FASHION RETAIL INDUSTRY Retailing Management 8th Edition Levy Weitz Chapter 3 Multi Channel Retailing Internet access has significantly changed shopping behaviors and the retail industry 80 of retailers sell merchandise through multiple retail channels RETAIL CHANNEL the way a retailer sells delivers merchandise services to customers brick and mortar stores most common STORE BENEFITS touch feel products personal service risk reduction immediate gratification cash payment social experience browsing CONSTRAINTS OF STORE CHANNELS size and inconsistent execution of services MULTICHANNEL RETAILER sells merchandise services through multiple retail channels Other Channels Internet Catalogs Direct Selling TV Home Shopping Automated Retailing INTERNET CHANNEL online retailing electronic retailing e tailing offer products services and communication with customers online customers have access to information about stores merchandise comparing prices coupons ect BENEFITS broader deeper assortment timely info for merchandise evaluation personalization tailor merchandise and recommendations PERCEIVED RISKS privacy security credit cards personal info CATALOG CHANNEL non store retail offerings communicated in catalog mailed to the customer 50 of U S consumers shop through catalogs BENEFITS safety convenience DIRECT SELLING sales people interact with customers face to face in convenient location demonstrate and explain merchandise service benefits highly interactive extensive demonstration costly PARTY PLAN SYSTEM of all direct sales sales people encourage customers to act as hosts to invite friends coworkers family to a party where merchandise can be demonstrated and ordered Host Hostess receives gift commission based on idea that relationships influence purchase decisions MULTILEVEL SYSTEM independent sales people serve as master distributors and recruit people to become distributors in their networkPYRAMID SCHEME illegal firm and program designed to sell merchandise services to other distributors rather than an end user founders initiators profit from inventory bought by later participants TV HOME SHOPPING customers watch TV programs that demonstrate merchandise and place orders via phone internet or remotes i e HSN QVC INFOMERCIALS 30 60 minute programs with demonstration and entertainment mix to solicit orders placed via telephone DIRECT RESPONSE ADVERTISING 1 2 minute ads on tv radio describe products and allow consumers to purchase AUTOMATED RETAILING merchandise services stored in a machine and dispensed to paying customers located at convenient high traffic locations i e vending machines Red Box BENEFITS OF MULTCHANNEL RETAILING Increase assortments Overcoming limits of existing formats Low cost consistent execution Current information Increased customer satisfaction loyalty Insight to consumer shopping behaviors ISSUES CHALLENGES OF MULTICHANNEL RETAILING manufactures bypass retailers and sell directly to consumers Cost of selling through different channels DISINTERMEDIATION Providing integrated shopping experience Supporting M COMMERCE mobile commerce browse purchase products services through mobile devices Organizing for multichanneling with centralized customer database brand image merchandise assortment pricing reduction of channel migration CHANNEL MIGRATION customers collecting info on products through one channel and purchasing through a channel of a competitor CANNIBALIZATION sales in one channel harms sales in another SHARE OF CONSUMERS WALLETS of purchases made at a specific retailer