CHAPTER 17 Outlet Selection and Purchase McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc All rights reserved PART IV: CONSUMER DECISION PROCESS 17-2 Learning Objectives Describe how retailing is evolving L01 L01 Discuss the Internet and mobile as part of multi- and omni-channel shopping L02 L02 Explain the retail and consumer attributes that affect outlet selection L03 L03 Summarize the in-store and online influences on brand choice L04 L04 Understand how purchase plays a role in the shopping process L05 L05 17-3 Consumer Behavior In The News… What Are the Top Factors Driving Consumer Interest in an Apparel Retailer? Source: D Warmath, “Get in the Game or Lose,” Advertising Age, August 25, 2008, p 15 17-4 Consumer Behavior In The News… Top Factors in Apparel Retailing Latest Trends High-Quality Products Brand Names I want Broad Selection Full Range of Services NOTE: Factors vary by category Number factor in home products is broad selection Source: D Warmath, “Get in the Game or Lose,” Advertising Age, August 25, 2008, p 15 17-5 The Evolving Retail Scene Internet Retailing • Characteristics of Online Shoppers • Barriers to Internet Shopping Store-based Retailing The Internet as Part of a Multi-Channel Strategy Mobile as Part of an Omni-Channel Strategy 17-6 Video Application The following Video Clip demonstrates how M&Ms gets personal with its multichannel strategy! 17-7 17-8 17-8 The Evolving Retail Scene Internet Retailing Internet retailing continues to evolve and grow as a strong retail channel: 17-9 The Evolving Retail Scene Consumers shop online for reasons similar to those for shopping from catalogs: 17-10 Attributes Affecting Retail Outlet Selection Outlet Image Online Image 17-22 Attributes Affecting Retail Outlet Selection Retailer Brands Store brands are closely related to store image, and at the extreme, the store or outlet is the brand Traditionally, retailers carried only manufacturers' brands, and only a few, such as Sears and Wards, developed their own brands Increasingly retailers such as Walmart and Target are developing and promoting high-quality brands with either the store’s name or an independent name The key to success of store brands high quality at a reasonable price 17-23 Attributes Affecting Retail Outlet Selection Retail Advertising Expenditure of Individuals Drawn to a Store by an Advertised Item Source: The Double Dividend (New York: Newspaper Advertising Bureau Inc., February 1977 17-24 Attributes Affecting Retail Outlet Selection Outlet Location and Size Location and size play an important role in store choice All else equal, consumers generally select the closest store Outlet size is also important Generally, customers prefer larger outlets over smaller outlets The retail attraction model, or the retail gravitation model, is used to calculate the level of store attraction based on store size and distance from the consumer 17-25 Consumer Characteristics and Outlet Choice Two consumer characteristics that are particularly relevant to store choice: Perceived Risk Shopping Orientation 17-26 Consumer Characteristics and Outlet Choice A p athe tic Shop p e rs 16% Bargain Enthus ias tic Se ek e rs 20% Shop p e rs 22% Shopping Orientation Segments B as ic Des tination Shop p ers 22% s hop p ers 21% 17-27 In-Store and Online Influences on Brand Choices Supermarket Decisions: Two-Thirds Are Made In-Store 17-28 In-Store and Online Influences on Brand Choices Strategies used by manufacturers and retailers to influence in-store and online decisions: Point-Of-Purchase Materials Price Reductions and Promotional Deals Outlet Atmosphere Stockouts Website Functioning and Requirements Mobile Apps Sales Personnel 17-29 In-Store and Online Influences on Brand Choices Point-Of-Purchase Materials Shelf-Based Point-of-Purchase Materials 17-30 In-Store and Online Influences on Brand Choices Price Reductions and Promotional Deals Price reductions and promotional deals • coupons • multiple-item discounts, and • gifts are generally accompanied by the use of some point-of-purchase materials 17-31 In-Store and Online Influences on Brand Choices Outlet Atmosphere 17-32 In-Store and Online Influences on Brand Choices Stockouts Stockouts affect a consumer’s purchase decision Three types of perceived costs: Substitution costs Transaction costs Opportunity costs 17-33 In-Store and Online Influences on Brand Choices Web Site Functioning and Requirements Consumers often research online then buy in traditional stores However, losses also occur during the online shopping process A DoubleClick study found the following reasons for shopping cart abandonment: 17-34 In-Store and Online Influences on Brand Choices Mobile and Mobile Apps Mobile marketing is clearly seen as next horizon for marketers local mobile search is changing how consumers find stores and brands within stores mobile apps increasingly play role in how consumers shop, find the best deals, etc 17-35 In-Store and Online Influences on Brand Choices Sales Personnel The effectiveness of sales efforts is influenced by the interaction of • • • the salesperson’s knowledge, skill, and authority the nature of the customer’s buying task the customer-salesperson relationship In the online context, marketers are testing online sales clerks, called avatars, that interact with customers as they shop on their website 17-36 ... manufacturers' brands, and only a few, such as Sears and Wards, developed their own brands Increasingly retailers such as Walmart and Target are developing and promoting high-quality brands with either... Mobile as Part of an Omni-Channel Strategy 17- 6 Video Application The following Video Clip demonstrates how M&Ms gets personal with its multichannel strategy! 17- 7 17- 8 17- 8 The Evolving Retail Scene... calculate the level of store attraction based on store size and distance from the consumer 17- 25 Consumer Characteristics and Outlet Choice Two consumer characteristics that are particularly relevant