Name and student id:

Olivia Sandy (3303018011),

Nicholas.G (3303019029),
Michael Davin (3303017022)

Summary from Journal Multichannel Retailing and Omni channel retailing

Multichannel retailing is the set of activities involved in selling merchandise or

services to consumers through more than one channel. Its multimedia marketing that
typically involves the use of multiple channels to simply communicate with customer
for example: Television shopping retailers HSN and QVC now have Internet channels.
Nonetheless, while many retailers followed Sears' lead selling merchandise through
both store and non-store (catalog, direct marketing) channel
Motivations and constraints for going multichannel
Motivation:
• MC retailers are more profitable than single channel retailers in general
• MC customers are more profitable than single-channel customers
• MC shopper segments are growing while the single-channel segment is decreasing
• Motivations for retailers to operate multiple channels (improved financial performance)
• Access to new markets
• Customer satisfaction and loyalty

Constraint:
The common constraints include:
•consumer access to broadband Internet service
•operational difficulties of integration
•costs of multichannel offering.
•Creation of a strategic advantage
•Constraints for expanding to multichannel
•Broadband internet access
•Operational difficulties
•Costs of multichannel offering
Challenges in crafting multichannel strategies
Retailers face four major challenges in crafting successful multichannel strategies:
1) organizational structure;
2) data integration;
3) consumer analytics; and
4) evaluation and performance metrics

Most MC retailers use decentralized or semi-integrated organization structures.

• There is a general consensus on the need to establish centralized data warehousing
capabilities.
 • Consumer shopping and purchase behavior is increasingly MC in nature.
• Many commonly used retail performance measures don't apply to all channels or are
not comparable across channels

Opportunities for synergies across channel

Great challenges call for decisive actions. Multichannel retailers must utilize their
resources to proactively create opportunities for synergies across channels. With the
assumption that retailers will be more likely to exploit synergies if they know where to
look for them
1. Cross-channel customer communication and promotions. One of the most
common synergies is the use of one channel to promote another
2. Leveraging cross-channel information and marketing research from one channel
to improve decisions in other channels. Routinely, multichannel retailers may be
able to gather information on customers or purchase patterns in one channel to
improve sales in another
3. Cross-channel price comparisons In some cases, companies have established a
presence in multiple channels to complement the pricing strategy of the other
channels. For example, showcase stores, such as those maintained by Nike,
Sony, and Levi's have helped to establish reference prices for other channels
4. Digitization. Digitization of products such as operating manuals, bills, warranty
documents, and registrations and using the Internet to distribute and/or process
them can reduce personnel costs in all channels
5. Shared common physical assets and operations. Spreading fixed costs across
channels can create economies of scale and scope
Multichannel retail mix decisions: homogenization vs. harmonization
Homogenization is offerings in all channels, while at the other extreme is the
strategic choice made by retailers to maintain the distinct characteristics of each
channel. they have to determine the extent of harmonization for each retail mix
instrument across channels
1. Pricing: Firms have to strike a delicate balance between consumers'
expectations of prices in different channels and the cost structure of each
channel. The coordination problem across channels in determining pricing is
exacerbated when firms are structured around channels and the key decision
makers are different in each channel. This may lead to dramatically different
prices across channels as managers make independent decisions to maximize
their gains within each channel
2. Assortment and inventory management: For multichannel retailers carrying
hundreds of product categories and thousands of SKUs, harmonizing the product
assortment across channels is a complex yet strategically important decision. A
customer's channel choice is likely to depend on the breadth and depth of
assortment available in each channel
 3. Return policies: Research has shown that handling product returns is an
important component of firms' CRM strategies. Depending on the product
category, product return rates can range from 10% to 25% of the orders
4. Promotion Prior research on promotions in the context of multichannel retailing
is fairly sparse. Several studies have shown that firms can actively use
promotions as tools to encourage customers to adopt or migrate to a certain
channel

Dynamics of multichannel retailing

Multichannel retailing is an ever-evolving phenomenon. Over time, new organizational
forms may emerge as the potential benefits for new channels are realized.
“maturity model” developed by Archabal and Kalyanam that consists of the following
stages:
1. Creating presence (new channel is up and running);
2. Aligning fundamentals (basic value propositions coordinated);
3. Achieving proficiency (adept at function integration of customer processes);
4. Leveraging across channels (exploiting channel-capabilities and collaboration);
5. Optimizing operating mode (optimal resource allocation and achieving repeatable
cross-channel processes). This would be an interesting model to validate for its
potential to predict and structure multichannel strategy development and the evolutions
of synergies.

Retailers are increasingly participating in two-way virtual shopping malls/platforms

(eBay, Amazon.com) that enable them to expand channels without the same degree of
investment.

Omni Channel Retailing

Omnichannel retailing is the practice by which a variety of channels are integrated and
leveraged to influence a customer's purchase decision.The scope of multi-channel
retailing has, however, been broadened by considering issues such as the management
of customers across channels and the integration of the retail mix across channels.
More specifically, with the dawn of the mobile channel, tablets, social media, and the
integration of these new channels in online and offline retailing, the retail landscape
continues to change. The popular press is suggesting that we are moving from a multi-
channel to an omni-channel retailing model

Multi-Channel to Omni-Channel
Compared to the multi-channel phase, omni-channel thus involves more channels. An
important additional change is that the different channels become blurred as the natural
borders between channels begin to disappear. As noted, the advent of new digital and
specifically mobile channels has resulted in another disruptive change in the retail
environment. in the omni-channel phase showroom-ing is becoming an important
issue. Shoppers now frequently search for information in the store and simultaneously
search on their mobile device to get more information about offers and may find more
attractive prices
Multichannel vs Omni-channel Management
Channel focus
Channel scope
Separation of channels
Brand versus channel
customer relationship
focus
Channel management
Objectives
Multi Channel
Management
Interactive channels only
Retail channels: store,
online website, and direct
marketing (catalog)
Separate channels with no
overlap
Customer – Retail channel
focus
Per channel
Channel objectives (i.e.,
sales per channel;
experience per channel)
Omni-channel
Management
Interactive and mass-
communication channels
Retail channels: store,
online website, and direct
marketing, mobile
channels (i.e., smart
phones, tablets, apps),
social media Customer
Touchpoints (incl. mass
communication channels:
TV, Radio, Print, C2C,
etc.).
Integrated channels
providing seamless retail
experiences.
Customer – Retail channel
– Brand focus
Cross-channel objectives
Cross-channel objectives
(i.e., overall retail customer
experience, total sales
over channels)

Impact of Channels on Performance

The effect of mobile usage on customer purchase behavior is modeled by Wang,
Malthouse and Krishnamurthi (this issue).Their findings suggest that mobile channel
usage is indeed affecting shopping behavior across channels. Their results also suggest
that mobile is still most relevant in the search phase.
Shopper Behavior Across Channels
The studies on shopper behavior across channels in this special issue mainly focus on
channel choice or channel adoption and usage. Using choice models, they show that
customers tend to choose the online channel of their pre-ferred retailer first. However,
when online shopping experience increases, shoppers start to switch between the
online options of the different retailers, suggesting that online shoppers become less
loyal to their preferred retailer over time
Retail Mix Across Channels
They use technology adoption research anddiffusion theory to conceptualize a
theoretical model whereperceived service quality and perceived risk of the Internetstore
mediate the impact of online-offline channel integration