Chapter 17 Slides: Outlet Selection and Purchase

Statistics related to expenditure of individuals drawn to a store by an advertised item

-Purchased the advertised item and 1+ additional items: 34% -Purchased only the advertised item: 26% -Did not purchase the advertised item but purchased one or more other items: 21% -Did not purchase anything: 19%

Aspects of a store atmosphere:

1. Ambient conditions: temperature, air quality, noise, music, odor 2. Physical conditions: layout, equipment, colors, furnishings, space 3. Social conditions: customer characteristics, # of customers, sales force characteristics 4. Symbols: signs, POP displays, decor style

Consumers shop online for reasons similar to those for shopping from catalogs:

1. Convenience (67% online vs 62% catalog) 2. Price (41% online vs 40% catalog) 3. Unique merchandise (33% online vs 40% catalog) 4. Past experience with company (28% online vs 39% catalog) 4. Wanted product delivered (16% online vs 31% catalog) 5. No time to go to store (13% online vs 17% catalog) 6. Recommendation from a friend (7% online vs 7% catalog) 7. Impulse (4% online vs 5% catalog)

What are some examples of price reductions and promotional deals?

1. Coupons 2. Multiple-item discounts 3. Gifts

What are the strengths of Internet retailing?

1. Deeper and broader selection 2. More information for evaluating merchandise 3. Personalization (eg Live chats) 4. Expanded market presence 5. Information to improve shopping experience across channels: customized mkt info

What qualities do omni-channel shoppers possess?

1. Digital savvy, with heavy reliance on mobile shopping apps. 2. Younger Gen Yers, upscale and tech savvy Gen X and older Gen Y 3. Spend 15%-30% more with a retailer than multi-channel shoppers!

What are challenges for multichannel and omnichannel retailers?

1. Have a consistent brand image across channels 2. Merchandise assortment 3. Price Discrimination

How can a multichannel and omnichannel retailers have effective merchandise assortments?

1. Internet channel offers broader, deeper merchandise assortment 2. Store channel better suited for "touch-and-feel" products 3. Internet channel is as effective as store channel for "look-and-see" product

A recent study found the following reasons among those who are online who have never made a purchase:

1. Lack of touch (36%) 2. Don't want to give financial information (32%) 3. Delivery costs too high (29%) 4. Returns will be a hassle (26%) 5. Prefer to research online, buy offline (24%) 6. Feel no need to buy online (23%) 7. Can't speak to sales assistant online (14%)

Mobile marketing is clearly seen as next horizon for marketers for in the following ways:

1. Local mobile search is changing how consumers find stores and brands within stores 2. Mobile apps increasingly play role in how consumers shop, find the best deals, etc.

For the outlet image for a bricks and mortar store, what are the dimensions (and corresponding components)?

1. Merchandise: quality, selection , style, and price 2. Service: Layaway plan, sales personnel, easy return, credit and delivery 3. Clientele: customers 4. Physical features: cleanliness, store layout, shopping ease, and attractiveness 5. Convenience: location and parking 6. Promotion: Advertising 7. Store atmosphere: congeniality, fun, excitement, and comfort 8. Institutional: store reputation 9. Post-transaction: satisfaction

What are opportunities for multichannel and omnichannel retailers?

1. Multiple channels to build competitive advantage 2. Consumers want to be recognized while they use various channels (those consumers want to feel valued) 3. Using various channels synergistically 4. Retailers can use channels to stimulate store visits and reduce cost (process returns and pickup in store), such as using location settings

Retail outlet selection involves a comparison of the alternative outlets on consumer's evaluative criteria:

1. Outlet Image: a given consumer's or target market's perception of all the attributes associated with a retail outlet 2. Retailer Brands 3. Retail Advertising 4. Outlet Location and Size: all else equal, consumers choose the closest location

Two consumer characteristics that are particularly relevant to store choice:

1. Perceived Risk- social, financial*, time*, effort*, and physical costs (*=economic risk) 2. Shopping Orientation: a shopping style that puts emphasis on certain activities or shopping motivations (Consumers go shopping for many reasons, including exercise, breaking routines, social interaction, learning new trends, etc.)

Strategies used by manufacturers and retailers to influence in-store and online decisions:

1. Point-Of-Purchase 2. Materials 3. Price Reductions and Promotional Deals 3. Outlet Atmosphere 4. Stockouts 5. Website Functioning and Requirements 6. Mobile Apps 7. Sales Personnel

How can multichannel and omnichannel retailers have effective price discrimination?

1. Retailers adjust prices based on competition in different channels/regions (cannot blatantly price discriminate, companies find creative/sneaky ways to get around it) 2. Customers feel it is cheaper online (usually cheaper)- Method of (legal?) price discrimination (online prices compared to in-store prices)

Individual characteristics of an outlet atmosphere:

1. Sales personnel: career objectives, training, personal situation, social class, and stage in Household Life Cycle (HLC) 2. Consumers: lifestyle, shopping orientation, stage in HLC, and situation

The following are the results of a Roper survey asking consumers why they don't like shopping in stores:

1. Salespeople are poorly informed (74%) 2. Waiting in long lines (73%) 3. Hard time finding things (64%) 4. Parking and traffic (64%) 5. Dealing with crowds (58%) 6. Hard time to get someone to wait on you (54%) 7. The time to takes to shop (38%) 8. Don't like shopping (34%)

Reasons to browse items online but not make final purchase

1. Shipping and handling costs are too high (44%) 2. Not ready to make the purchase (41%) 3. Wanted to compare process on other sites (27%) 4. Product price higher than willing to pay (25%) 5. Wanted to save products in cart for later consideration (24%)

Stockouts affect a consumer's purchase decision due to perceived costs to the consumer. The types of perceived costs :

1. Substitution costs: reduction in satisfaction 2. Transaction costs: mental, physical, and time costs of switching (options: go to another store, delay purchase, or not purchase at all) 3. Opportunity costs: reduced satisfaction with foregoing or reducing consumption

Relative Strengths of In-Store Retailing:

1. Touch and smell of products 2. Personal service 3. Risk reduction 4. Immediate gratification 5. Entertainment and social experience 6. Cash payment (if don't want to use a credit card or don't have one)

For the outlet image for an online channel, what are the dimensions (and corresponding components)?

1. Usefulness: good product offers and info, value aligned with interests 2. Enjoyment: fun, attractive, pleasant to browse 3. Ease of use: easy to use and navigate, flexible site 4. Trustworthiness: reputation, info stuffy and security 5. Style: helpful, friendly, knowledgable, calm 6. Familiarity: advertising online and offline, general familiarity 7. Settlement: fast and flexible delivery and transactions

Aspects of Response in an outlet atmosphere

1. sales personnel: mood, effort, commitment, attitude, knowledge, skill 2. Consumers: enjoyment, time in store, items examined, information acquired, purchases, satisfaction

The effectiveness of sales efforts is influenced by the interaction of:

1. the salesperson's knowledge, skill, and authority 2. the nature of the customer's buying task 3. the customer-salesperson relationship

What are the shopping orientation segments?

1.Apathetic (16%): no particular motive and are "indifferent toward shopping" 2. Enthusiastic (22%): motivated by many aspects and get entertainment value from shopping 3. Destination (21%): motivated by anticipated utility of obtaining brands to enhance their image 4. Basic (22%): want to get exactly what they want in minimal amount of time 5. Bargain (20%): motivated by perceived role of getting a good deal (market mavens= want to be known for getting a good deal)

What is the retail attraction model (a.k.a. retail gravitation model)?

A model that is used to calculate the level of store attraction based on store size and distance from the consumer

What are multi-channel shoppers?

Consumers who browse and/or purchase in more than one channel.

____ and ____ play an important role in store choice

Location; size

What are avatars?

Online sales clerks that interact with customers as they shop on their website.

What are the drawbacks of Internet retailing?

Perceived risks in Internet shopping (eg product not as expected; must give personal financial info)

What are spillover sales?

Sales of additional items to customers who came to purchase an advertised item. (In the study on expenditure of individuals drawn to a store by an advertised item, expenditure of individuals drawn to a store by an advertised item)

______ are closely related to store image, and at the extreme, the store or outlet is the brand

Store brands

In-store shopping is perceived as neither fun nor efficient by many. Retailers are trying to enhance the experiential component and _______ through layout, music, personal shoppers, etc.

add value

All else qual, consumers generally select the _____ store.

closest

All channels should present a _______ image and each channel ________ the image

consistent; reinforces

What are omni-channel shoppers?

consumers who browse and/or purchase in more than one channel simultaneously

Advertising is important, but important to know that might not get _____

desired result

The key to success of store brands-- ______at a ______. (must provide equal quality to brand product for lower price than brand product)

high quality; reasonable price

Generally, customers prefer ____ outlets over ____ outlets

larger; smaller

This approach can take _____ ______ and can be successful for a number of reasons, such as a regional in-store retail utilizing online to become national/international in scope.

many forms

The ___ channels, the ___. Shoppers who interact with retailers on 4+ channels spend 9% more in stores or on average, compared with those who use fewer channels or just a single one.

more; better

Most retailers utilize _______ retail channels, such as physical stores, Internet, catalogs, etc.

multiple

Although the number of Internet users is not growing rapidly (3% annual growth since most US adults are already online), there is growth in _____ at +12% annually

online sales

Traditionally, retailers carried only manufacturers' brands, and only a few, such as Sears and Wards, developed their ____ ______.

own brands

Price reductions and promotional deals are generally accompanied by the use of some __________ materials.

point-of-purchase (POP)

Increasingly retailers such as Walmart and Target are developing and promoting high-quality brands with either the _______ or an ________.

store's name; independent name