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Web, Nonstore-Based, and

Other Forms ofNontraditional Retailing

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To contrast single-channel and multi-channel

retailing

To look at the characteristics of the three majorretail institutions involved with nonstore-basedstrategy mixes: direct marketing, direct selling,and vending machines with an emphasis ondirect marketing

Chapter Objectives

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To explore the emergence of electronic retailing

through the World Wide Web

To discuss two other nontraditional forms ofretailing: video kiosks and airport retailing

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Chapter Objectives

(cont.)

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6-4

Approaches toRetailing Channels

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6-5

Approaches toRetailing Channels

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Nontraditional retailing also includes

formats that do not fit into store andnonstore-based categories:

Video kiosks

Airport retailing

6-6

Nontraditional Retailing

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Customer is initially exposed to a good or service

through a non-personal medium and then orders

by mail, phone, fax, or computer

6-7

Direct Marketing

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Characteristics of Direct Marketing

Customers

Married

Upper middle class

35-50 years old

Desire convenience,unique items, goodprices

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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 business withoutadditional outlets

6-9

Strategic Business Advantages of Direct

Marketing

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Products often cannot be examined prior to

purchase Costs may be underestimated

Response rates to catalogs under 10%

Clutter exists

Long lead time required Industry reputation sometimes negative

6-10

Strategic Business Limitationsof Direct Marketing

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Collection, storage, and usage of relevant

customer information

* name

* address

* background

* shopping interests

* purchase behavior

Observation of 80-20 rule

6-11

Data-Base Retailing

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Evolving activities

Changing customer lifestyles

Increasing competition

Increasing usage of dual distribution channels

Changing media roles, technological advances,

and global penetration

6-12

Emerging Trends

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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 returnpolicy

6-13

Selection Factors by

Customers

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6-14

Executing a Direct Marketing Strategy

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6-15

Media Selection

Printed catalogs

Direct-mail ads andbrochures

Inserts with monthlycredit card and otherbills (statement

stuffers)

Freestanding displays

Ads or programs inmass media

Banner ads or hotlinks on the Web

Video kiosks

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Overall response rate

Average purchase amount

Sales volume by product category

Value of list brokers

6-16

Outcome Measures

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Vending machines are a cash- or card-operated

retailing format that sells goods and services.

Eliminates the use of sales personnel and allows24-hour sales. Machines placed wherever convenient for

consumers.

6-17

Vending Machines

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The World Wide Web (Web) is a way to access

information on the Internet.

People work with easy-to-use Web addresses(sites) and pages. Web users see words, charts, pictures, and video

while hearing audio. Both Internet and World Wide Web convey

the same central theme: online interactiveretailing.

6-18

Emergence of World Wide Web

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Project a retail presence

Enhance image

Generate sales

Reach geographically-dispersed customers

Provide information to customers

Promote new products Demonstrate new product benefits

6-19

The Role of the Web

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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 potential investors,franchisees, and the media

6-20

The Role of the Web (cont.)

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6-21

Web-BasedRetailSales

Projections

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6-22

Five Stages of

Developing aRetail WebPresence

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6-23

23

Checklist

of Retailer

Decisions

for the

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6-24

Web Strengths

Using the Web

information

entertainment

interactivecommunications

Shopping Online

selection

prices

convenience

fun

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Lack of trust

FearLack of security

Lack of personal communication

6-25

Reasons NOT to Shop Online

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Develop or exploit a well-known, trustworthy

retailer name

Tailor the product assortment for Web shoppers Enable the shopper to click as little as possible

Provide a solid search engine

Use customer information

6-26

Recommendations forWeb Retailers

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A video kiosk is a freestanding, interactive,

electronic computer terminal that displays

products and related information. Some kiosks are located in stores to enhance

customer service; others let consumers placeorders.

There are 2.2 million video kiosks in usethroughout the world, nearly 1 million of whichare Internet-connected.

6-27

Video Kiosks

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Large group of prospective shoppers

Captive audience

Strong sales-per-square-foot of retail space

Strong sales of gift and travel items

Difficulty in replenishment

Longer operating hours Duty-free shopping possible

6-28

Airport Retailing

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Retail Mgt. 11e (c) 2010 PearsonEducation, Inc. publishing as Prentice

Hall

6-29

Airport Retailing and Starbucks

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