Lecture Retailing management (6/e) - Chapter 3: Multi-channel retailing. This chapter discusses the impact of electronic retailing and examines the strategies of successful e-tailers.
Chapter Multi-Channel Retailing McGrawHill/Irwin Retailing Management, 6/e Copyright © 2007 by The McGrawHill Companies, Inc. All rights reserved The World of Retailing Introduction to Retailing Types of Retailers Multi-Channel Retailing Customer Buying Behavior 3-2 The Multi-Channel Retailer Steve Cole/Getty Images Retailer Digital Vision / Getty Images The McGraw-Hill Companies, Inc./Andrew Resek, photographer 3-3 3-4 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 3-5 Benefits Provided by Different Channels 3-6 Unique Benefits Provided by Store Channel • • • • • • Browsing Touch and feel products Personal service Cash payment Immediate gratification Entertainment and social interaction • Risk Reduction (c) Brand X Pictures/PunchStock Royalty-Free/CORBIS 3-7 Benefits Provided by Catalog Channel Convenience Portability, easily accessible Visual presentation Safety Hoby Finn/Getty Images 3-8 Unique Benefits Provided by Internet Channel Convenience Safety Broad selection Detailed information Personalization Virtual communities Problem-solving information More info to evaluate merchandise The McGraw-Hill Companies, Inc./Jill Braaten, photographer Problem Solution Benefits Offered By Electronic Channel • Bundling Information, Services, and Products • Examples – iVillage – The Wedding Channel, The Knot 3-9 Virtual Communities People who seek information, products and services communicate with each other regarding specific issues Royalty-Free/CORBIS 310 330 Resources Possessed by Different Firm Types Website Systems Retailing Skills Fulfillment Brand Reputation Assortments Customer Data E Only Catalog Store-Based Manufacturers Excellent Poor Poor Poor Good Poor Poor Good/Excel Excellent Good/Excel Good/Excel Excellent Poor Excellent Poor Excellent Excellent Good/Excel Poor Poor Poor Good/Excel Poor Poor Store-based Retailers vs Electronic Retail Entrepreneurs 331 • Knowledge of Retailing – Assortment Planning – Distribution Systems • Reputation • Customer Database • Convenient Location for Picking Up, Returning Merchandise, Warranty Service and Installation • Vendor Relationships Royalty-Free/CORBIS Why did Walgreens Beat Out The Electronic Drugstore Chains? 332 • Three thousand conveniently located stores in the US with drive-through windows for picking up prescriptions and merchandise • A distribution system in place for picking, packing and shipping prescription pharmaceuticals and merchandise presently ordered by phone • A strong brand reputation for being trustworthy and helping customers on health-related decisions • Agreements in places with third-party payers (HMOs and insurance companies) to accept and provide pharmaceutical benefits for its customers 333 Resources Possessed by Different Firm Types Website Systems Retailing Skills Fulfillment Brand Reputation Assortments Customer Data E Only Catalog Store-Based Manufacturers Excellent Poor Poor Poor Good Poor Poor Good/Excel Excellent Good/Excel Good/Excel Excellent Poor Excellent Poor Excellent Excellent Good/Excel Poor Poor Poor Good/Excel Poor Poor Advantages of Retailers vs Manufacturers Distribute Merchandise Directly to Customers Provide Assortments Collect and Use Information about Customers Widespread Disintermediation Unlikely 334 Ecommerce Myths • Low Cost of Entry • Overestimate Importance of Technology, Under Estimated Need for Traditional Resources • First Mover Wins • Gets Rid of the Middleman 335 336 Evolution Toward Multi-channel Retailing • Electronic channel gives a way to overcome limitations of existing format • With electronic channel, retailers can reach out to new markets • Builds share of wallet • E-channel enables retailers to give insights into customers’ shopping behaviors Overcoming Existing Format 337 Size of the store is the greatest constraint for stores • By blending store with internet-enabled kiosks, retailers expand assortments offered to shoppers Store based retailers face inconsistent execution • Kiosks can be used by both sales associates and customers for up-to-date product information, stock information and price reduction on clearances 338 Percentage of Cross Channel Shoppers 339 Capabilities for Multi-Channel Retailing To effectively operate and realize the benefits of multi-channel retailing, firms need to have skills in: • • • • • • • • Developing assortments and managing inventory Managing employees in distant locations Distribute merchandise efficiently from DCs to stores Present merchandise in catalogs Present merchandise on websites Process orders electronically Efficient distribution of individual orders to homes Operate information systems for all channels 340 Capabilities for Multi-Channel Retailing 341 Multi-channel Services and Features 342 Issues Confronting a Multi-Channel Retailer • Maintaining Brand Image Across Channels • Merchandise Assortment Offered in Each Channel • Pricing Across Channels Shopping in the Future 343 344 Integration – Key to Multi-Channel Retailing Create a Seamless Experience • Synchronized & consistent service regardless of channel • Ordering • Returns • Refunds Make it Easy Know thy Customer • Needs and preferences • One to One Marketing • Call Center • Shopping Advice • Customer Service Provide Support ... customers for up-to-date product information, stock information and price reduction on clearances 33 8 Percentage of Cross Channel Shoppers 33 9 Capabilities for Multi-Channel Retailing To effectively...The World of Retailing Introduction to Retailing Types of Retailers Multi-Channel Retailing Customer Buying Behavior 3- 2 The Multi-Channel Retailer Steve Cole/Getty Images... Operate information systems for all channels 34 0 Capabilities for Multi-Channel Retailing 34 1 Multi-channel Services and Features 34 2 Issues Confronting a Multi-Channel Retailer • Maintaining Brand