*Chapter_13_-_Retailing_and_Multichannel_Marketing_A2L

Retailing and Multichannel Marketing Overview

• Professor Sanghwa Kim
• Focuses on value delivery through distribution channels and supply chains.

Learning Objectives

• LO1: Outline considerations for choosing retail partners.
• LO2: Identify various types of retailers available for product distribution.
• LO3: Describe components of a retail strategy building on the four Ps (Product, Price, Place, Promotion) to create consumer value.
• LO4: Identify benefits and challenges of omnichannel retailing.

Retail Partners Considerations

• Channel Structure
  • Importance of vertical integration and strong manufacturer brands.
  • Manufacturer and retailer power dynamics.
• Customer Expectations
  • Retailers' understanding of consumer preferences and behavior.

Types of Retailers

• General Merchandise Retailers:
  • Discount stores: Offer a broad variety at low prices.
  • Specialty stores: Focus on a small range of complementary products.
  • Category specialists: Deep assortment in a narrow product line.
  • Department stores: Offer a broad range of categories, organized into departments.
  • Drugstores: Specialize in health and personal care products.
  • Off-price retailers and extreme-value retailers.
• Food Retailers:
  • Conventional supermarkets: Limited non-food items, e.g., Safeway.
  • Big box food retailers: Combination of food and general merchandise, e.g., Costco.
  • Convenience stores: Limited merchandise and higher prices, e.g., 7-Eleven.

Developing a Retail Strategy

• Market Segmentation: Identify target market segments.
• Retail Mix:
  • Product: Merchandise assortment, including private-label brands.
  • Price: Competitive pricing strategies tailored to target market.
  • Promotion: Various methods for advertising retail offerings.
  • Place: Location strategies that enhance accessibility.
  • Personnel: Customer service roles integral to sales experience.
  • Presentation: Store atmosphere and displays enhance customer experience.

The Wheel of Retailing

• Describes the evolution of retail outlets.
  1. Start: Low prices, low margins, low status.
  2. Progression: Increase in prices and services as brand equity builds.
  3. Mature: Higher prices and margins, expanded service offerings.
  4. Entry of New Outlets: Introduces competition with varied offerings.

Omnichannel Retailing

• Definition: Strategy for a consistent consumer experience across channels.
• Consumers often spend more when shopping through omnichannel retailers.
• Benefits for Retailers:
  • Greater selection of products.
  • Personalized consumer information.
  • Ability to analyze and adapt to consumer shopping behaviors.
  • Entry into new markets with lower costs.

Effective Omnichannel Retailing

• Core elements include:
  • Integrated CRM: Maintain customer relationship data across channels.
  • Supply Chain Alignment: Efficient logistics to support multiple channels.
  • Brand Image Consistency: Strong branding that resonates across all platforms.
  • Pricing Strategies: Competitive pricing regime aligned with market expectations.

Critical Takeaways

• Developing a robust retail strategy requires attention to market segmentation, channel selection, customer service, and innovative promotion.
• Understanding and implementing omnichannel strategies can significantly impact consumer engagement and sales performance.