1. Web, Nonstore-Based, and Other Forms of Nontraditional Retailing
Chapter 6
Web, Nonstore-Based, and Other Forms of Nontraditional Retailing
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
9th Edition
BERMAN EVANS

2. Chapter Objectives
To contrast single-channel and multi-channel retailing
To look at the characteristics of the three major retail institutions involved with nonstore-based strategy mixes: direct marketing, direct selling, and vending machines – with an emphasis on direct marketing

3. Chapter Objectives_2
To explore the emergence of electronic retailing through the World Wide Web
To discuss two other nontraditional forms of retailing: video kiosks and airport retailing

4. Figure 6.1 Approaches to Retailing Channels

5. Figure 6.2 Home Depot

6. Nonstore Retailing Retailing strategy that is not store-based
It exceeds $300 billion annually
78% comes from direct marketing
Web-based retailing is fastest growing area

7. Nontraditional Retailing
Nontraditional retailing also includes formats that do not fit into the store and non-store based categories:
Video kiosks
Airport retailing

8. Direct Marketing
Customer is first exposed to a good or service through a nonpersonal medium and then orders by mail, phone, fax, or computer
Annual U.S. sales exceed $235 billion
Other leading countries include
Japan
Germany
Great Britain
France
Italy

9. Characteristics of Direct Marketing Customers
Married
Upper middle class
36-50 years old
Desires convenience, unique merchandise, good prices

10. Direct Marketing Categories
GENERAL
offer full lines of products from clothing to housewares
J.C. Penney
QVC
SPECIALTY
offer narrow product lines
L.L. Bean
Franklin Mint

11. Figure 6.3 Micro Warehouse

12. Strategic Business Advantages of Direct Marketing
Reduced costs
Lower prices
Large geographic coverage
Convenient to customers
Ability to pinpoint customer segments
Ability to eliminate sales tax for some
Ability to supplement regular business without additional outlets

13. Strategic Business Limitations of Direct Marketing
Products cannot be examined prior to purchase
Costs may be underestimated
Response rates to catalogs under 10%
Clutter exists
Long lead time required
Industry reputation sometimes negative

14. Database Retailing
Collection, storage, and usage of relevant customer information
name
address
background
shopping interests
purchase behavior
Observation of rule

15. Emerging Trends Evolving activities Changing customer lifestyles
Increasing competition
Increasing usage of dual distribution channels
Changing media roles, technological advances, and global penetration

16. Selection Factors Company reputation and image
Ability to shop whenever consumer wants
Types of goods and services
Availability of toll-free phone number or Web site for ordering
Credit card acceptance
Speed of promised delivery time
Competitive prices
Satisfaction with past purchases and good return policy

17. TV Retailing

18. Figure 6.4 Executing a Direct Marketing Strategy

19. Media Selection Printed catalogs Direct-mail ads and brochures
Inserts with monthly credit card and other bills (statement stuffers)
Freestanding displays
Ads or programs in mass media
Banner ads or hot links on the Web
Video kiosks

20. Outcome Measures Overall Response Rate Average Purchase Amount
Sales Volume by Product Category
Value of list brokers

21. Table 6.1 Snapshot of U.S. Direct Selling Industry

22. Table 6.1 Snapshot of U.S. Direct Selling Industry

23. Figure 6.5 Direct Selling and Mary Kay

24. The Role of the Web Project a retail presence Enhance image
Generate sales
Reach geographically-dispersed customers
Provide information to customers
Promote new products
Demonstrate new product benefits

25. The Role of the Web_2 Provide customer service (e.g., e-mail)
Be more “personal” with consumers
Conduct a retail business efficiently
Obtain customer feedback
Promote special offers
Describe employment opportunities
Present information to potential investors, franchisees, and the media

26. Figure 6.6 Web-Based U.S. Retail Sales

27. Figure 6.8 Five Stages of Developing a 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

28. Figure 6.9 A Checklist of Retailer Decisions in Utilizing the Web

29. Reasons Using the Web information entertainment
interactive communications
Shopping Online
selection
prices
convenience
fun

30. Reasons NOT to Shop Online
Trust
Fear
Lack of security
Lack of personal communication

31. Recommendations for Web Retailers
Develop or exploit a well-known, trustworthy retailer name
Tailor the product assortment for Web shoppers
Enable the shopper to click as little as possible
Provide a solid search engine
Use customer information

32. Figure 6.12 Borders’ Title Sleuth Video Kiosk

33. Features of Airport Retailing
Large group of prospective shoppers
Captive audience
Strong sales per square foot of retail space
Strong sales of gift and travel items
Difficulty in replenishment
Longer operating hours
Duty-free shopping possible

34. Figure 6.13 Airport Retailing and Waldenbooks