Retail Multichannel

Retail, IIPMB

1. Multi-Channel Retailing

2. 3-2
Questions
■What are the unique customer benefits offered by the
three retail channels – stores, catalogs, and the Internet?
■Why are retailers moving toward using all three
channels?
■How do multichannel retailers provide more value to their
customers?
■What are the key success factors in multichannel
retailing?
■How might technology affect the future shopping
experience?

3. 3-3
The Multi-Channel Retailer
Retailer
A retailer that sells merchandise or service through more than one
channel. By using a combination of channels, retailers can exploit
the unique benefits provided by each channel.

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Why are Retailers Using Multiple Channels
to Interact with Customers?
■Customer wants to interact in different ways
■Each channel offers a unique set of benefits for
Customers

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More Reasons for Becoming
a Multi-Channel Retailer
- Increase Share of Wallet
- Overcome Limitations of Existing Format
- Expand Market
- Provide services more cost-efficiently
- Leverage Existing Assets
- Brand Name, Inventory, Customer Database
- Develop Insights in Customer Shopping Behavior

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Why are Retailers Using Multiple Channels
to Interact with Customers?
customer
Consumers buy what they want,
When they want,
Wherever they want
store kiosk catalogCall centerWeb/E-mail mobile

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Benefits Provided by Different Channels

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Unique Benefits Provided by Store Channel
■Browsing
■Touching and feeling
■Personal service
■Cash and credit payment
■Entertainment and social interaction
■Immediate gratification
■Risk Reduction
(

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Benefits Provided by Catalog Channel
Convenience
Information
Safety
Hoby Finn/Getty Images

10. Vending kiosk
3-10

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Impediments to Shopping On-Line
Are the benefits of shopping on-line greater than the
benefits of going to a store?

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Internet Channel
■Broader Selection
■More and Better Information to Evaluate Merchandise

Drill Down as Much as You Want

Full motion Video
■Personalization

Information is tailored to Individual consumers to help them
make quicker and better purchase decisions

Customized Information -- Side By Side Comparisons, Full
Motion Video

Try It On Virtually
■Information for Solving Problems, Not Just Merchandise
Characteristics

Virtual Communities

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More and better information to evaluate
merchandise

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Side-by-Side Comparison

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Personalized Customer Service

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Problem Solution Benefits
Offered By Internet Channel
■Bundling
Information,
Services, and
Products
■Examples

iVillage

The Wedding
Channel

Garden.com

17. 3-17
Virtual Communities
People who seek information, products and services
communicate with each other regarding specific issues
Social shoppers: seek not just information but also an
enhanced emotional connection to others participants in
the shopping experience
Royalty-Free/CORBIS

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Virtual Communities
■Virtual community is a network of members sharing
common interests that interact with each other
electronically.
■Examples:

IVillage – Women

Pricegrabbers.com; Epinion.com–product comparisons
and reviews

Flypaper.com – talks about fashion

ThisNext.com, Kaboodle.com, Wists.com, StyleHive.com
– social shopping that combines shopping and social
networking

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Virtual communities
Source. Future Trends in Microelectronics and IT, IBM Research from http://www-
05.ibm.com/cz/events/power6/pdf/Ton%20Engbersen_Trends%20in
%20microelectronics.pdf

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What People Buy Over the Internet
Travel
PC/Electronics/Toys
Books/Software
Apparel
Home & Garden
Jewelry & Watches

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How to Sell Over the Internet
…and eliminate returns
Branding:
National brands provide a consistent experience for
customers to overcome not being able to touch and
feel.
The McGraw-Hill Companies, Inc./Jill Braaten, photographer
How Can the Electronic Channel
Overcome Limitations?

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My Virtual Model: Try It On
Link to My Virtual Model H & M

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Ecommerce Myths
■Low Cost of Entry
■Overestimate Importance of
Technology, Under Estimated Need for
Traditional Resources
■First Mover Wins
■Gets Rid of the Middleman

24. ■Some of the challenges you’ll face and have to
address when starting an online eCommerce
company include making your site mobile-
responsive, having a defined social media
strategy, as well as creating and using coupons
and promo codes.
3-24

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Will Electronic Channel’s Low Search Cost
Increase Price Competition?
■Conventional Wisdom

Greater Comparison Shopping

Offerings Easily Compared on Price

Lower Search Costs => More Emphasis on
Price
■Empirical Evidence

Substantial Price Dispersion

Lower Search Costs for Quality Information=>
Less Price Sensitivity

Lower Search Costs Lead to Better Decisions

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Widespread Disintermediation Unlikely
Will Manufacturers Bypass Retailers and
Sell Directly to Consumers?

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Issues in Multi-Channel Retailing
■Integrated Shopping Experience

Communicate with customers anytime,
anywhere through multiple channels

Website, Store, Kiosks, Handheld Devices

Integrating legacy systems for seamless
customer interface
■Brand Image

Consistent brand image across different
channels
■Merchandise assortment offered in each channel
■Pricing across channels

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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
Kiosks
• Visual
• Convenient
Handheld Devices
• Immediate
• 24x7
Brick & Mortar
• Touch/Feel
• Experience driven
Consumers buy
what they want,
when they want,
wherever they want

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Channels Offer Complementary Benefits
Stores Internet Catalog
■Known Entity
■Entertaining/ Social
Experience
■Easy Checkout and
Returns
■Personal Assistance
■Product Trial-
Complementary
Merchandise
■Immediate Gratification
■Location Convenience
■Speed
■Greater Selection
■Personalized
Presentation
■Community
■Portability
■High Quality Visual
Presentation

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Source: Progressive Grocer, 01 Feb 00; Grocery Headquarters, 01 Feb 00.
Consumer does not find
desired item in the store.
Consumer goes to
kiosk to search for
product
Kiosk 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

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Opportunities to
Enhance Multi-Channel Experience
■Order on Internet, Pick-Up in Store
■Promote Web Site on Receipts, Shopping Bags
■Product Availability in Stores Available on Website
■Kiosk in Stores to Order Merchandise Not Available in
Stores
■Plan Purchases (Shopping List) on Website
■In-Store Events Promoted on Website
■Ad Curricular on Website

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Shopping in the Future

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Integration – Key to Multi-Channel Retailing
Create a Seamless
Experience
Make it Easy Provide Support
Know thy
Customer
• Ordering
• Returns
• Refunds
•Call Center
•Shopping
Advice
•Customer
Service
•Needs and
preferences
•One to One
Marketing
•Synchronized &
consistent service
regardless
of channel
Shopping
Experience

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