item.
SOHA: Type of item?
Radha: Black dress.
SOHA: Occasion? (menu appears on screen)
Radha: Formal cocktail party
PPT 3-11
Illustration – Radha - Part 2
SOHA: Price range? (menu appears)
Radha: Rs. 300 Rs. 500
SOHA: 497 items have been identified. How many do you want to review?
Radha: 5
Five pictures of Radha in each dress appear on the screen with the price, brand name, and the IHS retailer selling it listed beneath each one. Radha clicks on one of the dresses and it is enlarged on the screen. Another click and Radha views the dress from different angles. Another click and specifications such as fabric and laundering instructions appear. Radha repeats this routine with each dress. She selects the one she finds most appealing. SOHA knows her measurements and picks the size that fits her best.
PPT 3-12
Illustration - Radha Jamison - Part 3
SOHA: How would you like to pay for this? (menu appears)
Radha: American Express
SOHA: Nieman Marcus [the firm selling the dress Radha selected] suggests a Xie scarf and Koslow belt to compliment the
dress.
[Radha clicks on the items and they appear on the screen. Radha inspects these items as she inspected the dresses. She decides to purchase both accessories. SOHA then asks Radha about delivery. Radha selects two day delivery at a cost of $5.00]
SOHA: Just a reminder. You have not purchased hosiery in 30 days. Do you wish to reorder at this time?
Radha: Yes
SOHA: Same shades?
Radha: Yes
PPT 3-13
Why Do People Patronize a Retailer?
Merchandise Assortments
ServiceConvenience
Information to make good selections
Price - Total cost to customerGo to store, find right merchandise, return
merchandise
Entertainment
Social interaction
PPT 3-14
Benefits of Electronic Channel
Increased AssortmentMore Information to Evaluate Merchandise
Drill Down as Much as You Want
Full motion Video
Personalization
Information for Solving Problems, Not Just Merchandise Characteristics
PPT 3-15
Virtual Communities
Virtual community is a network of members sharing common interests that interact with each other electronically.
Examples:IVillage - Women
Garden.Com - Gardeners
PPT 3-16
Value Proposition for Members
Meaningful personal relationships -- Opportunity to interaction with other people with common interests draws people to community.
Entertainment
Access to competing vendors and publishers
PPT 3-17
Who Is Best Suited to Organize a Virtual Community?
Concerned Consumers
Suppliers
Retailers
PPT 3-18
What Merchandise Will Be Sold Successfully Over the Internet
“Look and See” attributes vs. “Touch and Feel” attributes (?)
Degree to which information can be used to predict satisfaction prior to purchase
Gifts
Services
Might not need to “Touch and Feel”
PPT 3-19
Reasons for Becoming a Multi-Channel Retailer
-Increase Share of Wallet
-Overcome Limitations of Existing Format
-Expand Market
-Brand Name, Inventory, Customer Database
-Develop Insights in Customer Shopping Behavior
PPT 3-20
Issues Confronting a Multi-Channel Retailer
Maintaining Brand Image Across Channels
Merchandise Assortment Offered in Each Channel
Pricing Across Channels
PPT 3-21
Customers Want to Recognized No Matter What Channel they Use
Catalog
Internet
Call Center
CustomerRelationshipBrick & Mortar
Customers
PPT 3-22
Integration – Key to Multi-Channel Retailing
•Create a Seamless •Experience
•Make it Easy •Provide Support
•Know thy •Customer
••• Ordering ••• Returns••• Refunds
••r•••Shopping
•Advice•••Customer
•Service
•••Needs and•preferences
•••One to One•Marketing
•••consistent service•regardless•of channel
PPT 3-23
Source: Progressive Grocer, 01 Feb 00; Grocery Headquarters, 01 Feb 00.
Consumer does not find desired item in the store.
Consumer goes to Catalog to search for product
Catalog links to chain’s web-site allowing consumers to find and purchase item
Consumer places order online for home delivery or store pick-up at a later time
Illustration of Multi-Channel Integration