things to do midterm details thursday, feb. 16 th, during regular class time (2:15 and 3:45) schw...
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Things to do Midterm details
Thursday, Feb. 16th , during regular class time (2:15 and 3:45) SCHW AUDITORIUM Scenario based discussion questions
Finish Chapter 5 concepts Wheel of retailing, retail life cycle, scrambled merchandising
Retail Institutions Assignment questions Begin chapter 6 discussion of non-traditional retail Distribute case for Tuesday’s class
Chapter 66Non-traditional Retailing
RETAIL MANAGEMENT:
A STRATEGICAPPROACH,
Nontraditional Retailing Non-store:
Direct Marketing: Internet Catalogue – examples? TV (shopping networks, infomercials)
Direct Selling (phone, in-person)
Other (blurred store/non-store distinctions):
Video Kiosks Vending Machines Airport Retailing
Emerging Trends
Changing customer lifestyles Increasing competition Mounting interest in global direct marketing Technological advances Greater use of multi-channel retailing…
Perhaps even “channel obliteration”? For bricks-and-mortar stores? For catalogues?
Multi-channel Retailing Uses more than one channel Studies have shown multi-channel shoppers
spend more (Sears, Canada Post) and are more loyal (Berman and Thelen 2004)
Channels synergistic (JC Williams) Increased customer base, increased
revenue, increased market share (Berman and Thelen 2004)
26% online Canadians make their online purchases from the same stores they shop offline (AC Nielsen 2010)
Different consumer benefits are derived from each channel
Successful multi-channel strategies are integrated Achieve integration:
Protect (initiated for competitive parity) Evolve (become more customer centric) Transform (customer preferences
integrated throughout value chain)
Internet$1
Retail$3
Catalogue$1
$ 5 $ 3
$ 5
$ 7
Name some multi-channel retailers.Do you shop all channels?What benefits do you get from each channel?
Name some multi-channel retailers.Do you shop all channels?What benefits do you get from each channel?
From anywhere… to anyone
It’s really all about maximizing the buying experience
In-depth information
Resource
Personalized
Dynamic
Efficiency/Convenience
Accessible
Tactile interaction
Instant gratification
Human interaction
Service
Destination
Entertainment
Information
Longevity
Tangibility
Portability
Service
Retail ExperienceCatalogue Experience
Online Experience
Consumers look for different experiences in the different channels
Source: J.C. Williams Group
Airport Retailing Vancouver International Airport Hong Kong International Airport
“Airport Authority with the Most Supportive Approach to Travel-Retail” at the DFNI Asian Awards for Travel-Retail Excellence
Airport retailing is becoming increasingly significant Reduced in-air services Increased waiting times Captive audience
Impulse purchase behaviour Reduced price sensitivity
Extended hours Potential difficulties include:
Higher rent Receipt of inventory (inconvenient) Inventory storage
Vending Machines•Formerly dominated by tobacco
•Dominated by food in Canada
•94% of $720 million in revenue
•Lean Machine 2005
•April Glavine, Saint Mary’s MBA
•Urban Vendor
•What items would you consider purchasing from a vending machine?
•New Trends:
•Hot food
•Durables (clothing, souvenirs)
•iPods??
Web Retailing Have you made a purchase online?
76% Canada’s internet users have shopped online Compared with 98% in South Korea and 97% in Japan,
Germany and Great Britain And 94% in the US
What have you purchased and why? Most frequent online purchases in Canada (Dec 2009)
Books DVDs Clothing/shoes Electronics Airline tickets
Resources: Stats Can data; AC Nielsen Report
Reasons Customers Buy Online Convenience Control Choice Communication Customization (My Publisher, American
Eagle, Future Shop, youbobble.ca) Cost*
Reasons Retailers Use Web
Competitive necessity Generate sales Enhance image Reach geographically-dispersed customers Provide information to customers Promotion - new products, special offers Provide customer service (e.g., e-mail, shopping assistants) Obtain customer feedback Employee recruitment Present information to potential investors, franchisees, and
the media
Figure 6.8 Five Stages of Developing Retail Web Presence
1. Brochure Web Site
2. Commerce Web Site
3. Integrated Web Site
4. The ‘Webified’ Store
5. Site Integrated with Manufacturer Systems
The State of Online RetailingOnline sales
Global Trends
Canada:•$3.3 billion in 2009*•0.79% retail sales (2009)*Electronic Shopping and mail-order houses
•Statistics Canada
United States:•5.7% retail sales from Jan-Oct 2010•7.4% retail sales from Nov-Dec 2010
•US Dept of Commerce
United Kingdom:•17% retail sales 2011
•IMRG Capgemini’s Retail Sales Index
Online salesGlobal Trends
Canada:•$3.3 billion in 2009*•0.79% retail sales (2009)*Electronic Shopping and mail-order houses
•Statistics Canada
United States:•5.7% retail sales from Jan-Oct 2010•7.4% retail sales from Nov-Dec 2010
•US Dept of Commerce
United Kingdom:•17% retail sales 2011
•IMRG Capgemini’s Retail Sales Index Global E-Commerce Report
Connected, but not buying…
40% of Canadian Internet users abandoned at least one virtual shopping cart on a Canadian site. WHY?
40% of Canadian Internet users abandoned at least one virtual shopping cart on a Canadian site. WHY?
•Canada most connected country in the world
•Canadians were the world leader in broadband adoptions
•But, online Canadians aren’t avid online purchasers relative to other countries
Reasons NOT Shopping Online1. Browsing
2. Shipping costs too high
3. Privacy
4. Inconvenience (had to register)
5. Poor site design
Fulfillment issues?? (eg. Red Envelope)
The Value of Multi-Channel Using the Internet is most successful when it is part of an integrated multi-
channel strategy.
Clicks-and-mortar retailers address the consumer's emerging preference to enjoy the same shopping experience and convenience in all channels (e.g., store, catalogue, Internet).
Internet retailing may not result in channel obliteration as once expected, but many retailers are planning substantial growth from this area.
http://www.businessweek.com/news/2010-10-26/u-k-retailers-boosting-online-offering-deloitte-s-geddes-says.html
Two challenges are: converting browsers to shoppers regardless of the channel they choose. repatriating the 45% of Canadian online shoppers who are buying from foreign sites.
Retail Interactive (http://retailinteractive.ca/SSG/ri00913e.html)
BlueNile.com
BlueNile.com Questions1. Discuss the consumer behaviour of a
traditional diamond engagement ring purchase. How does it compare to a BlueNile.com purchase?
2. Is channel obliteration – the destruction of traditional distribution channels – likely in jewelry retail? Why or why not?
3. What have been BlueNile’s KSFs to date?