Web, Nonstore-Based, and Other Forms of Nontraditional Retailing

 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

Chapter Objectives

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

6-3 3

Approaches to Retailing Channels

6-4 4

Approaches to Retailing Channels

6-5 5

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

6-6 6

Direct Marketing
Customer is initially exposed to a good or service through a non-personal medium and then orders by mail, phone, fax, or computer

6-7 7

Characteristics of Direct Marketing Customers

Married Upper middle class 35-50 years old Desire convenience, unique items, good prices

6-8

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
6-9 9

Strategic Business Limitations of Direct Marketing

Products often 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

6-10 10

Data-Base Retailing
Collection, storage, and usage of relevant customer information
* * * * * name address background shopping interests purchase behavior

Observation of 80-20 rule

6-11 11

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

6-12 12

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
6-13 13

Executing a Direct Marketing Strategy

6-14 14

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

6-15 15

Outcome Measures

Overall response rate Average purchase amount Sales volume by product category Value of list brokers

6-16 16

 Vending machines are a cash- or card-operated retailing format that sells goods and services. Eliminates the use of sales personnel and allows 24-hour sales. Machines placed wherever convenient for consumers.

Vending Machines

6-17 17

Emergence of World Wide Web

The World Wide Web (Web) is a way to access information on the Internet. People work with easy-to-use Web addresses (sites) and pages. Web users see words, charts, pictures, and video while hearing audio. Both Internet and World Wide Web convey the same central theme: online interactive retailing.

6-18 18

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

6-19 19

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
6-20 20


WebBased Retail Sales Projections

6-21 21


Five Stages of Developing a Retail Web Presence

6-22 22


Checklist of Retailer Decisions for the Web

6-23 23

Web Strengths

Using the Web

information entertainment interactive communications

Shopping Online
selection prices convenience fun

6-24 24

Reasons NOT to Shop Online

Lack of trust Fear Lack of security Lack of personal communication

6-25 25

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

6-26 26

Video Kiosks
A video kiosk is a freestanding, interactive, electronic computer terminal that displays products and related information. Some kiosks are located in stores to enhance customer service; others let consumers place orders. There are 2.2 million video kiosks in use throughout the world, nearly 1 million of which are Internet-connected.
6-27 27

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

6-28 28

Airport Retailing and Starbucks

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

6-29 29