Chap. 3 multi channel retailing. quiwa
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Transcript of Chap. 3 multi channel retailing. quiwa
Chapter 3
Pasig Catholic College
Multi-Channel Retailing
What is Retailing?
It is a high-tech, high-touch growth industry that offers opportunities for people to make profit and loss decisions early in their careers.
Multichannel Retailing Retailers that sell merchandise or
services through more than one channel.
Retailers can leverage the unique benefits provided by each to attract and satisfy more customers.
Questions:1. What are the unique customer benefits offered
by the three retail channels: stores, catalogs, and the Internet?
2. Why are retailers moving toward using all three channels?
3. How do Multichannel retailers provide more value to their customers?
4. What are the key success factors in Multichannel retailing?
5. How will technology might affect the future shopping experience?
Benefits Provided by Different Channels
Stores Catalogs InternetBrowsing Convenience Broad selection
Touching and feeling products
Safety Detailed problem-solving Information
Personal service Visual presentation Personalization
Cash payment
Entertainment & Social interactionImmediate gratification
Risk reduction
Stores Browsing Touching and feeling products Personal service Cash payment Entertainment & Social interaction Immediate gratification Risk reduction
Browsing Many consumers surf the Internet
and look through catalogs for ideas, though most consumers still prefer browsing in stores.
Touching and Feeling Products Opportunity for customers to use all
five of their senses – touching, smelling, tasting, seeing, and hearing.
Personal Service Sales associates still have the
capability of providing meaningful, personalized information.
Cash Payment Stores are the only channel that
accept cash payment.
Entertainment and Social Experience In-store shopping can be a
stimulating experience for some people. It provides a reality in their daily routine and enabling them to interact with friends.
Immediate Gratification Stores have the advantage of
allowing customers to get the merchandise immediately after they buy it.
Risk Reduction The store will be there to receive
defective or unsuitable merchandise and issue you a credit for it.
Catalog Channel Provides some benefits to customers
that are not available from the store or Internet channels.
ConvenienceSafetyVisual presentation
Convenience Consumers have the added
convenience of not being restricted to a place with Internet access and a computer;
They can look through a catalog on the beach or propped up in bed.
Safety Security in malls and shopping areas
is becoming an important concern for many shoppers, particularly with the elderly.
Quality of Visual Presentation The photographs of merchandise in
catalogs, while not as useful as in-store presentation, are superior to the visual information that can be displayed on a CRT screen.
INTERNET CHANNEL Provides convenience and safety benefits
offered by catalogs and other non-stores formats.
Has the potential to offer a greater selection of products and more personalized information about products and services.
Broad selection Detailed problem-solving Informatio
n Personalization
Broader Selection The vast number of alternatives
available to consumers.
Detailed Problem-Solving Information Provision of information to help
customers make better purchase decisions.
Customers can format the information so they can effectively use it when evaluating products.
Personalization Most significant potential benefit of
the internet channel is its ability to personalized the information for each customer economically.
Personalized Customer ServicePersonalized OfferingPersonalization in the Future
Personalized Customer Service Enables electronic retailers to
automatically send a proactive chat invitation to customers on the site.
Offering live, online chats. ONLINE CHAT – provides customers with the
opportunity to click a button at anytime and have an instant messaging e-mail or voice conversation with a customer service representative.
Personalized Offering Provides an opportunity for retailers
to personalized their offerings for each of their customers.
Recommendation of complimentary merchandise.
Personalization in the Future Benefits that will be available to
consumers’ shopping via the Internet in the future.
Access to more retailers and deeper merchandise assortments.
-Hesitate to buy.-Limited information-Offer little benefits
-Provides information about the consistency and quality of merchandise
-Provides information about the consistency and quality of merchandise.
-Limited information -Offer little benefits
-Limited information-Offer little benefits
-Using of 3D / zoom-Virtual models-digitized body
-Limited information -Offer little benefits-consume time & effort
-Limited information-saving time & effort
-Useful information-saving time & effort
-Limited information -Offer little benefits-consume time & effort
-Limited information -Offer little benefits-consume time & effort
-Useful information-saving time & effort-prefer by banks
Role of
Using
Gifts
Services
Store Catalogs Internet
Touch and Feel Attributes
Technology
Brands
Evolution Toward Multi-channel
Retailing
Four Reasons:1st –
Overcoming Limitations of an existing format
2nd – Expanding Market Presence
3rd – Increasing Share of Wallet
4th – Insights into Customer Shopping Behavior
Overcoming Limitations of an existing Format
The amount of merchandise that can be displayed and offered for sale in store is limited.
Limitation that store-based retailers face is inconsistent execution.
Expanding Market Presence Adding an electronic channel is particularly
attractive to firms with strong brand names but limited locations and distribution.
Store
Catalog Web Site
5%
19% 43%
11%
6%
16%
Increasing Share of Wallet Electronic and catalog channels drive
more purchases from the stores, and the stores drive more purchases from the Web site.
Store-based retailers can also leverage their stores to lower the cost of fulfilling orders and processing retuned merchandised if they use the stores as “warehouse” for gathering merchandise for delivery customers.
Insights into Customer Shopping Behavior
An electronic channel can provide valuable insights into how and why customers shop and are dissatisfied or satisfied with the experience.
Offers the opportunity to collect more detailed information about customer preferences.
Capabilities Needed for
Multichannel Retailing
Skills to operate and realize the benefits of Multi-channel retailing.
1. Developing assortments and managing inventory
2. Managing employees in distant locations3. Distributing merchandise efficiently from
distribution centers to stores4. Catalogs5. Web sites6. Processing orders electronically7. Efficiently distributing individual orders to
homes8. Operating communications and information
systems
Capabilities Needed for Multichannel Retailing
Develop assortments & manage inventory High High Low Low
Manage people in remote locations High Low Low Low
Efficiently distribute merchandise to store High Low Low High
Present merchandise effectively in a printed format & distribute catalogs
Med. High Low Low
Present merchandise effectively on a web site Med. High High Low
Process orders from individual customers electronically Med. High High Low
Efficiently distribute merchandise to homes & accept returns
Med. High Low Low
Integrate information systems to provide a seamless customer experience across channels
Low Med. High low
Store-Based RetailersCatalogs Retailers
Niche Electronic RetailersMerchandise Manufacturers
Issues in Multichannel
Retailing
Integrated Shopping ExperienceBrand ImageMerchandise AssortmentsPricing
Integrated Shopping Experience Many retailers are finding it easier to
offer integration one step at a time rather than trying to link everything from the start, which could be financially and technologically daunting for them and alienate consumers of things don’t go well.
Brand Image Multichannel retailers need to project
the same image to their customers across all channels.
Customers enter the Web site through an image of the red doors used in its stores and are greeted by the phrase,“Always classic, never closed.”
Merchandise Assortments Customers expect that everything
they seen in a retailer’s store will also be available on its Web site.
Many multi-channel retailers have tailored the assortments sold on their web site to include only products their customers are likely to buy over the Internet.
Pricing Represents another difficult decision
for a multi-channel retailer.
Retailers need to adjust their pricing strategy because of the competition they face in different channels.
Multichannel retailers are beginning to offer new types of pricing, like auctions, that take advantage of the unique properties of the Internet.
Summary- Retailing vs. Multi-Channel Retailing- Importance and contribution of
utilizing multi-channels- Benefits in adopting a multi-channel
strategy- Three basic channels and skills
needed to realize benefits of multi-channel retailing
- Issues in multi-channel retailing
ConclusionThe pervasiveness of information
and communication technologies has shifted economic power from retailers, which once could dictate the terms of purchase, to consumers, who can now change loyalties as easily as they send e-mail. Recapturing those consumers is the top priority, and success of this can be done if loyalty can be rebuild quickly, efficiently and without losing control of costs.
ConclusionAn effective and profitable
strategy for multi-channel retailing requires far more than simply bolting on a dot.com division or a telesales service center. A retailer’s retail channels must operate on an integrated whole. Channels must have no conflict between channels, no cannibalizing with each other.