LESSON 3

Multichannel and
Omnichannel Retailing

Adapted from:

Levy M., Weitz B. and Grewal D., Retailing Management, 10th

Edition, McGraw-Hill, New York, 2019,

©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
 Learning Objectives
Learning Objective 3-1 Understand the channels used by
retailers.
Learning Objective 3-2 Compare the relative strengths of
the major retail channels: stores; Internet,
mobile, and social; and catalog and other
nonstore channels.
Learning Objective 3-3 Describe the opportunities
associated with a true omnichannel strategy.
Learning Objective 3-4 Analyze the challenges facing
multichannel and omnichannel retailers.

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 The “Connected Store”

A mirror with an
interactive touch
screen allows the
consumer to see
the latest content
from the brand.

©McGraw-Hill Education. © Bebeto Matthews/AP Images

 Retail Channels
Learning Objective 3-1 Understand the channels used by retailers.

Retail channel
• The opportunity to complete a transaction
• Stores, Internet, mobile, social media, catalogs
Single-channel retailing
• Sell and deliver through only one channel
Multichannel retailing
• Cross-channel retailing
• Omnichannel retailing

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 Exhibit 3-1 Progression from Single-
Channel to Omnichannel Retailing

Jump to long description in

appendix
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 Relative Strengths of Retail Channels 1 of 5

Learning Objective 3-2 Compare the relative strengths of the major retail
channel stores: Internet, mobile, and social; and other nonstore channels.

In-Store Retailing
• Touch and smell of products
• Personal service
• Risk reduction
• Immediate gratification
• Entertainment and social experience
• Cash payment

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 EXHIBIT 3-2 U.S. Retail Sales by Type of
Retailing

Jump to long description in

appendix Sources: U.S. Census Bureau; www.internetretailer.com.
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 Relative Strengths of Retail Channels 2 of 5

Internet Retailing
• Mobile retailing, mobile commerce, m-commerce
• Deeper and broader selection
• More information for evaluating merchandise
• Personalization
• Live chats
• Expanded market presence
• Information to improve shopping experience across channels
• Perceived risks in Internet shopping

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 Retailers Expand Presence by Adding an
Internet Channel

L.L. Bean has

relatively few
stores, but has
a vast catalog
and Internet
presence that
significantly
expands its
market.

©McGraw-Hill Education. © Robert F. Bukaty/AP Images

 Relative Strengths of Retail Channels 3 of 5

Mobile Retailing
• Customers access retail sites from anywhere
• Location sensitive
• Biggest disadvantage is smaller viewing screen
• Some retailers design distinct websites and apps for
different devices

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 Relative Strengths of Retail Channels 4 of 5

Social Retailing
• S-retailing involves conducting purchase
transactions through social media sites
• Twitter, Pinterest, Instagram have “buy buttons”

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 Relative Strengths of Retail Channels 5 of 5

Catalog and Other Nonstore Channels

• Catalog channel
• Place an order from anywhere
• Can access catalog anytime
• Can be easier to browse than website
• Direct Selling
• Face-to-face interaction with customer at home or work
• Automated Retailing
• Vending machines

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 EXHIBIT 3-3 Benefits Provided by Major
Channels

Jump to long description in

appendix
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 Opportunities Facing Multichannel and
Omnichannel Retailers
Learning Objective 3-3 Describe the opportunities associated with a true
omnichannel strategy.

Multiple channels to build competitive advantage

Consumers want to be recognized
Retailer must facilitate finding, picking-up
merchandise
Various channels need to be consistent
Retailers can use channels to stimulate store visits

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Retailers benefit by using channels synergistically

Multichannel and omnichannel retailers can use

their shopping bags to promote their website.
©McGraw-Hill Education. © Jason Alden/Bloomberg/Getty Images
 Challenges Facing Multichannel and
Omnichannel Retailers 1 of 3
Learning Objective 3-4 Analyze the challenges facing multichannel and
omnichannel retailers.

Multichannel and Omnichannel Supply Chains and

Information Systems
• Struggle to provide an integrated experience
Consistent Brand Image across Channels
• All channels should present a consistent image and
each channel reinforces the image

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 EXHIBIT 3-4 Percentage of Multichannel
Retailers Offering Cross-Channel Fulfillment

Cross-Channel Fulfillment High-Performance Others

Activities Retailers
Buy online, return in store 70% 59%
Buy in store, fulfill through online 70 41
Buy online, pick up in store 50 52
Buy via mobile 35 48
Buy via social media source 30 11
Buy online, fulfill through any stop 30 30

Source: Omni-Channel 2012: Cross-Channel Comes of Age, 2012 Benchmark, RSR, June 2012.

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 Challenges Facing Multichannel and
Omnichannel Retailers 2 of 3
Merchandise Assortment
• Internet channel offers broader, deeper merchandise
assortment
• Store channel better suited for “touch-and-feel”
products
Pricing
• Retailers adjust prices based on competition in
different channels

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 Challenges Facing Multichannel and
Omnichannel Retailers 3 of 3
Reduction of Channel Migration
• Showrooming can be reduced by
• Providing better customer service
• Offering unique relevant information based on customer data
• Promoting private-label merchandise

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 Key Terms 1 of 4
automated retailing A retail channel that stores merchandise or services in a
machine, then dispenses them to customers who provide cash or a credit
card.
catalog channel A nonstore retailer that communicates directly with customers
using catalogs sent through the mail.
channel migration A customer practice in which customers search for
information from a retailer’s channel, then purchase in a different channel
maintained by a competitor.
cross-channel retailing A type of marketing channel in which customers use
multiple channels to make purchases, such as when they receive an e-
mailed coupon, download it onto their smartphone, and then go to a store to
redeem the coupon and buy the product.

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 Key Terms 2 of 4
direct selling A retail format in which a salesperson, frequently an independent
distributor, contacts a customer directly in a convenient location (either at a
customer’s home or at work), demonstrates merchandise benefits, takes an
order, and delivers the merchandise to the customer.
Internet retailing A retail format in which retailers communicate with customers
and offer products and services for sale over the Internet.
live chat Technology that enables online customers to access an instant
messaging or voice conversation with a sales representative in real time.
m-commerce Internet channels accessed through tablets, smartphones, or
other handheld devices. Also known as mobile marketing, mobile
commerce, or mobile retailing.

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 Key Terms 3 of 4
mobile commerce Internet channels accessed through tablets, smartphones,
or other handheld devices. Also known as mobile marketing, m-commerce,
or mobile retailing.
mobile retailing Internet channels accessed through tablets, smartphones, or
other handheld devices. Also known as mobile marketing, mobile
commerce, or m-commerce.
multichannel retailing Selling merchandise or services through more than one
channel.
omnichannel retailing Coordinated multichannel retail offering that ensures a
seamless customer experience across all the retailer’s channels.
retail channel The means by which a retailer sells and delivers merchandise to
customers.

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 Key Terms 4 of 4
showrooming A practice in which customers visit stores to interact with a
physical product and receive sales assistance, then purchase it through a
less expensive channel, such as online.
single-channel retailing Selling merchandise or services through only one
channel.
social retailing Conducting purchase transactions through a social media site.
Also called s-retailing.
s-retailing Conducting purchase transactions through a social media site. Also
called social retailing.
vending machine A nonstore format in which merchandise or services are
stored in a machine and dispensed to customers when they deposit cash or
use a credit card.

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Appendix of Image Long
Descriptions
 Appendix 1 Exhibit 3-1 Progression from Single-
Channel to Omnichannel Retailing
Retailers start out as a single-channel retailer with a retail
store and then move to a multichannel retailer by selling on
the Internet and at the store. The retailer can then use
cross-channel retailing when customers use multiple
channels to make purchases. Finally, a retailer can use
omnichannel retailing by using all of the shopping channels
to provide a synchronized customer experience.

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 Appendix 2 EXHIBIT 3-2 U.S. Retail Sales by
Type of Retailing
A pie chart displays the percentage of retail sales by type of
retailing in the United States. The pie chart breaks down
as: store 89 percent; Internet Retailing 5.65 percent;
Mobile Retailing 1.85 percent; Catalog/Other 3.5
percent.

Return to original slide

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 Appendix 3 EXHIBIT 3-3 Benefits Provided by
Major Channels
Store benefits: touch and smell of products; personal
service; risk reduction; immediate gratification;
entertainment and social experience; browsing; cash
payment.
Internet Retailing benefits: deeper and broader selection;
more information for evaluating merchandise;
personalization; expanded market presence; information to
improve shopping experience across channels.

Return to original slide

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