PPT 3-1

Types of General Merchandise Retailers

Department Stores

Full Line Discount store

Drug stores

Category Specialists

Off-Price Retailers

PPT 3-2McGraw-Hill/IrwinLevy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 3Chapter 3

Multi-Channel Multi-Channel RetailingRetailing

PPT 3-3

The Multi-Channel Retailer

Retailer

PPT 3-4

Customer

Today’s empowered consumers live in a multi-channel world -- Research products online, buy offline, and demand service everywhere

Web & Email • 24x7 • Visual

Call Center • Convenient • Immediate

Catalog retailing

Brick & Mortar • Touch/Feel • Experience driven

Consumers buy what they want, when they want, wherever they want

PPT 3-5

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

PPT 3-6

Unique Benefits Provided by Store Channel

• Browsing• Touch and feel products• Personal service• Cash payment • Immediate gratification• Entertainment and social

interaction

PPT 3-7

Benefits Provided by Catalog Channel

Convenience easily accessible

Visual presentation

PPT 3-8

Unique Benefits Provided by Internet Channel

• Convenience• Safety• Broad selection• Detailed information• Personalization• Problem-solving

information

PPT 3-9

Internet Users Across the Globe

PPT 3-10

Illustration - Radha- Part 1

Radha sits in front of her home electronic center reviewing her engagement calendar displayed on her TV screen. She sees that she has accepted an invitation to a formal cocktail party on Friday night and decides to buy a new dress for the occasion. She switches to her personal electronic shopper, SOHA, and initiates the following exchange:

SOHA: Do you wish to browse, go to a specific store, or buy a specific item?

Radha: Specific item.

SOHA: Type of item?

Radha: Black dress.

SOHA: Occasion? (menu appears on screen)

Radha: Formal cocktail party

PPT 3-11

Illustration – Radha - Part 2

SOHA: Price range? (menu appears)

Radha: Rs. 300 Rs. 500

SOHA: 497 items have been identified. How many do you want to review?

Radha: 5

Five pictures of Radha in each dress appear on the screen with the price, brand name, and the IHS retailer selling it listed beneath each one. Radha clicks on one of the dresses and it is enlarged on the screen. Another click and Radha views the dress from different angles. Another click and specifications such as fabric and laundering instructions appear. Radha repeats this routine with each dress. She selects the one she finds most appealing. SOHA knows her measurements and picks the size that fits her best.

PPT 3-12

Illustration - Radha Jamison - Part 3

SOHA: How would you like to pay for this? (menu appears)

Radha: American Express

SOHA: Nieman Marcus [the firm selling the dress Radha selected] suggests a Xie scarf and Koslow belt to compliment the

dress.

[Radha clicks on the items and they appear on the screen. Radha inspects these items as she inspected the dresses. She decides to purchase both accessories. SOHA then asks Radha about delivery. Radha selects two day delivery at a cost of $5.00]

SOHA: Just a reminder. You have not purchased hosiery in 30 days. Do you wish to reorder at this time?

Radha: Yes

SOHA: Same shades?

Radha: Yes

PPT 3-13

Why Do People Patronize a Retailer?

Merchandise Assortments

ServiceConvenience

Information to make good selections

Price - Total cost to customerGo to store, find right merchandise, return

merchandise

Entertainment

Social interaction

PPT 3-14

Benefits of Electronic Channel

Increased AssortmentMore Information to Evaluate Merchandise

Drill Down as Much as You Want

Full motion Video

Personalization

Information for Solving Problems, Not Just Merchandise Characteristics

PPT 3-15

Virtual Communities

Virtual community is a network of members sharing common interests that interact with each other electronically.

Examples:IVillage - Women

Garden.Com - Gardeners

PPT 3-16

Value Proposition for Members

Meaningful personal relationships -- Opportunity to interaction with other people with common interests draws people to community.

Entertainment

Access to competing vendors and publishers

PPT 3-17

Who Is Best Suited to Organize a Virtual Community?

Concerned Consumers

Suppliers

Retailers

PPT 3-18

What Merchandise Will Be Sold Successfully Over the Internet

“Look and See” attributes vs. “Touch and Feel” attributes (?)

Degree to which information can be used to predict satisfaction prior to purchase

Gifts

Services

Might not need to “Touch and Feel”

PPT 3-19

Reasons for Becoming a Multi-Channel Retailer

-Increase Share of Wallet

-Overcome Limitations of Existing Format

-Expand Market

-Brand Name, Inventory, Customer Database

-Develop Insights in Customer Shopping Behavior

PPT 3-20

Issues Confronting a Multi-Channel Retailer

Maintaining Brand Image Across Channels

Merchandise Assortment Offered in Each Channel

Pricing Across Channels

PPT 3-21

Customers Want to Recognized No Matter What Channel they Use

Catalog

Internet

Call Center

CustomerRelationshipBrick & Mortar

Customers

PPT 3-22

Integration – Key to Multi-Channel Retailing

•Create a Seamless •Experience

•Make it Easy •Provide Support

•Know thy •Customer

••• Ordering ••• Returns••• Refunds

••r•••Shopping

•Advice•••Customer

•Service

•••Needs and•preferences

•••One to One•Marketing

•••consistent service•regardless•of channel

PPT 3-23

Source: Progressive Grocer, 01 Feb 00; Grocery Headquarters, 01 Feb 00.

Consumer does not find desired item in the store.

Consumer goes to Catalog to search for product

Catalog links to chain’s web-site allowing consumers to find and purchase item

Consumer places order online for home delivery or store pick-up at a later time

Illustration of Multi-Channel Integration