MKTG 3226 | Omni-Channel Retailing Exam Study Guide
Services Retailing
- Aging population will increase demand for health care services - Young people are spending more time on health & fitness - Busy parents are using services (ex: home cleaning, lawn, & meal prep) to balance lifestyles
Some innovative retailers/services
- Alamo Drafthouse (look @ PP) - Indochino: Suits - Melt
AMAZON vs. Wal-Mart
- Amazon is moving to brick & mortar stores, but w/ limited items - Amazon accounted for 60% of U.S. online sales growth in 2015 - Wal-Mart is looking to improve their supply chain & admin processes so more people can be on the floor - Stores need product on the shelves & people to talk to, quick check-out
Store Channel Benefits
- Browsing - Touching and feeling - Personal service - Cash payment - Entertainment and social interaction - Immediate gratification - Risk reduction related to being able to interact with the product/service and store personnel
Name the 3 Reasons why Charlotte is a prime location for being a distribution location
- Charlotte Douglass International Airport = 6th busiest in the world - Easy regional access to 4 major interstate highways (40, 77, 85, 485) - 53% of United State population is w/in 2 hrs by plane or 12 hrs by truck
NC Ports
We have good ports, but not as good as Charleston, Savannah and Norfolk. BUT we have 4 ports within 5 hours and that is unique!
Store design provides benefits by offering customers a(n) _______ and _______ shopping experience
entertaining; enjoyable
Staple (Basic) Merchandise Categories
- Continuous demand over an extended time period - Limited number of new product introductions - Hosiery, basic casual apparel - Easy to forecast demand - Continuous replenishment
Music
- Control the pace of store traffic, create an image, & attract or direct consumers' attention - A mix of classical or soothing music encourage shoppers to: - slow down, relax, and take a good look at the merchandise - thus to stay longer and purchase more
Why is Pricing Important?
- Customers are in a position to seek good value Value = perceived benefits price
Internet Channel Benefits
- Deeper and broader selection - More tools for evaluating merchandise - Personalization ---> Information is tailored to individual consumers to help them make quicker and better purchase decisions ---> Customized information -- side by side comparisons Virtual try on ---> Stored information from previous sales - Information for solving problems, not just merchandise characteristics Virtual Communities
Lighting
- Highlight merchandise - Structure space and capture a mood - Energy efficient lighting - Downplay features
Fashion Merchandise Categories
- In demand for a relatively short period of time - Continuous introductions of new products, making existing products obsolete - Athletic shoes, laptop computers, women's apparel
Integrated Marketing Communications
- Integrate a variety of communication elements to deliver a comprehensive, consistent message to all customers over time, across all elements of a retail mix & across all delivery channels - Providing a consistent image can be challenging for multichannel retailers: ---> Need to consider the needs of all channels early in the planning of its communication program
Additional Challenges of Effective Omni-channel Retailing:
- Integrated Shopping Experience: ---> Communicate with customers anytime, anywhere through multiple channels-Website, Store, Kiosks, Handheld Devices with the same images, colors, messaging ---> Integrating legacy systems for seamless customer interface is a challenge ---> Pricing issues-prices must match or be compatible across channels - Merchandise assortment?-How will it changes across channels
What's the Big Deal About Shopping on the Internet?
- Internet channels allow retailers to offer an assortment of products & provide more info to customers - Internet allows retailers to collect information about consumer shopping habits - Internet allows the retailer to enter new markets economically 81% of U.S. consumers use the Internet to search for info before they make a purchase 60% begin by using a search engine to find the products they want 61% will read product reviews.
General Trends in Retailing
- New types of retailers - Globalization - Growth in services retailing - Growth in omnishopping by traditional retailers - Increase use of technology to reduce cost; Increase value delivered
Color
- Warm colors (red, gold, yellow) produce emotional, vibrant, hot, & active responses - Cool colors (white, blue, green) have a peaceful, gentle, calming effect Culturally bounded ---> French-Canadians - respond more to warm colors ---> Anglo-Canadians - respond more to cool colors
Assortment plan
-A list of the SKUs that a retailer will offer in a merchandise category -reflects the variety & assortment that the retailer plans to offer in a merchandise category
The two types of Merchandise Management are:
1. Staple (Basic) Merchandise Categories 2. Fashion Merchandise Categories
THE LOGISTICS CONSULTING SERVICE INDUSTRY IN THE CHARLOTTE REGION IS PROJECTED TO GROW BY
3% ANNUALLY THROUGH 2022
Omni-Channel
A multichannel sales approach that provides the customer with an integrated shopping experience. The customer can be shopping: online, on a desktop, mobile device, by telephone, or in a brick & mortar store and the experience would be seamless
4 Advantages of Doing Busn in CLt
Access - central location on the East Coast - 6th busiest airport, highway access, & over 1/2 pop 2 hrs aways by plane, 12 by truck Talent - companies rely on young, talented ppl for the growing workforce - 23 colleges/Universities & 18 community colleges offering skills for all types of occupations Affordability - comprehensive tax reform in NC = one of the lowest corporate tax rates in the Nation. NC = regularly raked high in busn friendliness Quality of Life - NC = ranks high as destination city for all ages. Many newcomer each year - drawn by career opportunities, diverse living options, and a 94.7% of the National average
omni-channel approach
Accounts for each platform and device a customer will use to interact w/ the company That knowledge is then used to deliver an integrated experience. Companies using this technique align their messaging, goals, objectives, & design across each channel and device
Alamo
Alamo Drafthouse Cinema is an American cinema chain founded in 1997 in Austin Texas, USA. It's founders, Tim and Karrie League, who were driven by a simple passion for watching movies and enjoying food and beer. -Latest and greatest in projection technology - Food matching the meals shown on screen - Select Alamo locations feature a full bar with liquor - Latest and greatest in projection technology - Special events won't find anywhere else, ex: watch Jaws on the water, annual Zombie Film Festival - Deliberately low tech service model - No Ads to disrupt the film experience - Strict policy on behavior while in the theater - Zero tolerance for talking or cell phone use of any kind during movies - Entertainment Weekly (#1 theater in America), - Wired.com (Coolest Movie Theater in the World) - Fandango.com (One of the Best Theaters in the Country)
Legal Considerations
Americans with Disabilities Act (ADA) ---> Protects people w/ disabilities from discrimination in employment, transportation, public accommodations, telecommunications & activities of state & local gov't ---> Affects store design as disabled people need "reasonable access" to merchandise & services built before 1993 After 1993, stores are expected to be fully accessible
Personal Selling
Communication process in which sales associates help customers satisfy their needs through face-to-face exchanges of information
Loyalty Cards
Consumers have an average of 14 loyalty cards per person A repeat customer spends 67% more than a new one Once you lose a customer, 68% of consumers will not go back
Store design - Control Cost
Control the cost of implementing the store design & maintain the store's appearance Store design influences: - Shopping experience & thus, sales - Labor costs - Inventory shrinkage
Scent
Has a positive impact on impulse buying behavior and customer satisfaction Scents that are neutral produce better perceptions of the store than no scent Customers in scented stores think they spent less time in the store than subjects in unscented stores
Converting Good Customers into Best Customers
Customer Service: Creating a Relationship with the customer that keeps them coming back Anticipating purchases-up selling- as a way to achieve customer loyalty ---> Involves offering and selling more products & services to existing customers & increasing the retailer's share of wallet with these customer
Why are Retailers Using Multiple Channels to Interact with Customers?
Customers want what they want, when they want it Customers want new ways to engage with retailers
Some Leaders in Omni-channel
Disney- magic bands Virgin Atlantic- customized service Starbucks- on many levels of interaction (commerce, website, digital networks, mobil, my starbucks idea
Why You Should Consider Retailing?
Entry level management positions: - Department manager or assistant buyer/planner Manage and have P&L responsibility on your first job Starting pay average with great benefits Some retailers pay graduate school No two days are alike Buying and planning for financially analytically oriented Management for people-people Not sitting at a desk
Social Responsibility of Retail
Examples: Target = gives to local communities as well as through its "Bullseye Gives" program McDonald's = developing LEED-certified buildings Nike = creating shoes that score high on the sustainability index Home Depot partners with Habitat for Humanity to build houses & donate supplies
Blockchain
Innovation that is/could affect all the marketing mix It is early in this emerging technology, but it seems that the transparency in the system will help brands: build trust, decrease middlemen, increase privacy, verify supply chains, and be able to discern followers from bots, making influencers more accountable Our case study for the Bangladesh Factory collapse could be partially solved by a more robust and transparent process
Methods of Communicating with Customers
Look @ Chart ---> Direct Marketing & Personal Selling (Interactive) Direct Marketing & Advertising (Passive) Online v. Offline
Public Relations (PR)
Managing communications and relationships to achieve various objectives ---> Building and maintaining a positive image of the retailer ---> Handling or heading off unfavorable stories or events ---> Maintaining positive relationships with the media In many cases, public relations activities support other promotional efforts by generating "free" media attention & general goodwill
Distribution Channel
Manufacturing --> Wholesaler --> Retailer --> Consumer
Sensing Market Trends, Analyzing Sales Data, and Making appropriate adjustments in price & inventory levels are all examples of:
Merchandise Management
Charlotte Douglas International Airport
More than 700 daily fights to more than 150 destinations • 44 million passengers served each year • More than 150,000 tons of cargo shipped annually
Careers in Retailing
Most entry level jobs are in store mgmt or buying but also jobs in: Accounting & finance Real estate HR Mgmt Supply Chain Mgmt Advertising Public Affairs Information Syst Loss prevention Visual merchandising
Brand Alternatives
National (Manufacturer) Brands ---> Designed, produced, & marketed by a vendor & sold by many retailers Private-Label (Store, House, or Own) Brands ---> Developed by a retailer and only sold in the retailer's outlets
Challenges of Effective Omni-channel Retailing:
Omni-Channel supply chains & information systems = - Distribution strategies for integrating stores, catalog, & Internet channels are challenging - Understand that showrooming will occur and create strategies to use it to your advantage - Ex: buy online and have it sent to stores-how Target is using Supercenter space
Entrepreneurial Opportunities in Retailing
Opps for ppl who want to start their own burn - some of the world's richest people are retailing entrepreneurs. Ex: Do Won and Jin Sook Chang (Forever 21) Jeff Bezos (Amazon) Ingvar Kamprad (IKEA) Howard Schulz (Starbucks)
Merchandise Management
Process by which a retailer attempts to offer the appropriate quantity of the right merchandise, in the right place and at the right time, so that it can meet the company's financial goals Sense market trends Analyze sales data Make appropriate adjustments in prices and inventory levels
Pros & Cons of Mobile Shopping
Pros: Portable, location sensitive/messaging, push notifications, Apps Cons: Small Screen,Difficult to adapt
Social and Economic Significance of Retailing:
Retail Sales = More than 8% of the U.S GDP Employment = One of the largest sectors for job growth in US 1 out of 4 U.S. jobs are retail related 59% of all Americans have worked/work in retail Social responsibility = help in many aspects
A _________ is a business that sells products and/or services to consumers for personal or family use
Retailer
_______ Is a set of business activities that adds value to the products and services sold to consumers for their personal or family use
Retailing
Why are store-based retailers evolving into omni-channel retailers?
Sales through an electronic channel are growing while brick & mortar sales are slowing down for some Coordinating their channels means a more fluid customer experience and gives retailers a more comprehensive view of the customer Omni-channel retailers can attract more customers & satisfy existing customers better
Store design - Increase Sales on Visits
Store design has a substantial effect on which products customers buy, how long they stay in the store, and how much they spend during a visit
Top 10 Retailers of 2017
Wal-Mart, Kroger, Costco, Home Depot, CVS, Walgreens, Amazon, Target, Lowe's
Creating an Appealing Store Atmosphere:
The design of an environment through visual communications, lighting, colors, music, and scent to stimulate customers' perceptual and emotional responses and ultimately to affect their purchase behavior
Assortment (depth)
The number of SKUs within a category
Variety (breadth)
The number of different merchandising categories within a store or department
Space Management
The space within stores and on the stores' shelves are fixtures is a scare resource The allocation of store space to merchandise categories & brands The location of departments or merchandise categories in the store
Specialty Stores
Winner = Lush ( sales increasing) Loser = Bath & Body Works (sales declining)
The Changing Face of Physical Stores
Winners = Stores that provide an experience (Ex: Dollar Stores) Businesses that combine all the aspects of the customer buying journey Losers = Department & Some Specialty Stores (Ex: Sears, J.C. Penny's, K-Mart)
omni-channel user experience v. multi-channel user experience
based on depth of integration *** Multi-Channel is NOT seamless All omni-channel experiences will use multiple channels, but not all multi-channel experiences are omni-channel You can have amazing mobile marketing, engaging social media campaigns, and a well-designed website. But if they don't work together, it's not omni-channel
Store design provides________ when it enables customers to locate and purchase products in an efficient and timely manner with minimum hassle.
benefits
Product availability
defines the percentage of demand for a particular SKU that is satisfied
The primary objective of store design is:
implementing the retailer's strategy
The multi-channel experience
is what most businesses invest in today. They have a website, blog, Facebook, and Twitter, etc. & they use each platform to engage and connect with customers in most cases, the customer still lacks a seamless experience and consistent messaging across each of these channels.
Management Opportunities in Retailing
need for ppl w/ a wide range of skills & interests bc retailers' functions include: Finance Purchase Accounting MIS Supply Mgmt (including warehouse & distribution mgmt, design and new product devel)
