Chapter 6

Web, Nonstore-Based, and Other Forms of Nontraditional Retailing

RETAIL MANAGEMENT: A STRATEGIC APPROACH,

9th Edition BERMAN EVANS

Nonstore Retailing
Retailing strategy that is not storebased It exceeds $300 billion annually 78% comes from direct marketing Web-based retailing is fastest growing area

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Nontraditional Retailing
Nontraditional retailing also includes formats that do not fit into the store and non-store based categories: Video kiosks Airport retailing

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Direct Marketing
Customer is first exposed to a good or service through a nonpersonal medium(TV, radio, print media) and then orders by mail, phone, fax, or computer Annual U.S. sales exceed $235 billion Other leading countries include *France * Japan * Germany *Italy * Great Britain
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 Mail shopper are more likely to live in the areas away from the malls. Phone shoppers are more likely to live in the upscale metropolitan area.

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Direct Marketing Categories

GENERAL SPECIALTY

offer full lines of offer narrow product products from clothing lines to housewares J.C. Penney QVC L.L. Bean Franklin Mint

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Strategic Business Advantages of Direct Marketing

Reduced costs Lower prices Large geographic coverage Convenient to customers Ability to pinpoint customer segments Ability to eliminate sales tax for some Ability to supplement regular business without additional outlets
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Strategic Business Limitations of Direct Marketing

Products cannot be examined prior to purchase Clutter exists Long lead time required Industry reputation sometimes negative

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Database Retailing
Collection, storage, and usage of relevant customer information * name * address * background * shopping interests * purchase behavior

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Emerging Trends
Evolving activities Changing customer lifestyles Increasing competition Increasing usage of dual distribution channels Changing media roles, technological advances, and global penetration

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changing consumer life style.

Company reputation and image Ability to shop whenever consumer wants Availability of toll-free phone number or Web site for ordering Credit card acceptance Speed of promised delivery time Competitive prices Satisfaction with past purchases and good return policy

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Figure 6.4 Executing a Direct Marketing Strategy

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1)Business definition
First of all a company makes decisions regarding business definition 1)is firm going to the pure direct marketing or engages in multi channel retailing. Large product assortment specialized/services category.

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2)Generating customers
Buy a printed list from the brokers. Download from the w.w.w Send blind emails. Ads in newspapers/print media/ electronic media

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3)Media Selection
Printed catalogs Direct-mail ads and brochures Inserts with monthly credit card and other bills (statement stuffers) Freestanding displays Ads or programs in mass media Banner ads or hot links on the Web Video kiosks

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4)Presenting the message

Use of color Point out the compelling reason to purchase Prices/sizes/ packing Firm contacts /emails/phone numbers etc. 5)Customer contacts New customer/loyal/non frequent customers

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6)Customer response
They buy your products through phone, email, fax or web sites 7)Order fulfillment If delivered the product to the customer than sort out then process.payment enclosed, if delay check the shipment date etc.
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8)Outcome Measures
Overall Response Rate Average Purchase Amount Sales Volume by Product Category Value of list brokers

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vending machine
A vending machine uses coin- and cardoperated dispensing of goods and services. It eliminates salespeople, allows 24-hour sales, and may be put alomst anywheret. Beverages and food items represent 85 percent of the $40 billion in annual U.S. vending revenues.

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The Role of the Web

Project a retail presence Enhance image Generate sales Reach geographically-dispersed customers Provide information to customers Promote new products Demonstrate new product benefits
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The Role of the Web_2

Provide customer service (e.g., e-mail) Be more personal with consumers Conduct a retail business efficiently Obtain customer feedback Promote special offers Describe employment opportunities Present information to potential investors, franchisees, and the media
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Figure 6.8 Five Stages of Developing a Retail Web Presence

1. Brochure Web Site 2. Commerce Web Site

3. Integrated Web Site

4. The Webified Store 5. Site Integrated with Manufacturer Systems

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Figure 6.9 A Checklist of Retailer Decisions in Utilizing the Web

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Reasons
Using the Web information entertainment interactive communications Shopping Online selection prices convenience fun

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Reasons NOT to Shop Online

Trust Fear Lack of security Lack of personal communication

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Recommendations for Web Retailers

Develop or exploit a well-known, trustworthy retailer name Tailor the product assortment for Web shoppers Enable the shopper to click as little as possible Provide a solid search engine Use customer information
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Figure 6.12 Borders Title Sleuth Video Kiosk

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Features of Airport Retailing

Large group of prospective shoppers Captive audience Strong sales per square foot of retail space Strong sales of gift and travel items Difficulty in replenishment Longer operating hours Duty-free shopping possible
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Figure 6.13 Airport Retailing and Waldenbooks

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