1. Web, Nonstore-Based, and Other Forms of Nontraditional Retailing
Chapter 6
Web, Nonstore-Based, and Other Forms of Nontraditional Retailing
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH
11th Edition
BERMAN EVANS
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2. Chapter Objectives
To contrast single-channel and multi-channel retailing
To look at the characteristics of the three major retail institutions involved with nonstore-based strategy mixes: direct marketing, direct selling, and vending machines – with an emphasis on direct marketing 2
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3. Chapter Objectives (cont.)
To explore the emergence of electronic retailing through the World Wide Web
To discuss two other nontraditional forms of retailing: video kiosks and airport retailing 3
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4. Figure 6-1a: Approaches to Retailing Channels4
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5. Figure 6-1b: Approaches to Retailing Channels5
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6. Nonstore Retailing Retailing strategy that is not store-based
Exceeds $410 billion annually
80% comes from direct marketing
Web-based retailing is the fastest- growing area
Web retailing expected to reach $180 annually as of 2012 6
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7. Nontraditional Retailing
Nontraditional retailing also includes formats that do not fit into store and nonstore-based categories:
Video kiosks
Airport retailing 7
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8. Direct Marketing
Customer is initially exposed to a good or service through a non-personal medium and then orders by mail, phone, fax, or computer
Annual U.S. sales exceed $325 billion (including the Web)
Other leading countries include
Japan
Germany
Great Britain
France
Italy 8
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9. Characteristics of Direct Marketing Customers
Married
Upper middle class
35-50 years old
Desire convenience, unique items, good prices
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10. 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 10
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11. Strategic Business Limitations of Direct Marketing
Products often cannot be examined prior to purchase
Costs may be underestimated
Response rates to catalogs under 10%
Clutter exists
Long lead time required
Industry reputation sometimes negative 11
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12. Data-Base Retailing
Collection, storage, and usage of relevant customer information
name
address
background
shopping interests
purchase behavior
Observation of rule 12
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13. Emerging Trends Evolving activities Changing customer lifestyles
Increasing competition
Increasing usage of dual distribution channels
Changing media roles, technological advances, and global penetration 13
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14. Selection Factors by Customers
Company reputation and image
Ability to shop whenever consumer wants
Types of goods and services
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 14
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15. Figure 6-4: Executing a Direct Marketing Strategy15
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16. 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 16 16

17. Outcome Measures Overall response rate Average purchase amount
Sales volume by product category
Value of list brokers 17
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18. Direct Selling
Direct selling includes personal contact with consumers in their homes (and other nonstore locations such as offices) and phone solicitations initiated by retailer.
Annual sales of $31 billion in the U.S., where 15 million people are employed (more than 80 percent part-time).
Annual foreign revenues of $85 billion, generated by 48 million salespeople. 18
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19. Table 6-1: U.S. Direct Selling Industry19

20. Vending Machines
Vending machines are a cash- or card-operated retailing format that sells goods and services.
Eliminates the use of sales personnel and allows 24-hour sales.
Machines placed wherever convenient for consumers.
95 percent of the $50 billion in annual U.S. vending machine sales involve hot/cold beverages and food items. 20
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21. Emergence of World Wide Web
The World Wide Web (Web) is a way to access information on the Internet.
People work with easy-to-use Web addresses (sites) and pages.
Web users see words, charts, pictures, and video while hearing audio.
Both “Internet” and “World Wide” Web convey the same central theme: online interactive retailing. 21
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22. 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 22
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23. The Role of the Web (cont.)
Provide customer service (e.g. )
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 23
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24. Figure 6-6: Web-Based Retail Sales Projections24 24

25. Figure 6-8: Five Stages of Developing a Retail Web Presence25
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26. Figure 6-9: Checklist of Retailer Decisions for the Web26
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27. Web Strengths Shopping Online Using the Web selection information
prices
convenience
fun
Using the Web
information
entertainment
interactive communications 27 27

28. Reasons NOT to Shop Online
Lack of trust Fear Lack of security Lack of personal communication 28
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29. 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 29
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30. Video Kiosks
A video kiosk is a freestanding, interactive, electronic computer terminal that displays products and related information.
Some kiosks are located in stores to enhance customer service; others let consumers place orders.
There are 2.2 million video kiosks in use throughout the world, nearly 1 million of which are Internet-connected. 30
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31. 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 31
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32. Figure 6-13: Airport Retailing and Starbucks32
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