SECTION II

Chapter 3
Multichannel Retailing

Copyright © 2009 by The McGraw-Hill

Companies, Inc. All rights reserved.
Questions

 What are the unique customer benefits offered by the

three major retail channels: stores, catalogs, and the
Internet?
 Why are retailers moving toward using all three channels
to interact with customers?
 What are the key benefits and challenges in providing
multichannel offerings?
 How might technology affect the future multichannel
shopping experience?

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The Multi-Channel Retailer

Steve Cole/Getty Images

Retailer

Digital Vision / Getty Images

The McGraw-Hill Companies,

3-3 Inc./Andrew Resek, photographer
Benefits from Different Channels

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Costs between Electronic Channel and
Stores?

Stores Electronic Retailers

 Distribution Centers  Building, Refreshing Web
 Bricks and Mortar Site
 Salespeople  Attracting Customers to
 Attracting Customers to Web Site
Store  Picking, Packing, Mailing
 Restocking Returned Small Orders to Home
Merchandise  Restocking Returned
Merchandise

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4 reasons the Retailers run multi-channel

Opportunity to overcome the limitations of

their primary existing format.

Can reach out to new markets

Increasing share the wallet”

Gain valuable insights into customers’

shopping behavior.
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Percentage of Cross Channel Shoppers

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What merchandise should be sold through
electronic channel?
 “Look and See” attributes vs. “Touch and Feel”
attributes
 Might not need to “Touch and Feel”
 “Touch and Feel” not useful - Gifts
 Superior presentation of “Touch and Feel”
 Branding
 Degree to which information can be used to
predict satisfaction prior to purchase
Gifts

Services

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How Can The Electronic Channel
Overcome Limitations?

Use technology to convert “touch and feel”

information into “look and see” information

3-D Imaging
Zoom Technology Technology
Live Chat increases sales
360 Degree Viewing
Virtual Models

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How to Sell Over the Internet
…and eliminate returns

 Even when retailers provide “touch and feel

information” retailers still experience 10% returns of
purchases …20% on the electronic channel.

 National brands provide a consistent experience

for customers to overcome not being able to touch
and feel.

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The McGraw-Hill Companies, Inc./Jill Braaten, photographer
Perceived Risks of Electronic Shopping

 Security of credit card

transaction
 security problems have not
arisen in actual usage
 Potential privacy violations
consumers are concerned

about retailers collecting
their personal information
 ??? Don Farrall/Getty Images

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Capabilities for Multi-Channel
Retailing
To effectively operate and realize the benefits of
multi-channel retailing, firms need to have skills in:
 Developing assortments and managing inventory
 Managing employees in distant locations
 Distribute merchandise efficiently from DCs to stores
 Present merchandise in catalogs
 Present merchandise on websites
 Process orders electronically
 Efficient distribution of individual orders to homes
 Operate information systems for all channels

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Resources Needed to Compete
Effectively in Internet Retailing
 Exciting, Easy to Use Web Site
 Management Information Systems
 Order processing and status
 Customer database
 Personalization software
 Retailing Skills
 Managing inventory
 Editing assortment
 Complementary Merchandise
 One stop shopping
 Lower shipping costs
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Resources Needed to Compete
Effectively in Internet Retailing

 Efficient distribution Systems

 Significant costs - last mile
 Picking and packing individual orders
 Handling returns - reverse distribution
 Strong Brand Name and Image
 Managing employees in distant location

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 Why did Electronic-only Retailers Fail?

They had skills in web design BUT They failed

They had skills in systems to
manage transactions

 They did not have skills in

brand recognition
 They did not have skills
necessary to build consumer
trust
 They did not have skills to
build assortments, manage
inventory and fulfill small
orders to homes
3-16 Digital Vision/Getty Images
Catalog Retailers can
Add Electronic Channel Easily?

 Ready to take orders

 Able to pack merchandise
 Able to deliver
 Able to handle returned
merchandise
 Already have a database
 Visual merchandise for Steve Cole/Getty Images

catalog is the same for

electronic
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Store-based Retailers vs.
Electronic Retailers

 Knowledge of Retailing
 Assortment Planning

 Distribution Systems

 Reputation
 Customer Database Royalty-Free/CORBIS

 Convenient Location for Picking Up, Returning

Merchandise, Warranty Service and Installation
 Vendor Relationships

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Issues in Multi-Channel Retailer

 Integrated Shopping Experience

 Maintaining Brand Image Across Channels
 Merchandise Assortment Offered in Each
Channel
 Pricing Across Channels

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Shopping in the Future

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Integration – Key to Multi-Channel Retailing

Create a Seamless Know thy

Experience Customer
• Synchronized & • Needs and
consistent service preferences
regardless • One to One
of channel Marketing

• Call Center
• Shopping
• Ordering Advice
• Returns • Customer
• Refunds Service
Make it Easy Provide Support
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Questions

1) Tại sao nhiều nhà bán lẻ điện máy tại VN

(nguyễn Kim, The gioi di dong) đã triển khai
bán hàng qua mạng nhưng doanh số bán chỉ
chiếm tỷ lệ nhỏ? Khó khăn lớn nhất của của
các nhà bán lẻ trên khi bán hàng qua internet
tại VN nằm ở vấn đề nào? Tại sao?
2) Bạn nghĩ rằng vài nhà sản xuất có thể bán trực
tiếp qua internet đến khách hàng (không qua
nhà bán lẻ) được không? Giải thích.

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