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Multi-Channel MarketingThe way to better reach and satisfy your customer base.
Retail Channels The way the retailer sells and delivers
merchandise and services to its customers Internet Channel
Catalog Channel
Direct Selling
Television Home Shopping
Automated Retailing
89.89%
4.70%3.10%0.90%0.50%0.90%
store internet catalogdirect selling TV home shopping Automatic
Internet Retailing AKA
Online retailing Electronic retailing E-Retailing
Retail channel in which the offering of products and/or services for sale is communicated to customers over the internet.
Retailers using this channel dominate
Internet Channel Info. Facts
Accounts for 10% of retail sales ¼ Look up Basic information about stores
22% research merchandise
21% compare prices 21% download coupons
for use in stores
Catalog Channel Non store retail channel in which the retail offering is
communicated to customers through catalogs each year.
Main products sold through catalogs Beauty products Drugs Computers and software Clothing and accessories Furniture Books and magazines Music
Catalog Channel Info. 1.3% of catalogs result in a direct sale 3% of 80 million tons of paper used to
produce. More than magazines or books. View by many as a waste of resources
Declining in market share
Role changing to drive traffic to the internet
Direct Selling A retail channel in which sales
people interact with the consumers face-to-face in a convenient location, either at the consumers home or at work.
Sales person explains FAB of product to consumer
Very costly to train and maintain information on products
Direct Selling Info. $30 billion US; $100 billion World
Wide
Two types of Direct selling Party Plan system – Throw a party to
sell products Multilevel system – Independent
business people recruit other people to become distributers under them
Watch out for pyramid schemes
Direct selling Info Almost all 14 million people working in
direct selling are independent agent. Largest Categories
Personal care Home and family Wellness Leisure Educational items
Television Home Shopping A retail channel in which consumers
watch a television program that demonstrates Merchandise and then places orders, usually by phone internet or the TV remote
TV Home Shopping Info. Infomercials - are programs dedicated
that mix entertainment with product demonstrations then solicit orders place by phone. 30 to 60 mins
Direct response advertising – one or two min advertisements on TV or radio offering opportunity to order.
TV Channel Info Cont. Top Retailers
HSN QVC Shop NBC Jewelry Television
Majority of viewers who actually watch don’t do it regularly nor actually purchase products or services
Automated Retailing Is a retailing channel in which merchandise
or services are stored in a machine and dispensed to customers when they deposit cash or use credit.
Vending machines are typically placed in convenient , high-traffic locations such as workplaces, malls, airports, or universities.
Auto. Retailing Info. Airports Show case
ZoomShops Sony Products Proactive Rosetta Stone
Local Redbox DVD rental Soda and Candy Machines
Store Channel Benefits Touching and feeling Personal service Risk reduction Immediate gratification Entertainment and social experience Browsing Cash payment
Catalog Channel Benefits Safety
Convenience Reference off coffee table Take it to the beach
Internet through cell phone provides dipping into this channel
Internet Channel Benefits Broader and deeper assortments
More timely information for evaluating merchandise
Personalization Cookies Memberships Format information
Net Channel Benefits Cont. Side by side comparison Instant alternatives Live chats Recommendations
ATG has number crunching soft ware that recognizes characteristics of times of day, gender location in consideration
iShop
Net Channel Issues Loosing sales to applications that find
the lowest price Perceived risk with electronic shopping
Credit cards and internet concerns CC companies offer protection
Potential privacy exposure Breaches kills retailers reputation Data mining and how its used or sold
Benefits of Multi ChannelRetailing Overcoming the limitations of an
existing format Increase assortment Low cost, consistent execution Current information
Increase customer satisfaction and loyalty
Benefits of Multi ChannelRetailing Cont.
Benefits of Multi ChannelRetailing Cont. Gaining insight into customers shopping
behavior Up-sell other products Cookies develop patterns for
recommendation Expanding market presence
Limited retail locations Rural market access
Benefits of Multi ChannelRetailing Cont. Building priority information about
consumer behavior and purchase history Conventional cant link purchases to
purchases Unique “how-to” knowledge about
coordinating operational activities Synergistically coordinate different
channels
Other Multi-Channel Retailing Issues Which channel has the lowest cost
Typically E sells Can be more expensive than a outlet
Website development maintenance Advertising Distribution System Dedicated warehouses High level of returns
Other Multi-Channel Retailing Issues Will manufactures bypass retailers and sell
directly Disintermediation occurs when manufacturer sells
directly to consumers, bypassing retailers Why wont this happen
Retailers have more experience in marking to the end consumer
Provide a broader array of products Timing and matching of different manufacturer
products Loss of support of retailers
Challenges of Effective Multi Channel Retailing (CEMCR)
Consumers want recognition in all channels
Use one channel to communicate the other channels through cross promotion
Cross expenditures Warehouse at stores Returns at stores Store Pickup to save on shipping
costs
Challenges of EMCRBroken Down
Providing an integrated Shopping experience. Distribution center needs are different
DC becomes a ware house as well Marketing plan changes Information system integration
Store information system Product centric Non-store information systems Customer Centric
Challenges of EMCRMarket trends Walmart started with a separate management
concept when it started www.walmart.com Originally managed by network specialists Since has realized integration is the key
JCPenny had everything separate when it started its on line store. Separate marketing, warehousing and
promotion. Since has realized integration is the KEY!
Some retailers out source for online channel management Limits competitive advantage
Challenges of EMCRSupporting M CommerceThe purchase of goods and services through mobile devices Predicted to be $120 mil. 8% of e-commerce Hardware limitations
ESPN has mobile specific site Store applications is a growing trend
Macy’s iShop browsing of 12 departments Scrolling wheel allows fine tuning Then with two click you can have it sent to a store
or your home. Also used as a promotional tool
Point out clearances, sales etc. to draw business
Challenges of EMCROrganizing for Multi-Cannel Retailing Select complete integration
Same product at the same prices Same promotions and sales
Select different organization or each channel Allows tailoring to the specific channel Requires management of each market
In selecting which to deploy must consider Customer database Consistence Brand image Pricing Merchandise assortments across channels
Challenges of EMCROrganizing for Multi-Cannel Retailing
Centralized customer database Allows exploitation of consumer data to improve
the shopping experience Allows better understanding of What the consumer
wants Allows for seamless transition between channels
Brand image Gives new media to “Brand“. Matching of brand image
important Reduces consumer feeling Lost
Challenges of EMCROrganizing for Multi-Cannel Retailing
Merchandise Assortment Okay to have different assortment in each channel
On line typically have a deeper and broader selection
Easier to carry product that doesn't have broad appeal
Does your product or store need coverage of the touch and feel nature of humans? Stores
Does your product or service do better in “look-and-see”? On-line
Challenges of EMCROrganizing for Multi-Cannel Retailing
Pricing Competition may require pricing variance
On line VS store Barn’s and Noble has lower prices to compete
with Amazon
Location vary pricing due to local market Oriley Auto parts varies it price to cover
different shipping costs and what the market expects
Challenges of EMCROrganizing for Multi-Cannel Retailing
Reduction of Channel Migration Channel migration is consumers collecting
information about products on their channel then going to a competitor to make the purchase.
78 % of people will check a web site then go to a retail outlet.
8% Shop at stores then go to purchase online
Two approaches to reduce Offer uniquely relevant information based on
preparatory data the retailer has collected on the consumer
Promote private label merchandise that can only be purchased from that retailer
Multichannel Shopping in the Future Evolve or die
Retailing is ever changing and if a retailer don’t change with the times they may fall behind Chips in Store cards to alert store personnel of the
nature of the consumer purchasing habits Simulators for how you would look or use the product
on mobile devices Small devices in store retail associates can use to
look up specifics of a products 3D picture that can be manipulated with a mouse
and keyboard
KEY TERMSAutomated retailing E-tailing Online retailing
Catalog channels infomercials Party plan system
Channel Migration Internet retailing Pyramid scheme
Direct-response advertising
Live chat Retail channel
Direct selling M-commerce Share of customers
disintermediation Multichannel retailer
Television home shopping
Electronic retailing Multilevel system Vending machines
Assignment 1Retail Channels
Please make a Prezi on the different retailing channels. You will want to provide Examples of each not provided in the book. Please explain why that retailer may have chosen that particular channel. Include:
Internet channels Catalog channels Direct selling Television home shopping Automated retailing
Assignment 2 Benefits Offered By Each Retail channel
In a Blalberize or Comics Life, please chose two retailers and compare the channels they have chosen to utilize. You will want to include: Store channel Catalog channel Internet channel The concerns related to each channel and
how they may over shadow the benefits of each
Assignment 3Benefits of Multi-Channel Retailing
In Photo Peach or Prezi, create your story on the benefits of multi-channel marketing. Choose two examples of retailers; One that could benefit from adding and one that utilizes multi-channel marketing to Overcome the limitations of an existing format Increase customer Satisfaction Gain insight into consumer shopping behavior Expanding market presence Building a strategic advantageIn the retailer not using multi-channel marketing, explain how it is hurting them. With the retailer using the multi-channel marketing show how they are stronger than the similar competition.
Assignment 4Other Multi channel Retailing Issues
In Prezi, or a Power Point explain what channel has the lowest cost and provide an example of a company that uses that channel.
In the same Prezi or Power Point, provide an
example of a retailer who has bypassed retailers and sells directly to consumers. Explain why they may have chosen to do so.
Assignment 5Challenges of Effective Multi-Channel Retailing
Interview a local business that utilizes multi-channel retailing and make a video or audio. You will want to cover how they are using multi-
channel retailing to intergrade the shopping experience
Has M Commerce been a positive or negative effect on their business
Has it created a centralized customer data base Has it effected their brand image Has their merchandise assortment grown as a result What kind of pricing effect has it had on them Have they notice a problem with channel migration
how that affect them
Assignment 6Multi-channel shopping in future
Here you will want to use Photo Peach or Comics Life to provide six example of the future of multi-channel marketing and how it has altered the experience. Include things that make you say “WOW! I love how this allows me to understand the product or service more.” Since the internet is the “future. Finding those examples on-line retailers is probably the easiest.