Building and Sustainable relationship in retailing

7/29/2019 Building and Sustainable relationship in retailing

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Building andSustaining

Relationshipsin Retailing

RETAILMANAGEMENT


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Chapter Objectives

To explain value

role in building and sustaining

relationshipscustomer relationships &channel

relationships


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Chapter Objectives (cont.)

relationship building

between goods and services retailers

impact of technology

on relationships

interplay between

retailers ethical performancerelationships in retailing


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What is Value?

The bottom line:

Consumers will demand more for

less from the shopping experienceThey will spend less time shopping

They will split the

commodity-shopping tripvalue-added shopping trip


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What is Value?

Channel Perspective

Value is a series ofactivities and

processes- the valuechain - that providesa certain value forthe consumer

Customer Perspective

Value is a perceptionthat the shopper hasof the value chain

It is the view of all thebenefits from apurchase vs. price

paid


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Retail Value Chain

total bundle of benefits

offered to consumers

through a channel of distribution


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Retail Value chain

Store location

parking,

retailer ambience,

customer service,

brands/products

carried,

product quality,

retailers in-stock

position, shipping,

prices,

image, and other elements


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3 Aspects of Value-Oriented

Retail Strategy

Expected

Augmented

Potential


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Potential Pitfalls to Avoid in Planning

a Value-Oriented Retail Strategy Planning value

with just a price perspective

Providing value-enhanced services

that customers do not want

or will not pay extra for


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Potential Pitfalls to Avoid in Planning

a Value-Oriented Retail Strategy Competing in the wrong

value/price segment

Believing augmented elements

alone create value

Paying lip service

to customer service


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An Emphasis on Solid Retail

Relationships


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Customer Service

Expected customerservice is theservice level that

customers want toreceive from anyretailer, such asbasic employeecourtesy

Augmented

customerserviceincludes the

activities thatenhance theshopping experienceand give retailers acompetitiveadvantage


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Figure 2-4: Classifying Customer

Services


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Fundamental DecisionsWhat customer services are expected and what

customer services are augmented for a particular

retailer?

What level of customer service is proper to

complement a firms image?

Should there be a choice of customer services?

Should customer services be free?

How can a retailer measure the benefits of

providing customer services against their costs?

How can customer services be terminated?


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Augmented Services Going Above

and Beyond


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Table 2-1: Typical

Customer Services Credit

Delivery

Alterations/Installations

Packaging/Giftwrapping

Complaints/Returnhandling

Gift certificates

Trade-ins

Trial purchases

Special sales

Extended store hours

Mail and phone

orders


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Table 2-1: Miscellaneous

Customer Services Bridal registry

Interior designers

Personal shoppers

Ticket outlets

Parking

Water fountains

Pay phones Baby strollers

Restrooms

Restaurants

Baby-sitting

Fitting rooms

Beauty salons

Fur storage

Shopping bags Information


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Figure 2-6: Turning Around Weak

Customer ServiceFocus on

Customer Concerns

Empower Frontline

Employees

Show That You Are

Listening

Express Sincere

Understanding

Apologize and Rectify

the Situation


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Principles of Category

Management Retailers listen more to customers

Profitability is improved because inventorymatches demand more closely

By being better focused, each department ismore desirable for shoppers

Retail buyers are given more responsibilitiesand accountability for category results

Retailers and suppliers must share data and bemore computerized

Retailers and suppliers must plan together


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Elements Contributing to Effective

Channel Relationships


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Three Kinds of

Service RetailingRented goods services

Owned goods services

Nongoods services


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Four Characteristics of

Services RetailingIntangibility

Inseparability

PerishabilityVariability


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Figure 2.8a: Characteristics of

Service RetailingIntangibility

No patent protection possible

Difficult to display/communicate service benefits

Service prices difficult to set

Quality judgment is subjective

Some services involve performances/experiences


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Figure 2.8b: Characteristics of

Service RetailingInseparability

Consumer may be involved in service production

Centralized mass production difficult

Consumer loyalty may rest with employees


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Figure 2.8c: Characteristics of

Service RetailingPerishability

Services cannot be inventoried

Effects of seasonality can be severe

Planning employee schedules can be complex


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Figure 2.8d: Characteristics of

Service RetailingVariability

Standardization and quality control hard to achieve

Services may be delivered in locations

beyond control of management

Customers may perceive variability

even when it does not actually occur


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Consumer Perceptions of Service

Retailing


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A Self-Checkout Station


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Consumer Advantages to

Self-CheckoutShorter lines

Increased speed

Privacy


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Thank you

Building and Sustainable relationship in retailing

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