Multichannel Retailing

CHAPTER 3: MULTICHANNEL RETAILING
Comayas, Jennifer P.
Ramasasa, Rona L.
Tuazon, Jasmine E.
MULTI-CHANNEL RETAILING
Retail Channel - is the way retailers sell and deliver merchandise and services to their
customers.
Multichannel Retailing (Omni retailing) - refers to a coordinated multichannel retail

offering that provides a seamless customer experience when using all the retailer's shopping
channels.
• Non-store Retail Channel - the selling of goods and services outside the confines of
a retail facility.
NONSTORE RETAIL CHANNEL
• Internet Retailing Channels - Electronic and Mobile Retailing- internet retailing is

the fastest growing channel and mobile retailing is a term used to describe shopping
or purchasing using smartphones.
• Catalog Channel- is the retail offering communicated to the customer through a

catalog mailed to the customer.
DIRECT-RESPONSE TV CHANNEL
• Direct Response TV Channel- a retail channel in which customers watch a TV

advertisement demonstrating merchandise and place orders for that merchandise.
Two Types of Direct Response TV Channels
1. Short Form- DRVC commercial that is min or less in length.
2. Long Form (infomercial)- is DRVC commercial longer than 2 mins to 60 mins.
TELEVISION HOME SHOPPING CHANNEL
• Television Home Shopping Channel- which is watching a TV network with a

program.
• Direct Selling- is a retail channel in which salespeople interact with customers face
to face in a convenient location, either at the customer's home or at work.
2 SPECIAL TYPE OF DIRECT SELLING
1. Party Plan – salespeople encourage customers to act as hosts and invite friends and
coworkers to a party. At the party, the merchandise is demonstrated and attendees
place orders.
2. Multilevel system - independent businesspeople serve as master distributors,

recruiting other people to become distributors in their network.
Pyramid scheme - firms and their programs are designed to sell merchandise and
services to other distributors, rather than end-users.
AUTOMATED RETAILING (VENDING MACHINES) CHANNEL
Automated retailing - merchandise or services are stored in a machine and dispensed to

customers when they deposit cash or use a credit card.
RELATIVE BENEFITS OF RETAIL CHANNELS
Store Channel – offers several benefits to customers that they cannot get when they shop
through nonstore channels such as mobile, electronic, or catalogs.
Touching and feeling products – customers can use all five senses touching, smelling,
tasting, seeing, and hearing when examining and evaluating products.
Personal Service - Although consumers are often critical of the personal service they get in
stores, sales associates still have the unique ability to provide meaningful, personalized
information.
Risk Reduction - The physical presence of the store reduces perceived risk and increases
customers' confidence that any problems with a purchase will be corrected.
Immediate Gratification - Customers can use merchandise immediately after they buy it in
stores.
Entertainment and Social Experience In-store shopping can be a stimulating experience

for some people, providing a break in their daily routine and enabling them to interact with
friends.
Browsing Shoppers often have only a general ger sense of what they want (e.g., a sweater,
something for dinner, a gift) but don't know the specific item they want, so they go to a store
to see what is available before they decide what to buy.
Cash Payment Stores are the only channel through which consumers can make cash
payments.
Catalog Channel - catalogs continue to have some unique advantages over other nonstore
formats.
THE INTERNET CHANNEL
1. internet channels have the potential to offer a greater selection of products.
2. allow retailers to provide more information.
3. enable retailers to provide customers with more personalized information about

products and services.
4. offer sellers the unique opportunity to collect information about consumer shopping.
5. provide an opportunity for retailers to enter new markets economically.
6. provide information that they can use to improve the shopping experience across all
channels.
Expand Market Presence
The market for customers who shop in stores is typically limited to the customers living in
proximity to those stores.
Provide Information to Improve the Shopping Experience across The Channels
It’s difficult for store-based retailers to develop extensive purchase histories of their
customers because the retailers are unable to link transactions to customers to pay cash or
use third-party credit cards.
Perceived Risk in Internet Shopping
Some consumers are concerned about buying products through Internet channels.
Comparison Of Electronic and Mobile Phone Internet Channels
Due to the rapid growth of domestic and international broadband access through
handheld devices, such as tablets and mobile phones, retailers are very interested in
developing this channel’s potential.
CHALLENGES FACING MULTICHANNEL RETAILERS
The benefits offered by the different retail channels. In this section, we describe how
retailers are using multi-channels to improve their offerings to their customers and build
competitive advantage.
Multichannel Supply Chains and Information Systems
Multichannel retailers still struggle to provide an integral shopping experience because

the various channels demand various skills, as well as unique resources.
Centralized versus Decentralized Multichannel Retailing
Each of the channels offers a unique set of benefits, the profiles of retailers’ customers
who use the different channels are not the same.
Consistent Brand Images Across Channels
Retailers need to provide consistent brand images of themselves and their private-level
merchandise across all channels.
Merchandise Assortment
Typically, different assortments are often appropriate for each channel. For example,
multichannel retailers offer a broader and deeper merchandise assortment through their
internet channels than through their store channels.
Pricing
Pricing represents another difficult decision for a multichannel retailer. Many customers
expect prices to be the same across channels.
(excluding shipping charges)
Reducing Channel Migration
An internet channel helps customers search for information about products and Prices.

Multichannel Retailing

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CHAPTER 3: MULTICHANNEL RETAILING

Multichannel Retailing (Omni retailing) - refers to a coordinated multichannel retail

NONSTORE RETAIL CHANNEL

• Internet Retailing Channels - Electronic and Mobile Retailing- internet retailing is

• Catalog Channel- is the retail offering communicated to the customer through a

• Direct Response TV Channel- a retail channel in which customers watch a TV

Two Types of Direct Response TV Channels

1. Short Form- DRVC commercial that is min or less in length.

2. Long Form (infomercial)- is DRVC commercial longer than 2 mins to 60 mins.

TELEVISION HOME SHOPPING CHANNEL

• Television Home Shopping Channel- which is watching a TV network with a

2 SPECIAL TYPE OF DIRECT SELLING

2. Multilevel system - independent businesspeople serve as master distributors,

Automated retailing - merchandise or services are stored in a machine and dispensed to

RELATIVE BENEFITS OF RETAIL CHANNELS

Entertainment and Social Experience In-store shopping can be a stimulating experience

THE INTERNET CHANNEL

1. internet channels have the potential to offer a greater selection of products.

2. allow retailers to provide more information.

3. enable retailers to provide customers with more personalized information about

5. provide an opportunity for retailers to enter new markets economically.

Expand Market Presence

Perceived Risk in Internet Shopping

Comparison Of Electronic and Mobile Phone Internet Channels

CHALLENGES FACING MULTICHANNEL RETAILERS

Multichannel Supply Chains and Information Systems

Multichannel retailers still struggle to provide an integral shopping experience because

Centralized versus Decentralized Multichannel Retailing

Consistent Brand Images Across Channels

(excluding shipping charges)

Reducing Channel Migration

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