RETAIL MANAGEMENT CHAPTER 3
Retail Channel - defines the way a retailer sells and delivers merchandise and services to its
customers.
Channel - involves the opportunity to complete a transaction — to sell and deliver merchandise
Medium - is primarily used to communicate information to consumers.
Single-Channel Retailing - is when retailers sell and deliver merchandise and services to their
customers through only one channel.
Multichannel Retailing - is when retailers offer more than one channel to sell and deliver
merchandise and services to consumers.
Cross-Channel Retailing - customers actually use multiple channels to make purchases, such
as when they receive an e-mailed coupon, download it onto their smartphone, and then go to a
brick-and-mortar store to redeem the coupon and buy the product.
Omni Channel Retailing - refers to a coordinated multichannel retail offering that provides a
seamless and synchronized customer experience, using all of the retailer’s shopping channels.
Relative Strengths of Retail Channels
In-Store Retailing
Touch and Smell of Products - perhaps the greatest benefit offered by stores is the opportunity
for customers to use all five senses–touching, smelling, tasting, see-ing, 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.
Cash Payment Stores - are the only channel through which consumers can make cash
payments.
Internet Retailing - involves retailers interacting with consumers via the Internet, whether they
use a traditional computer or a laptop, a variety of sizes of tablets, or a smartphone.
Mobile Channel (also called Mobile Retailing, Mobile Commerce or M-Commerce) - implies
accessing the Internet using a tablet or smartphone.
Deeper and Broader Selection - one benefit of adding Internet channels is the vast number of
alternatives retailers can make available to consumers without crowding their aisles or increasing
their square footage.
More Information for Evaluating Merchandise - an important service offered by retailers is
providing information that helps consumers make better buying deci-sions.
Personalization - due to the Internet's interactive nature. the most significant potential benefit of
Internet channels is their ability to personalize merchandise offerings and information, in an
economical way, for each customer.
Expanded Market Presence - the market for customers who shop in stores is typically limited to
consumers living in relatively close proximity to those stores.
Information to Improve Shopping Experience across Channels - it is difficult for most store-
based retailers to develop extensive purchase histories of their cus-tomers, because those
retailers cannot link individual transactions to customers who pay cash or use third-party credit
cards.
Perceived Risks in Internet Shopping - some consumers are concerned about buying products
through an Internet channel.
Mobile Retailing - due to the rapid growth of domestic and international broadband necessity
through handheld devices, such as tablets and mobile phones, retailers are very interested in
developing this channel's potential.
Social Retailing/S-Retailing - involves conducting purchase transactions through a social media
site.
Catalog and Other Nonstore Channels
Catalog Channel - is a nonstore retail channel in which the retail offering is communicated to
customers through a catalog mailed to customers.
Direct Selling – is a retail channel which salespeople interacts with customers face-to-face in a
convenient location, either at the customer’s home or at work.
Automated Retailing - is a retail channel in which merchandise or services are stored in a
machine and dispensed to customers when they deposit.
Automated Retailing Machines/Vending Machines - are typically placed at convenient, high-
traffic locations.
Challenges Facing Multichannel and Omnichannel Retailers
Consistent Brand Image across Channels - retailers need to provide a consistent brand image
of themselves and their merchandise across all channels.
Merchandise Assortment - typically, different assortments are found for each of the channels.
Pricing - represents another difficult decision for multichannel and omnichannel retailers. Many
customers expect prices to be the same across channels.
Reduction of Channel Migration - an Internet channel helps customers search for information
about products and prices.
Channel Migration - if customers gather information from one of its channels, then buy from a
channel hosted by a competitor.
Showrooming - a particularly worrisome form of channel migration.
Showrooming - occurs when a consumer goes into a store to learn about different brands and
products and then searches the Internet for the same product sold at a lower price.