chapter 3

multichannel
retailing
 Meet the
Reporters

ABRERA, AVILA, IVY CARULASAN, DAYAO, ALYSA SANTOS,

ARIANNA KENZO SOFIA
 LEARNING
OBJECTIVES
Be able to answer the questions:

• What are the unique customer benefi ts off ered

by the diff erent retail channels?

• Why are retailers moving toward using all three

channels to interact with customers?

• What are the key benefi ts and challenges in

providing multichannel off erings?

• How might technology aff ect the future

multichannel shopping experience?
 What is
Multichann
el
Retailing?
Reporter:
Multichannel Retailing
• a re ret a ilers t h a t s ell m erc h a n d is e o r
serv ices t h ro u gh m o re t h a n o n e
ch a n n el.
( Accord ing to the PD F )
• It is a bu sin es s a n d m a r ket in g
st ra t egy t h a t ca n h elp y o u s ell
pro du c ts o r serv ic es v ia m u lt ip le
sa les o r ret a il ch a n n els .
( Accord ing to the I nternet)
 RETAIL
CHANNEL
What is a Retail Channel?
• is the wa y a ret a iler s ells a nd deliv er s
merc ha n dis e and serv ic es to its
c ust om e r s .

• t he m os t c om m on c ha nnel us ed by
reta iler s is a ST O R E . Reta iler s a lso us e
a v a r iet y of n on s t ore c ha nnels.
DIFFERENT
RETAIL
CHANNELS
(non store channels)
 ( 1 of
DIFFERENT RETAIL CHANNELS 5)
(non store channels)

1. I nt e rne t Cha nn e l
• also c alled o n lin e re ta ilin g , e le c tro n ic
retailing , an d e- ta ilin g , is a re ta il
c h an ne l in whic h th e o ff e r in g o f
pro du c ts an d ser vic e s fo r s a le is
c o mmu nic ate d to c u s to me r s o ve r th e
In te rn et.
(Ac c o rdi ng to the P DF )
Some apps used for Internet
Selling:
 ( 2 of
DIFFERENT RETAIL CHANNELS 5)
(non store channels)
2. Ca t a log Cha n ne l
• i s a n on st ore ret ail c h an n e l i n w h i c h t h e
re t ai l o ff er i n g is c ommu n i c at e d t o c u s t o me r s
t h ro u g h a c at alog mai le d t o c u st o me r s.

• The merchandise categories with the greatest

catalog sales are drugs and beauty aids,
computers and software, clothing and
accessories, furniture and housewares, and
books, music, and magazines.
(Ac cord ing to the PDF)
 ( 3 of
DIFFERENT RETAIL CHANNELS 5)
(non store channels)
3. Di re ct S e lling
• is a retail channel in which salespeople interact
with customers face-to -face in a convenient
location, either at the customer’s home or at
work.
• t he l arge s t c at egor i e s of merchandi s e s ol d
t hrough di re c t s el l i n g are pe rs onal care (e. g. ,
c os met i c s , f ragr anc e s ) , home and f ami l y care
( e. g. , co ok i n g and k i t c h enw are ), w e l l ne s s (e .g. ,
w e i ght l o s s produc t s , v i t ami ns ), and l e i s ure and
educ at i onal i t ems (e . g. , books , v i deos , t oy s ).
(Ac c o rd i ng t o t he PD F )
 ( 1 of

Two Special Types of Direct 2)

Selling:
a. Party Plan System
• s a l e s p e o p l e e n c o u r a g e c u s to m e r s to a c t
a s h o s ts a n d i n v i t e f r i e n d s o r c o w o r ke r s to
a “ p a r ty. ” At th e p a r ty th e m e rc h a n d i s e i s
de m o n s tr a te d a n d a tt e n de e s p l a c e o rd e r s .
A p a r ty p l a n s y s te m c a n b e , b u t d o e s n o t
h a v e to b e , u s e d i n a m u l ti l e v e l n e t w o r k .
 ( 2 of

Two Special Types of Direct 2)

Selling:
b. Multilevel System
• i n dependent businesspeo pl e serve a s master
di stri bu tors, recruiti ng oth er peo pl e to beco me
di stri bu tors in thei r netw o rk. The master di stri bu to rs
ei ther buy merchandise fro m the fi rm an d resel l i t to
th ei r di stributors o r recei ve a co mmi ssi o n o n al l
merch an di se purchased by th e di stri buto rs i n thei r
n etw o rk. In additio n to sel l i ng merch an di se themsel ves,
th e ma ster distributo rs are i nvo l ved i n recru i ti ng an d
trai n i ng o ther distributo rs.

• So me mu lti level direct sel l i ng fi rms a re i l l egal l i ke

P yrami d Schemes o r wha t w e a l so kn o w as Netw o rki n g .
 ( 4 of
DIFFERENT RETAIL CHANNELS 5)
(non store channels)

4. Te le vi sio n H ome
S•ho
i t ip
s p
a ifng
orm of n on - st o re re t ai l i n g i n w h i c h
p ro d u c t s are sh ow n o n a t e l e v i si o n s c re e n
an d p re sen t ed en t h u s i as t i c al l y by an
an n o u n c er t o st imu lat e i m p u l se p u rc h as i n g
u s i n g c red i t c ard an d t e l e p h o n e .
(Ac c o rd i n g t o t h e In t e rn e t )
The three forms of TV home
shopping
a. C ab le c h anretailing:
n els dedic ated to television
sh op
• tp
e lin
e v igs i on c hanne l de di c at e d on l y for h ome s h opping
progr amme
b . In fomerc ials
• are programs , t y pically 30 t o 60 mi n u t e s l on g, t h at mix
e n t e r t ainment w it h produ c t de mon s t r at i on s an d t h e n s olic it
orde rs placed by t elephon e .

c . Direc t- respon se advertisin g

• i t i s c ons is t s of one- t o t w o - mi nu t e adv e r t i s e me n t s on
t e l e v i s i on and radio t hat de s c r i be produ c t s an d prov i de an
opport unit y for c ons ume r s t o orde r t h e m.
Example of TV Home Shopping:
(Video)
 ( 5 of
DIFFERENT RETAIL CHANNELS 5)
(non store channels)
5. Au t oma t ed Re t a i l i ng
• it is a retail channel in which merchandise or
services are stored in a machine and
dispensed to customers when they deposit
cash or use a credit card.

• Automated retailing machines, also known as

vending machines , are typically placed at
convenient, high-traffi c locations, such as in
workplaces or on university campuses. The
vast majority of automated retailing sales are
from cold beverages, candy, and snacks.
 BENEFITS
OFFERED BY
THE RETAIL
Reporter:
BENEFITS OFFERED BY
THE RETAIL
 BENEFITS
OF
MULTICHA
NNEL
Reporter:
 Overcoming the
limitations of an Existing
Format
• I ncrea sed A ssortments
• Low-Cost, Con sisten t
Execu tion
• Cu rren t I nforma tion
Benefits of Multichannel
Retailing
• Inc reasi ng Customer S ati sfac ti on
and Loy al ty
• Gai ni ng Insi g hts i nto Consum er
S hop p i ng Behav i or
• Ex p and i ng Market Presenc e
• Bui l d i ng a S trateg i c Ad v antag e
 OTHER
MULTICHAN
NEL
RETAILING
Reporter:
Which Channel Has the
Lowest
when
Costs?
• Retailers often
selling
bel ieve they incur less co sts
merchandise through an
electroni c channel compared to a ph ys i c al
store channel, as they don't have to bu i l d
and operate stores or compen sate
employees. However, these overhead cos ts
can be greater than those of operati ng
physical stores, leading to higher prices .
Will Manufacturers Bypass
Retailers and Sell Directly
to Consumers?
• Manufacturers often sell directly to consumers, bypassing retailers,
due to concerns about disintermediation. Retailers have more
expertise in distributing merchandise, providing complementary
assortments, and collecting customer information. They also offer a
broader array of products and services to solve customer problems.
Manufacturers that sell directly to consumers risk losing support
from retailers they bypass. To avoid this, many manufacturers, like
Energizer, use their websites to ensure their products are available
and then sell directly to consumers.
CHALLENGES OF
EFFECTIVE
MULTICHANNEL
RETAILING
Reporter:
Providing an Integrated
Shopping Experience
An i nte gra te d s ho p p i ng
exp e ri e nce refers to a se a ml e s s
a nd co he si ve a pp ro a ch tha t
co mb i ne s b o th o nl i ne a nd o ffl i ne
re ta i l channe l s, a l l o wi ng
cus to me rs to i nte ract wi th a
b ra nd thro ugh va ri o us
to uchp o i nts.
Providing an Integrated
Shopping Experience
Supporting M-Commerce

buying and selling of goods and services

through wireless handheld devices such
as smartphones and tablets.
Supporting M-Commerce

1. Improved customer experience

2. Increased product discovery
3. Reach a wider audience
4. Better pull of data and analytics
5. Greater engagement and
communication with
customers
 Organizing for
Multichannel Retailing
• Centralized Cus tomer
Databas e
• Brand Image
• Merchandise As sortment
• Pricing
MULTICHAN
NEL
SHOPPING
IN THE
Thank
you
and
God
bless!