ILK 3 –MULTICHANNEL

RETAILING

Prepared by:

GUALBERTO D. AGRIS, DPA

Course Facilitator

September 10, 2020

LEARNING OUTCOMES:

1. Understand the non-store channels

offered by retailers.
2. Compare the benefits offered by the
four major retail channels: stores,
Internet, and catalogs.
3. Understand the issues facing
multichannel retailers
WHAT IS MULTICHANNEL
RETAILING?

• Multichannel retailing involves using more

than one channel to sell and deliver
merchandise and services to consumers.
• The birth of multichannel retailing can be
traced back in 1925.
NONSTORE RETAIL CHANNELS

1. Internet Retailing Channels—Electronic and

Mobile Retailing
2. Catalog Channel
3. Direct-Response TV Channel
4. Television Home Shopping Channel
5. Direct Selling Channel
6. Automated Retailing (Vending Machines)
Channel
BENEFITS OF RETAIL
CHANNEL

1. Store Channel
• Touching and Feeling Products
• Personal Service
• Risk Reduction
• Immediate Gratification
• Entertainment and Social Experience
• Browsing
• Cash Payment
BENEFITS OF RETAIL
CHANNEL
2. Catalog Channel
• consumers can look at merchandise and place an order
from almost anywhere, 24/7, without needing a
computer, mobile device, or Internet connection
(SAFETY).
• consumers can refer to the information in a catalog any
time by simply picking it up from the coffee table
(CONVENIENCE).
• catalogs are easier to browse through than websites
(EASE TO USE)
BENEFITS OF RETAIL
CHANNEL
3. The Internet Channel
• Deeper and Broader Selection
• More Information for Evaluating Merchandise
• Personalization
• Expand Market Presence
• Provide Information to Improve Shopping Experience
Across Channels
• Perceived Risks in Internet Shopping
CHALLENGES FACING
MULTICHANNEL RETAILERS

1. Multichannel Supply Chains and Information Systems

• Multichannel retailers still struggle to provide an integrated shopping
experience because the various channels demand various skills, as
well as unique resources

2. Centralized versus Decentralized Multichannel Retailing

• Each channels offer a unique set of benefits, the profiles of a retailer’s
customers who use the different channels are not the same. Thus, a
critical decision facing multichannel retailers is the degree to which
they should integrate the operations of the channels or have
different organizations for each channel.
CHALLENGES FACING
MULTICHANNEL RETAILERS
3. Consistent Brand Image across Channels
• For example, Patagonia reinforces its image of selling high-quality,
environmentally friendly sports equipment in its stores, catalogs, and
website.

4. Merchandise Assortment
• For example, multichannel retailers offer a broader and deeper
merchandise assortment through their Internet channel than through
their store channels.

5. Pricing
• Many customers expect prices to be the same across channels
(excluding shipping charges).
1. UNDERSTAND THE NONSTORE
CHANNELS OFFERED BY
RETAILERS.
 UNDERSTAND THE NONSTORE CHANNELS
OFFERED BY RETAILERS.

• A retail channel is the way a retailer sells and delivers merchandise and services
to its customers. The most common channel used by retailers is a store. Retailers
also use a variety of nonstore channels including the Internet, mobile, catalogs,
direct mail, direct selling, television home shopping, direct response TV, and
automated retailing (vending machines) to make sales to customers. Multichannel
retailing involves using more than one channel to enhance the customer
satisfaction experience and exploit the synergies between channels. Some of the
challenges facing multichannel retailers are due to the operational and
organizational differences inherent in managing multiple information and supply
chain systems, channel operations, pricing, branding, and assortments.
2. COMPARE THE BENEFITS
OFFERED BY THE FOUR MAJOR
RETAIL CHANNELS: STORES,
INTERNET, AND CATALOGS
COMPARE THE BENEFITS OFFERED BY THE FOUR
MAJOR RETAIL CHANNELS: STORES, INTERNET, AND
CATALOGS

• cannot get when they shop through non-store channels such as Internet, or
catalogs. These benefits include touching and feeling products, personal service,
increased customer service, risk reduction, immediate gratification, cash
payments, and entertainment and social experiences.
• The catalog channel, like all non-store channels, provides safety and convenience
benefits to customers. Using the catalog channel, consumers can look at
merchandise and place an order from almost anywhere 24/7 without needing a
computer, mobile device, or Internet connection. Second, consumers can refer to
the information in a catalog anytime by simply picking it up from the coffee table.
Finally, catalogs are easier to browse through than Web sites.
COMPARE THE BENEFITS OFFERED BY THE FOUR
MAJOR RETAIL CHANNELS: STORES, INTERNET, AND
CATALOGS

• There are five advantages of the Internet channels. First, the addition of the
Internet channels has the potential to offer a greater selection of products.
Second, they allow retailers to provide more information. Third, they enable
retailers to provide customers with more personalized information about
products and services. Fourth, they offer sellers the unique opportunity to
collect information about consumer shopping. Fifth, the Internet channels provide
an opportunity for retailers to enter new markets economically. Finally, they
provide information that they can use to improve the shopping experience
across all channels. Some consumers are concerned about buying products
through an Internet channel.
3. UNDERSTAND THE ISSUES
FACING MULTICHANNEL
RETAILERS
 UNDERSTAND THE ISSUES FACING
MULTICHANNEL RETAILERS

• Multichannel retailers are still struggling to provide an integrated shopping

experience across all their channels because unique skills and resources are
needed to manage each channel. A critical decision facing multichannel retailers is
the degree to which they should integrate the operations of the channels or have
different organizations for each channel. Since each of the channels offers a unique
set of benefits, the profiles of a retailer’s customers who use the different channels
are not the same. Retailers need to provide a consistent brand image of
themselves and their private-label merchandise across all channels. Pricing
represents another difficult decision for a multichannel retailer. Finally, the
availability of an Internet channel enables customers to easily search for
information about products and their prices during a shopping episode.
ACTIVITY 3

1. Why are store-based retailers aggressively pursuing sales

through Internet channels?
2. From a customer’s perspective, what are the benefits and
limitations of stores? Catalogs? Retailer websites?
3. Would you buy clothes on the basis of the way they look
on a customized virtual model? Why or why not?