1. Outlet Selection and Purchase17
CHAPTER
Outlet Selection and Purchase
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. PART IV: CONSUMER DECISION PROCESS
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3. Learning Objectives L01 L02 L03 L04 L05
Describe how retailing is evolving
Discuss the Internet and mobile as part of multi- and omni-channel shopping
Explain the retail and consumer attributes that affect outlet selection
Summarize the in-store and online influences on brand choice
Understand how purchase plays a role in the shopping process
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4. Consumer Behavior In The News…
What Are the Top 5 Factors Driving Consumer Interest in an Apparel Retailer?
Source: D. Warmath, “Get in the Game or Lose,” Advertising Age, August 25, 2008, p. 15.
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5. Consumer Behavior In The News…
Top 5 Factors in Apparel Retailing.
1. Latest Trends
2. High-Quality Products
3. Brand Names I want
4. Broad Selection
5. Full Range of Services
NOTE: Factors vary by category. Number 1 factor in home products is broad selection.
Source: D. Warmath, “Get in the Game or Lose,” Advertising Age, August 25, 2008, p. 15.
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6. The Evolving Retail Scene
Internet Retailing
Characteristics of Online Shoppers
Barriers to Internet Shopping
Store-based Retailing
The Internet as Part of a Multi-Channel Strategy
Mobile as Part of an Omni-Channel Strategy
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7. Video Application
The following Video Clip demonstrates how M&Ms gets personal with its multichannel strategy!
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9. The Evolving Retail Scene
Internet Retailing
Internet retailing continues to evolve and grow as a strong retail channel:
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10. The Evolving Retail Scene
Consumers shop online for reasons similar to those for shopping from catalogs:
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11. The Evolving Retail Scene
Characteristics of Online Shoppers
Six shopping segments identified by Experian:
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12. The Evolving Retail Scene
Barriers to Internet Shopping
A recent study found the following reasons among those who are online who have never made a purchase:
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13. The Evolving Retail Scene
Store-based Retailing
The following are the results of a Roper survey asking consumers why they don’t like shopping in stores:
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14. The Evolving Retail Scene
Store-based Retailing
In-store shopping is perceived as neither fun nor efficient by many. Retailers are trying to enhance the experiential component through layout, music, personal shoppers, etc.
Brand stores add value by providing a fun shopping environment
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15. Applications in Consumer Behavior
Store-based Retailing
This Walmart ad shows one of the many ways store-based retailers add value for their customers – namely providing a fun shopping environment.
Courtesy Walmart Stores, Inc.
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16. The Evolving Retail Scene
The Internet as Part of a Multi-Channel Strategy
Most retailers utilize multiple retail channels, such as physical stores, Internet, catalogs, etc.
This approach can take many forms and can be successful for a number of reasons, such as a regional in-store retail utilizing online to become national/international in scope.
Multi-channel shoppers are consumers who browse and/or purchase in more than one channel.
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17. The Evolving Retail Scene
Multi-Channel Shoppers Browse in One Channel and Purchase in Another
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18. The Evolving Retail Scene
Mobile as Part of an Omni-Channel Strategy
Omni-channel shoppers are consumers who browse and/or purchase in more than one channel simultaneously. They are
Digital savvy, with heavy reliance on mobile shopping apps.
Younger Gen Yers, upscale and tech savvy Gen X and older Gen Y
Spend 15%-30% more with a retailer than multi-channel shoppers!
IDC Retail Insights discusses the importance of the emerging omni-channel shopper
YouTube Spotlight
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19. The Evolving Retail Scene
Mobile as Part of an Omni-Channel Strategy
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20. Attributes Affecting Retail Outlet Selection
Retail outlet selection involves a comparison of the alternative outlets on consumer’s evaluative criteria:
Outlet Image
Retailer Brands
Retail Advertising
Outlet Location and Size
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21. Attributes Affecting Retail Outlet Selection
Outlet Image
Bricks-and-Mortar Image
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22. Attributes Affecting Retail Outlet Selection
Outlet Image
Online Image
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23. Attributes Affecting Retail Outlet Selection
Retailer Brands
Store brands are closely related to store image, and at the extreme, the store or outlet is the brand.
Traditionally, retailers carried only manufacturers' brands, and only a few, such as Sears and Wards, developed their own brands.
Increasingly retailers such as Walmart and Target are developing and promoting high-quality brands with either the store’s name or an independent name.
The key to success of store brands--high quality at a reasonable price.
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24. Attributes Affecting Retail Outlet Selection
Retail Advertising
Expenditure of Individuals Drawn to a Store by an Advertised Item
Source: The Double Dividend. (New York: Newspaper Advertising Bureau Inc., February 1977.
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25. Attributes Affecting Retail Outlet Selection
Outlet Location and Size
Location and size play an important role in store choice.
All else equal, consumers generally select the closest store.
Outlet size is also important. Generally, customers prefer larger outlets over smaller outlets.
The retail attraction model, or the retail gravitation model, is used to calculate the level of store attraction based on store size and distance from the consumer.
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26. Consumer Characteristics and Outlet Choice
Perceived Risk
Shopping Orientation
Two consumer characteristics that are particularly relevant to store choice:
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27. Consumer Characteristics and Outlet Choice
Shopping Orientation Segments
Apathetic Shoppers
16%
Enthusiastic Shoppers 22%
Destination shoppers 21%
Basic Shoppers 22%
Bargain Seekers 20%
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28. In-Store and Online Influences on Brand Choices
Supermarket Decisions: Two-Thirds Are Made In-Store
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29. In-Store and Online Influences on Brand Choices
Point-Of-Purchase Materials
Price Reductions and Promotional Deals
Outlet Atmosphere
Stockouts
Website Functioning and Requirements
Mobile Apps
Sales Personnel
Strategies used by manufacturers and retailers to influence in-store and online decisions:
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30. In-Store and Online Influences on Brand Choices
Point-Of-Purchase Materials
Shelf-Based Point-of-Purchase Materials
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31. In-Store and Online Influences on Brand Choices
Price Reductions and Promotional Deals
Price reductions and promotional deals
coupons
multiple-item discounts, and
gifts
are generally accompanied by the use of some point-of-purchase materials.
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32. In-Store and Online Influences on Brand Choices
Outlet Atmosphere
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33. In-Store and Online Influences on Brand Choices
Stockouts
Stockouts affect a consumer’s purchase decision.
Three types of perceived costs:
Substitution costs
Transaction costs
Opportunity costs
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34. In-Store and Online Influences on Brand Choices
Web Site Functioning and Requirements
Consumers often research online then buy in traditional stores. However, losses also occur during the online shopping process.
A DoubleClick study found the following reasons for shopping cart abandonment:
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35. In-Store and Online Influences on Brand Choices
Mobile and Mobile Apps
Mobile marketing is clearly seen as next horizon for marketers
local mobile search is changing how consumers find stores and brands within stores
mobile apps increasingly play role in how consumers shop, find the best deals, etc.
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36. In-Store and Online Influences on Brand Choices
Sales Personnel
The effectiveness of sales efforts is influenced by the interaction of
the salesperson’s knowledge, skill, and authority
the nature of the customer’s buying task
the customer-salesperson relationship
In the online context, marketers are testing online sales clerks, called avatars, that interact with customers as they shop on their website.
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