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Exploring Nonstore-Based Retailing Strategies

Learn about direct marketing, vending machines, web retailing, and more. Understand the benefits, limitations, and trends in nontraditional retailing. Discover strategic approaches to reach customers in innovative ways.

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Exploring Nonstore-Based Retailing Strategies

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  1. Chapter 6 RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition Web, Nonstore-Based, and Other Forms of Nontraditional Retailing BERMAN EVANS

  2. Chapter Objectives • 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

  3. 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

  4. Figure 6-1a: Approaches to Retailing Channels

  5. Figure 6-1b: Approaches to Retailing Channels

  6. Direct Marketing • Customer is first exposed to a good or service through a nonpersonal medium and then orders by mail, phone, fax, or computer (Direct mail, Tv, radio, Magazine, News paper) • Annual U.S. sales exceed $300 billion • Other leading countries include • Japan • Germany • Great Britain • France • Italy

  7. Characteristics of Direct Marketing Customers • Married • Upper middle class • 35-50 years old • Desire convenience, unique items, good prices gifts ,food, books,

  8. Strategic Business Advantages of Direct Marketing • Reduced costs • Lower prices • Large geographic coverage • Convenient to customers • Ability to eliminate sales tax for some

  9. Strategic Business Limitations of Direct Marketing • Products cannot be examined prior to purchase • Costs may be underestimated • Response rates to catalogs under 10% • Long lead time required • Industry reputation sometimes negative

  10. Data-Base Retailing: Key to Success Direct marketing • Collection, storage, and usage of relevant customer information • name • address • background • shopping interests • purchase behavior

  11. Emerging Trends • Evolving activities(Technology ,using Multi channel retailing, Data base focusing ) • Changing customer lifestyles (worker women no time) • Increasing competition ( Decreasing costs) • Increasing usage of dual distribution channels • Changing media roles, technological advances, and global penetration(Catalogues & TV)

  12. Figure 6-4: Executing a Direct Marketing Strategy

  13. Figure 6-4: Executing a Direct Marketing Strategy • Business definition : Pure direct marketing or in multi-channel retailing, General products or specific products • Generating customers: 1. buying a list name of customers , download this list, send out a blind mail for all . 2. Advertise in magazine, news paper ask to order through e-mail ,phone or fax 3. Contact consumers who have bought from the firm • Media Selection ( Catalogue ,direct mail, magazine ,news paper) • Presenting Massage: ( Includes reason of buying, data of goods & services, price, address, phone number) • Customer contact: regular, nonregular or new • Customers response: ( Mail, Phone ,and fax), request more information ask for catalogue, ignore massage 2 to 3% who buy by this way • Order fulfillment

  14. Outcome Measures • Overall Response Rate • Average Purchase Amount • Sales Volume by Product Category • Value of List Brokers

  15. Direct Selling & Vending Machine • Direct Selling: Includes both personal contact with consumers in their homes and offices, and phone solicitations initiated by retailers. • Vending machine : Is a cash or a card retailing format that dispense goods and services

  16. World Wide Web (WWW) Electronic Retailing • Is one way to access information on the internet 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

  17. 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

  18. Figure 6-8: Five Stages of Developing a Retail Web Presence 1. Brochure Web Site: small budget ,few products 2. Commerce Web Site: Full scale selling with customers service 3. Integrated Web Site: with inventory ,accounting system 4. The ‘Webified’ Store: Network system helps in selling nonstore items 5. Site Integrated with Manufacturer Systems: Combine with all information's

  19. Using the Web information entertainment interactive communications Shopping Online selection prices convenience fun Web Strengths

  20. Reasons NOT to Shop Online Trust Fear Lack of security Lack of personal communication

  21. 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

  22. Features of Airport Retailing • Large group of prospective shoppers • Captive audience • Strong sales per square foot of retail space • Strong sales of gift and travel items • Longer operating hours • Duty-free shopping possible

  23. Figure 6-13: Airport Retailing and Borders

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