The Integration of Online and

Offline Retail:

Analysis and

Recommendations on How to

Implement

Dean Bantis

Morgan Fagan

Judah Fried

Peter Skevas

Kiriaki Tzanis

Emily Scognamiglio

Christopher Djonovic

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TABLE OF CONTENTS

PAGE #

Table of Contents ............................................................................................................................2

Introduction................................................................................................................................. 3-4

Analysis of Online and In-store Integration.............................................................................. 5-10

The Evolution of Beef Jerky ……………………………………………………… 11-12

Evolution of Ordering Food Online with Its Technology…………….…………….. 13-16

Beef Jerky Facts and Statistics……………………………………………………… 17-20

RECOMMENDATIONS

RECOMMENDATION 1 – Display of Inventory ..................................................................21-22

RECOMMENDATION 2 – Special Events/Field Marketing .................................................23-24

RECOMMENDATION 3 – QR Codes……………………………………………….... 25

RECOMMENDATION 4 – Buy Online Pick Up In Store…………………………….. 26

Conclusion……………………………………………………………………………… 27

Script

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Introduction of the Integration of Online and Offline Retail

“Did you buy that online?” has become a reasonably new term heard in everyday

conversations throughout the world. Over the course of the past few years, retailers are

increasingly integrating their offline channels and online channels to reduce costs or to

improve the value proposition they make to their customers. Some retailers operate

exclusively through online channels while traditional brick and mortar retailers have

incorporated online sales channels. Online channels have allowed consumers both the

freedom and comfort to shop from anywhere they choose. In today’s retail world,

consumers are no longer forced to travel to the physical storefront to get serviced by

these various companies. Taking that in to consideration, today’s retailers’ online

channels are no longer an experiment but a relevant and expanding part of their business.

Originally, the vast majority of brick and mortar retailers decided to separate the

operations of traditional and online channels. However due to the rapid rise in the use of

technology by the general population, the evolution and integration of online channels are

two actions that need to be taken by brick and mortar retailers in order to develop and

thrive.

In today’s world, there is an innumerable amount of people who own smart

phones. All of which, have the access to simply buy from a retail company’s online

channel with a tap on their smart phone. More retail spending has been moving to online

channels thus, creating less desire and need for brick and mortar offline storefronts.

Online channels of retail companies have led to the cannibalization of offline brick and

mortar storefronts; therefore, in order for brick and mortar storefronts to survive and

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prosper it is crucial for brick and mortar stores to adapt to this online channel mentality

and merge it to their physical storefronts.

The integration of a strong online retail channel along with a compelling offline

physical retail market can make retailers more successful as well as better the consumer

experience. Online-offline integration efforts and actions can occur in an assortment of

different ways. Nevertheless, in order for an online-offline integration to be effective and

efficient a company must be able to consolidate all four parts of the marketing mix. The

four parts of the marketing include product, promotion, price, and placement. The reason

all four parts of the marketing mix must be incorporated in the online-offline retail

integration is because these four aspects are the core of a retail company’s success, both

online and in-store. Taking that in to consideration, we genuinely feel that we have

successfully outlined a plan for a successful online-offline integration for our client.

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Analysis of the Integration of Online and Offline Retail

Online retailing continues to grow rapidly as time goes on. In light of this growth,

one of the challenges to researchers and marketers alike is determining the demand for

online vs. offline services for different classes of products and different types of

customers. The overarching question for this consumer domain is what drives a consumer

to shop online or offline for a given product. In todays over crowded and over

communicated market place it is difficult for retail stores to successfully find a spot

within the consumers mind. Therefore countless retailers have moved their products and

services to an online marketplace, also know as the e-marketplace. An e-marketplace site

is where multiple third parties provide product or service information, whereas the

marketplace operator processes sales transactions. Since 2012 the e-marketplace has

grown significantly and it is projected to keep on growing. Some forecasts predict that

the e-marketplace will close in on a 500 billion dollar worth by 2018. Taking that in to

consideration, it only makes sense for retail stores to have a solid online integration with

their overall business. However, these retailers must take into consideration that not every

consumer enjoys shopping online and that the brick and mortar aspect of their business

should be very detrimental to their growth. A survey conducted in 2012 exhibits that only

36% of females and a staggering low 6% of males do more online shopping than in store

shopping. Now these percentages may discourage some retailers to invest in only having

an online channel of their business, but research completed by Sendy Farag, Tim

Schwanen, Martin Dijst, and Jan Faber claims that a good online experience actually

increased in store visits. Ultimately, a good online experience of a retailer’s business will

directly connect with its brick and mortar stores, merging the two aspects of a retailer’s

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business in to one. However it is much easier said than done, in order to have an effective

and efficient online-offline integration, it requires more than just a good online channel.

A complete integration of online and in-store retailing requires a lot of work and

dedication. An effective and efficient online-offline integration would be the

establishment of a “Brick and Click” retailer. Brick and click is a business model by

which a company integrates both offline and online presences. In order to position your

company successfully as a “Brick and Click” store, you must advertise and brand your

business accordingly so. The execution of the implementation of the online-offline

integration is key. One example of a bad execution was in 2012 when JC Penny tried to

integrate by replacing their clerks with automated self-checkout machines and failed.

Taking that in to account, we make sure we not only learn from our own mistakes but

from the mistakes of others. An example of a good execution would be when Nordstrom

started to have their employees equipped with handheld devices to help customers

through the checkout process and help customers find items or order them. Our team is

well aware at the fact that online-offline integration has been going on for years.

Consequently, we have spent time and money analyzing technical and fundamental

criteria in regards to past “Brick and Click” implementations in order for us to create an

effective and efficient online-offline implementation for our client. Most consumers are

aware of the idea of a “Brick and Click” store; in fact 71% of consumers expect to be

able to view in-store inventory online, and 50% of consumers expect to be able to buy

online and pick up in-store. However, roughly only a third of consumers utilize these

tactics by retailers. This visualizes to our team that our recommendations for our client

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must not only be a successful integration but also educate consumers more on all of our

recommendation’s specifics and details.

Our recommendation of a successful integration is not solely dependent on

technology; it also extends to the sales personal. In a study conducted by Forrester

Consulting, 69% of consumers expect sales associates to be equipped with some type of

mobile device to be able to access information (See Figure 1). The employees of the

business play a bigger role than just assisting customers. In order to maintain a great

online channel that is efficient and easy to navigate, it requires both employees and

consumers to be constantly monitoring it. With that, in order to have a strong online

presence we must involve our client with social media. A good social media presence is a

vital part in having a successful online-offline integration. An innumerable amount of

consumers in the world today are a part of some social media platform such as Facebook,

Twitter, and so on. There are a wide variety of benefits in social media advertising. Some

of the benefits include increased brand recognition, improved brand loyalty, lower

expenses, and many more opportunities. One of the most important things social media

affiliation does for a business is build a relationship with the consumer, which allows

them to find items, rate them, and network with other consumers (See Figure 2).

Lastly, our team feels as if the consumer is the most important factor in making

sure our recommendation integration goes smoothly. In all aspects of retail, the consumer

always comes first. A successful consumer relationship can be established through an

online channel with the offline channel through tracking consumers’ recent purchases and

matching consumers’ preferences on both channels. A consumer relationship is so

important because it influences purchase decisions especially in an overcrowded

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marketplace. For example, a recent survey conducted exhibits that consumers claim that

if there was free or expedited shipping they would choose that product over similar ones

(See figure 3). By building a strong consumer relationship via online promotions and in-

store helpfulness, it assists in boosting general awareness as well cements a successful

online-offline integration of a retailer.

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Figure 1: Shows 69% of consumers expect the sales associate to have a mobile device

and half of them expect they are able to look up product information on said mobile

device

Figure 2: Shows that 75% of shoppers will choose a product with free expedited shipping

over identical priced substitute items

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Figure 3: Shows the different ways retailers can interact with consumers through social

networks.

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The Evolution of Beef Jerky

Whether one is going on a long road trip or just stopping into a local market the

option to buy jerky may occur. One may go up and down the aisles and look for

something that can be easily packaged away. Generally jerky is associated with long trips

because of its ability to be preserved longer than other items. Even if jerky is not always

the first choice to buy some may wonder how that package of dried meat came to be.

The word “jerky” originated from the Spanish word “charqui” which translates to

burn meat. When the Spanish first explored the New World they discovered natives in the

Caribbean. The natives would cook their meat longer than normal and keep it hung high

over a low flame. The process of slow cooking the meat was essential for taking out all

the moisture allowing it to be preserved for longer periods of time. It wasn’t long until

“charqui” or jerky became the new staple food for sailors and eventually pirates since it

was able to travel with them wherever they went.

Over time many cultures have created their own variation of jerky. Some choose

to use different meat other than the traditional buffalo while also changing the overall

drying process. For example to the Native Americans the jerky was known as

“pemmican” instead of “charqui.” They would first ground up the meat then mix it with

berries and herbs before beginning the slow cooking and salting process. When drying

the meat it was essential that it be protected from animals that would eat the meat without

hesitation. To avoid the possibility the meat would be hung at least 25 feet in the trees to

avoid any sort of disturbance. With each culture the type of herbs used would vary but

generally the drying process was uniform throughout.

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Today with over a hundred different flavors of jerky to choose from it is hard to

imagine what the most popular was in the beginning. Many believe the first type of jerky

was beef but it was actually buffalo. Originally the process of creating beef jerky was a

lot more complicated than what it is today. First the buffalo meat was hunted, prepared,

hand sliced into long stripes and massaged with salt. Then the meat was furled inside the

animals hide and dried under the sun. While under the sun it was laid over rocks, leather

sheets and trays to dehydrate al the moisture from within. The process of drying out the

meat completely took at least two to three days depending on the weather conditions.

Sometimes in order to speed up the drying process the meat would be smoked to finalize

the cooking & drying altogether.

In todays society the drying and cooking process is less complicated but there is

still many requirements to ensure it is cooked properly. When made in a factory like

setting the meat must be prepared with strict temperatures and humidity to ensure that all

pathogens and bacteria are eliminated Generally jerky is made from whole slices of meat

making the process very expensive due to the labor-intensive nature of slicing and laying

out the meat. But to avoid the high costs slicing is very rarely used. The meat is first put

into an emulsifying blending together with dry ingredients and water. The resulting mass

then passes through an extruder forming the meat into strips. Finally the strips are

smoked and or dried to a specific level in order to maintain its reputation of a long shelf

life.

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Evolution of Ordering Food Online with Its Technology

More than one billion dollars was invested in 2014 in ordering food online. Ordering

food online has become one of the most competitive sectors within the food industry, but

it still accounts for roughly one percent of the food industry. This is why it is so attractive

to start-ups and food companies. There is a lot of potential that is coming from the

takeout and delivery market. There are now companies that take away the hassle of

grocery shopping with companies such as: Instacart, Hellofresh, JustEat, Deliveroo. The

reasoning behind this is people will have more time to focus on more important and

productive activities. Originally, online ordering was seen as only an operational tool,

but as consumers liked the convenience it posed, this has scaled.

** The twenty-first century has made keeping an online presence integral to a company's foundation.

** There are three main types of meal delivery services. These are software-only marketplaces, on demand marketplaces, and online fast food.

1. Software-only marketplaces focused on bringing together a collection of independent

restaurants and companies through easily used and managed software platform. These

marketplaces make money based on processing fees on

Pros: Highly scalable, easy to manage.

Cons: Not involved in food delivery speed and quality control.

2. Demand marketplaces focus on all aspects except the cooking of the food. They help

bring in customers, but also manage the delivery involved in delivering the food to the

consumers.

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Pros: Strong barriers to entry and scale, higher commissions

Cons: Couriers hiring and training, equipment maintenance, shift planning, not easy to scale, tough to compete

3. Meal delivery startups try to incorporate all three aspects of the food making chain in

order to fully control it. These companies develop their own apps in which consumers

control their food and have it delivered.

Pros: Best overall value for money, more options, reliable delivery.

Cons: There are many things that have helped to grow this industry sector. Social media has played a huge role in spreading word of mouth and making it easier and convenient to reach customers.

Lastly, look for more restaurateurs to steer all of their takeout and delivery customers

towards online ordering. Many owners now don't even want to take phone orders and are

asking their customers instead to go online. There are many motives for this. One is

operations -- it's a much easier way for restaurants to receive order information. More

importantly, though, it's for revenue and marketing purposes.

** The most challenging part of this marketplace is the demand side: will restaraunts want to integrate into other services.

As shown in this diagram, from 2012-2016, online ordering has increased 27%, as offline ordering has decreased 17%. If this continues to follow, by 2024, the use of online ordering will jump to around 65%.

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Timeline

** In 2010, NetWaiter integrated Facebook into the ordering process. When a customer orders online from a restaurant using NetWaiter, they can click a Facebook icon to quickly login and complete their order. ** 2014-present- mobile ordering: Companies expect large numbers of orders through mobile use. Companies now prefer online ordering. It makes receiving orders much easier and helps create databases of consumers that may return and expand the presence of said company.

** Humans are all about convenience, and the growing presence of food delivery companies will expand and continue to take a greater hold over the food preparation industry.

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** Successful IPOS that have revolutionized the way customers order food and interact with restaurants:Just Eat, Seamless, Grubhub

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Beef Jerky Facts and Statistics

Beef Jerky is becoming increasingly more preferred by consumers as one of the

leading meat snacks offered. In the last five years demand has risen by 61 percent. This

large increase of demand has been said to be a result of re-branding beef jerky as a

‘health food.’ This accessibility has allowed for more consumers to participate in the

market influencing numerous companies to enter the snack business and cater to the

demographic. As a result, sales have soared by 13% since 2013 and more broadly, 46%

since 2009 earning the market a nearly $1.5 billion industry. Jack Link’s, the largest and

most known beef jerky maker in the United States have annual sales of nearly $1 Billion.

It is because of this that distinguished corporations such as Hershey tapped into the

market in 2015, purchasing Krave –an “upscale meat snack maker (Ferdman, Roberto)

for $300 million. This acquisition will allow for consumers whom are not already

familiar with this snack market to become more acquainted with it given the notoriety of

Hershey’s. The ever-increasing pressure brands such as Hershey and Jack Link’s have

put on another has opened up online distribution channels such being Costco, Amazon,

and even e-bay.

The core demographic of consumers who buy beef jerky remains primarily men,

ages 18 to 30 years old. However, in efforts to expand their market and attract a more

diverse set of consumers, beef jerky makers are penetrating different flavors of the meat

snack in hopes to become mainstream. They have heavily relied on statistics as to who is

consuming beef jerky, what flavors are preferred, and if the brand of beef jerky plays a

role in the amount of consumption to gage more of an idea for the existing market.

Producers have come to the realization that the current demographic are not the only

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group looking to increase their protein intake. Most efficient and common diets revolve

around high-quality proteins and beef jerky is the go-to option to increase their intake

regardless of gender.

CONSUMPTION of meat snacks and beef jerky in the U.S. 2015 The sample is representative for all American households.Survey conducted from February 4, 2014 to March 11, 2015 Sample included approximately *28,869 American adults *12,489 Males *16,380 Females

** The image of above tells us that it’s almost an equal consumption of those who do eat beef jerky and those who do not. According to the 2015 survey, 42.22% of household said ‘yes’ they do eat beef jerky compared to 56.81% who said no. This graph is valuable because it allows us to see the bigger picture of consumption. By knowing the

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approximate percentage of consumers in households that are buying beef jerky, one can better determine the market size and implement strategic marketing strategies to dissolve the population who have answered no. Such strategies include placing the beef jerky section next to candy, gum and magazines nearby the checkout section, which has proven to increase sales dramatically.

Different types of BRANDS of beef jerky: The sample is representative for all American households.Survey conducted from February 4, 2014 to March 11, 2015 Sample included approximately *28,869 American adults

*12,489 Males*16,380 Females

** The image above reflects Slim Jim of 16.42% being the most east brand of beef jerky households. With Jack Link’s rating number to with 16.25% and in third place all ‘other’ brands with 8.6 percent. The least common brand of beef jerky eaten in households is Wild Ride with less than one percent, 0.83%. The amount of companies whom enter the market will continue to increase being that the snacks business is now worth $120 billion and beef jerky continues to drive that estimation higher with the introduction of untraditional flavors such as teriyaki. According to Fortune magazine, beef jerky can possibly become the new cupcakes only encouraging current investors in the market

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place to perfect their strategies and business plan to make up a predominant part of the industry.

Different types of FLAVORS of beef jerky: The sample is representative for all American households.Survey conducted from February 4, 2014 to March 11, 2015 Sample included approximately *28,869 American adults *12,489 Males*16,380 Females

** According to this data, reflected statistics says that most households, 23.15% prefer to eat Regular flavored beef jerky. This is bar far the most leading flavor, as the number two preferred flavor, 12.19% of households prefer Teriyaki flavored. Dropping almost by 50 percent, the third preferred flavor, 7.33% of households choose to eat Peppered beef jerky. The least chosen flavors by households are Barbeque with 5.13% and 1.77% deemed ‘Other.’ It is critical that companies remain strategic in the number of flavors they release being that they are expanding their business to other age groups and demographics.

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Recommendation #1 – Display of Inventory

Consumers all around the world have become more and more accustomed to an

entirely new way to shop and only gets better and easier as the decades swing by and

technology improves. Mobile and online shopping has had dramatic impacts on in-store

shopping and brick-and-mortar companies. People can now browse the internet and with

just a click, their items will be packed and shipped to their house without moving an inch

out the door.

According to a Forrester estimate report by CNBC in June this year, grocery only

accounts for 2.2 percent of online stores. The rest mostly comprises of clothing and

electronics. Most people prefer to buy produce in person to make sure that it is fresh.

People can order meals through apps like seamless where they can either pick up or have

meals delivered to their door. Most restaurants participate in this new endeavor. Soon

enough there will even be “smart refrigerators” that can order your food for you by

analyzing your food intake and amount stored in the fridge.

Data is what profitable multi-channel strategies revolve around because data is used to

inform decision makers for promotions, pricing, product selection and more. Grocery

stores need rich sources of real-time data. Real-time data from online shopping will help

decision makers address unexpected shoppers pick what they like.

When companies display their in-store inventory online, they increase the

possible purchasing choices for customers. People love options so they even created

mobile apps for the shopping experience on the go. The good news is that if one store

doesn’t have the item you are looking for, chances are, a different store does, so by

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ordering from the website, you have a greater chance of finding what you want and you

never have to be disappointed by walking into a store and not finding what you like.

Stores that provide different channels of advertisement are said to gain positive

customer perception of the brand. The online shopping experience can really mold the

perception of a business through the eyes of a customer.

By increasing the number of ways to purchase, increases not only the convenience

and ease of sales but also profit for the company. Gathering data through customers is

used for the success of retailing and online meeting points.

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Recommendation #2 – Special Events/Field Marketing

Even though people may spend most of their time shopping online, interacting

with people in the physical world is the best part of shopping and the business

experience. To understand this concept better, we must first understand, what is field

marketing?

Field marketing involves working on an event or site to connect with people,

buyers and markets alike. It comprises of face-to-face interaction. Some companies may

coordinate large sales teams who meet with customers face-to-face at events while others

may simply work as street promoters handing out flyers.

The use of field marketing is vast, but mostly for the purpose of promoting a

specific product or service or promoting a particular brand. Extensive field marketing can

be taken advantage of by companies such as the following:

Food, beverage and tobacco

Health and beauty products

Pharmaceuticals

Home goods, appliances, and cleaning products

Grocers, convenience stores, and department stores

Sellers of mobile devices and telecommunications providers

The most targeted customers are those who are physically in the market place.

Point-of-sale campaigns are used to get those impulsive buyers. Professionals doing the

field work also look for the customers that they call “shapers”. The shapers are those

positive customers that share their positive experience with others, and are the ones to tell

their friends about the product or service.

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A risk of field marketing is that relying on face-to-face communication lies in the

hands of a limited amount of people as oppose to broadcasting their product, service or

brand through television. This is why those field marketers must be able to communicate

effectively and persuasively and be able to gauge the level of interest of the customer.

To deliver the message, field-marketing campaigns will use these tactics:

Product sampling and demonstrations

In-store promotions

Street promotions

Merchandising

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Recommendation #3 – QR Codes

QR Codes have been so affective in so many areas; they help with advertising and

marketing. They can be seen in airports, buses and subways. The QR technology can

easily be scanned and directed to the website within the code. Studies have showed that

50% of shopper and consumers use their phone during shopping experiences. This data

shows that having QR codes on your mobile device can be so much more effective during

a customers shopping experience.

Mobile applications are one of the most important things to add to one’s company

because of its growing popularity. Mobile apps are becoming the most popular form of

digital interaction. Today’s world is always on the move and using mobile application

platforms to get to a restaurant or store. Also, whether they use mobile phones, tablets,

Smartphone, they have all the information they require and that’s why mobile apps are

extremely essential in today’s.

When people go out and purchase smart phones, more people will have access to

app store application, such as the app store, Google play store and amazons apps. The

application have unlimited growth possibilities because of its many abilities. Mobile

applications/QR codes can give users a closer experience to your company more than any

web page or in store visit because of how easily and frequent they can be used. It may

seem like a big investment in a company to develop this opportunity, mobile applications

aren’t costly to develop and they will be able to provide the same experience webpages

bring and more. As long as proper new tools are added along with it, the application/QR

Codes will be able to succeed.

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Recommendation #4 – Buy Online Pickup In Store

Many people around the globe don’t really love to shop. Some people are forced

to shop because of certain circumstances, such as weigh gain or weigh loss. People who

don’t like to shop, don’t want to walk around a store looking for clothes, they want to be

able to reserve it online and try it on and get out of the store. According to surveys 83%

of US customer’s reserved clothes or items during the busiest shopping time during the

year, Christmas.

A survey was conducted and they found that 78% found the option to shop online

for in-store pickup appealing, and most people had already bought like this for the year.

Women had a higher percent than man when deciding on if buying online and picking up

in store would be something that would help everyday consumers.

Electronics were the most popular goods that consumers were willing to purchase

by buying online and picking up in store. Surveys have shown that 80% of consumers

rather buy that way instead of going to the store and looking for an electronic device.

Housewares and apparel ranked second and third, each with 10%.

According to Emarketer online consumers have loved the idea of retailers buy

online, pick up in-store services, because they merge the best of digital retail and in-store

shopping. The Retailers benefit drastically, both in terms of profit and customer service.

Buying online and picking up in store is getting so popular with consumers, that retailers

have been slow to accept the in-store pickup, but over time this will change. Some stores

are looking for a way to have a pick up spot, so you don’t even have to get out of your

car.

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Conclusion

In order to transition from brick and mortar to bricks and clicks, we recommend a

series of tactics that will help a physical store adapt to the rapidly growing E-market

place. Simplifying the customers shopping experience is key for brick and mortar stores

to adapt and compete with the E-market place. The idea of a single return policy for both

the physical and online store will enhance the consumer’s experience as well as

simplifying it. Another way to compete with the simple life of shopping online is to make

the physical stores as organized as the online stores are. The customers’ in store

experience will benefit from the organization; therefore, the likely hood of their return to

the physical store increases.

The main way that a physical store can simplify the shopping experience for

customers is by integrating online tactics in order to increase the success of both the

physical and online store. By displaying the in store inventory on the store’s website, a

customer that usually shops online will be influenced to visit the physical store. This will

be creating traffic both physically and virtually. Another way to use online tactics to

improve a customer’s in store experience is to utilize mobile applications. These mobile

applications can help the physical store make the customer’s experience more personal.

The applications, however, also allows the consumer to shop anywhere and at anytime.

This feature eliminates the boundaries of the physical store. By integrating these

marketing tactics, a retail store will be able to sell more goods in both channels (website

and brick and mortar).

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