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.