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6 Chapter 6 Web, Nonstore- Based, and Other Forms of Nontraditional Retailing RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition BERMAN EVANS.

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Presentation on theme: "6 Chapter 6 Web, Nonstore- Based, and Other Forms of Nontraditional Retailing RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition BERMAN EVANS."— Presentation transcript:

1 6 Chapter 6 Web, Nonstore- Based, and Other Forms of Nontraditional Retailing RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition BERMAN EVANS

2 6-2 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 6-3 Chapter Objectives (cont.)  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 6-4 Figure 6-1a: Approaches to Retailing Channels

5 6-5 Figure 6-1b: Approaches to Retailing Channels

6 6-6 Nonstore Retailing  Retailing strategy that is not store-based  It exceeds $375 billion annually  80% comes from direct marketing  Web-based retailing is fastest growing area

7 6-7 Nontraditional Retailing  Nontraditional retailing also includes formats that do not fit into the store and nonstore-based categories:  Video kiosks  Airport retailing

8 6-8 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 $300 billion  Other leading countries include * Japan * Germany * Great Britain * France * Italy

9 6-9 Characteristics of Direct Marketing Customers Married Upper middle class 35-50 years old Desire convenience, unique items, good prices

10 6-10 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

11 6-11 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

12 6-12 Data-Base Retailing  Collection, storage, and usage of relevant customer information * name * address * background * shopping interests * purchase behavior  Observation of 80-20 rule

13 6-13 Emerging Trends  Evolving activities  Changing customer lifestyles  Increasing competition  Increasing usage of dual distribution channels  Changing media roles, technological advances, and global penetration

14 6-14 Selection Factors by Customers  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

15 6-15 Figure 6-4: Executing a Direct Marketing Strategy

16 6-16 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

17 6-17 Outcome Measures  Overall Response Rate  Average Purchase Amount  Sales Volume by Product Category  Value of List Brokers

18 6-18 Table 6-1: Snapshot of U.S. Direct Selling Industry

19 6-19 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

20 6-20 The Role of the Web (cont.)  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

21 6-21 Figure 6-6: Web-Based Retail Sales Projections

22 6-22 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

23 6-23 Figure 6-9: A Checklist of Retailer Decisions in Utilizing the Web

24 6-24 Web Strengths  Using the Web –information –entertainment –interactive communications  Shopping Online –selection –prices –convenience –fun

25 6-25 Reasons NOT to Shop Online Trust Fear Lack of security Lack of personal communication

26 6-26 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

27 6-27 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

28 6-28 Figure 6-13: Airport Retailing and Borders


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