Retail channel omnification definition

Retailing

Unrestricted

1

“All activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use.”

What is retailing?

2

Retailer:

Channel intermediary that sells mainly to consumers

What is retailing?

3

Type of ownership

Level of service

Product assortment

Price

Classification of retail operations

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Type of ownership

5

Independent retailer

Establishment is owned by an individual or a group

Chain store

Part of a group of the same stores owned and operated by a single organization

Franchise

Relationship in which business rights to operate and sell a product are granted by the franchisor to the franchisee

Full-service

Self-service

Level of service

6

Based on width and depth of product lines

Width: assortment of products offered

Depth: number of different brands offered within each assortment

Product assortment

7

Gross margin:

The amount of money a retailer makes as a percentage of sales, after subtracting cost of goods sold (COGS)

A warehouse club like Sam’s might have a low gross margin

A department store like Dillards might have a moderately high gross margin

Price

8

Types of in-store retailers

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Department stores

Specialty stores

Supermarkets

Drugstores

Convenience stores

Discount stores

Restaurants

Full-line discount stores

Supercenters

Specialty discount stores

Category killers

Warehouse club

Off-price retailers

Factory outlets

Used goods retailers

Types of in-store retailers

10

Discount stores

Shopping without visiting a physical location

Types:

Automatic vending (vending machines)

Direct retailing (Avon; Mary Kay)

Direct marketing (direct mail and mail order catalogs; shop at home networks like QVC)

Online retailing (e-tailing; Amazon)

Non-store retailing

11

Floor stock: inventory displayed for customers

Back stock: inventory held in reserve to refill floor stock if necessary

Specialty shops must often keep high amounts of both to accommodate customer needs

But, is expensive to purchase large amounts of product

Operating models

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Define and select a target market

Develop the “retailing mix” (same as services 7 Ps)

Marketing strategy for retailers

13

Includes advertising, PR and publicity, and sales promotion

Risk of brand cannibalization

Reduction of sales for one brand as the result of the introduction of a new product

Online shopping can also reduce in-store sales

Promotion strategy

14

Many chains (like McDonalds) will very carefully analyze areas for new stores

Economic growth potential

Amount of competition

Geography

Stores in isolated locations may become destination stores

Lifestyle centers are increasing in popularity

Place strategy

15

Place strategy – lifestyle centers

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Manipulate factors to influence store atmosphere

Employee type and density

Merchandise type and density

Fixture type and density

Sound, odors, and visual factors

Layout of store

Presentation – Physical environment

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Presentation – Physical environment

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Presentation – Physical environment

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Train your salespeople

Trading up (up-selling)

Suggestion selling (cross-selling)

Personnel - People

20

Service improvement may involve:

Minimizing wait times

Managing service capacity

Improving service delivery

Establishing channel-wide network coherence

Retailing services

21

Failure: when service provided does not meet customer expectations

Recovery: efforts by the firm to do something about unmet expectations

Actions for recovery in retail:

Notifying customers of stockouts

Liberal return policies

Product recalls issued in conjunction with promotional offers

Service failure and recovery

22

Big data analytics

Beacons

Connecting signals in store that bring info to consumers’ phones

RFID

For tracking in-store merchandise

And for knowing if a consumer picks up a product (i.e. considering buying it)

Trends in retailing

23

Shopper marketing

Understanding how consumers behave differently in different channels (like online vs in-store)

Shopper analytics

Collecting data to understand the consumer’s shopping experience

Attitudes, perceptions, emotions, and behaviors

Retailing services

24

Retail channel omnification:

Consumers use multiple sources for shopping information simultaneously

Click-and-collect:

Buy online, pick up in store

Robots

Lowe’s video: https://www.cnbc.com/2016/08/30/lowes-introduces-lowebot-a-new-autonomous-in-store-robot.html

Retailing services

25

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