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Retail Management: Retail Channel

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15 views4 pages

Retail Management: Retail Channel

Uploaded by

ttmanh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Multichannel and Ominichannel


Retailing
Reviewed

A retail channel: the way/method/platform a retailer sells and delivers


merchandise and services to its customers.
Traditionally, the most common channel used by retailers is a store. Recently, a
variety of non-store channels include online e-commerce websites, social media
pages, mobile apps, digital and physical catalogs

Progression of retaling
Single channel: Retailers sell and deliver merchandise/
services through only one channel/method. Customers must visit in person to
make purchases. Example: local boutique only has physical store
Cross-channel: Retailers offer more than one distinct channel. These channels
operate without integration. Example: Fastfood delivery (Lotteria): the restaurant is
the one that take order make the food, but the driver is from other delivery
service.
Multichannel: to make purchases. Some degree of connectivity among the
channels. Example: Nike sells its products through its own physical stores, online
website, mobile app, and third-party retailers like department stores. Each channel
may have different promotions and inventory.
Omnichannel: coordinated multichannel provides a seamless and synchronized
customer experience. All channels operate collaboratively to ensure that the
customer is the center of the retail management processes. Example: Lotte Mart -
This supermarket chain offers an integrated shopping experience through its
physical stores and online shopping platform. Customers can shop for groceries

Multichannel and Ominichannel Retailing 1


online and choose home delivery or in-store pickup. Lotte Mart also uses loyalty
programs that work across both channels, enhancing customer engagement and
retention.

Relative strengths of retail channels

3 types of retail channel


1. In-store Retailing
Advantages: Touch and Smell of Products, Personal Service, Risk Reduction,
Immediate Gratification (right away result, don't have to wait), Cash Payment

2a. Internet Retailing


Selling on the website: tiki, Sephora
Advantages: Deeper and Broader Selection, More Information for Evaluating
Merchandise, More Personalized information about products and services,
Expanded Market Presence,
But may Perceived Risks in Internet Shopping

2b. Mobile Retailing (m-commerce)


Advantages: access retail sites from anywhere since they easily carry the devices
in their pockets, Customer - Retailer interactions can be location-sensitive.

Disadvantage: the mobile device’s smaller screen compared with a computer-


based Internet channel.

2c. Social Retailing


enables purchase transactions through a social media site.
Social media powerhouses such as Twitter, Pinterest, and Instagram have
incorporated “buy buttons” → enable users

to click on a featured post or picture to initiate a sales process (button link them to
external website)

3a. Catalog Channel

Multichannel and Ominichannel Retailing 2


Retailer communicated to customers through a physical/ digital catalog →
Consumers can place an order from almost anywhere 24/7

3b. Other Non-store Channels


Direct selling: salespeople interact with customers face-to-face in a convenient
location, providing personalized information → costly

Product categories: wellness, services, home durables, beauty and personal


care items

Automated Selling: merchandise or services are stored in a machine and


dispensed to customers when they deposit cash or use a credit card, are typically
placed at convenient, high-traffic locations (cold beverages, prepared food
service, candy, and snacks.)

Multichannel and omnichannel retailers


Opportunities:
Retailers use multiple channels to improve their offerings
for customers and build a competitive advantage.

Retailers use one channel to promote the services


offered by other channels.

Retailers can leverage their stores to lower the cost of


fulfilling orders and processing returned merchandise

Shipping charges can be waived when orders are


placed online or through the catalog then the customers
physically pick up and return merchandise at the store.

Challenges
Retailers still struggle to provide an integrated shopping for seamless
customer experience.

Provide a consistent brand image and their merchandise across all channels

Different assortments are found for each of the channels.

Multichannel and Ominichannel Retailing 3


Many customers expect the same prices across channels. But retailers need
to adjust their pricing strategy because of the competition they face in
different channels.

Customers gather information from one channel, then buy from a channel
hosted by a competitor → the retailer suffers from the frustrating problem of
Channel migration (A worrisome form of channel migration is showrooming)

Multichannel and Ominichannel Retailing 4

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