Chapter sixteen retailing and omnichannel marketing 1
Retailing and Omnichannel Marketing LO 16-1 Discuss the four factors manufacturers should consider as they develop their strategy for working with retailers. LO 16-2 Outline the considerations associated with choosing retail partners. LO 16-3 List the three levels of distribution intensity. LO 16-4 Describe the various types of retailers. LO 16-5 Describe the components of a retail strategy. LO 16-6 Identify the benefits of stores. LO 16-7 Identify the benefits of omnichannel retailing. LO 16-8 Detail the challenges of omnichannel retailing 2
H&M 3
Factors for Establishing a Relationship with Retailers Choosing retailing partners Identifying types of Retailers Developing a retail strategy Managing a omnichannel strategy 4
Choosing Retail Partners Channel Structure Degree of vertical integration Manufacturers brand Power of manufacturer and retailer M Hruby 5
Choosing Retail Partners Customer Expectations 6
Choosing Retail Partners Channel Member Characteristics Larger firms Less likely to use supply chain intermediaries Can gain more control, be more efficient, and save money. 7
Susan Van Etten/PhotoEdit Jeff Greenberg/PhotoEdit Choosing Retail Partners Distribution Intensity Intensive Exclusive Selective 8
Distribution Intensity Why might Birkenstock choose an exclusive distribution intensity? Courtesy Birkenstock USA 9
check yourself 1.What issues should manufacturers consider when choosing retail partners? 2.What is the difference between intensive, exclusive, and selective levels of distribution intensity? 10
Types of Retailers 11
Food Retailers Supermarket Supercenter Warehouse Club Convenience Store Limited nonfood Includes discount store Limited assortment Limited variety Differentiates different types of foods Walmart, Meijer, K-Mart, Target Little service Includes: Costco, Sams, BJ s Good locations Peapod 12
General Merchandise Retailers Department Stores Broad variety and deep assortment Full-line Discount Broad variety at low prices Specialty Limited merchandise with service in small store Drugstores Specialty for pharmaceutical and heath Category Specialist Discount with narrow but deep assortment Extreme value Full line, limited, very low prices Off-Price Inconsistent assortment of brand name at low prices 13
Services Retailers Firms that primarily sell services rather than merchandise are a large and growing part of the retail industry Ryan McVay/Getty Images 14
check yourself 1.What strategies distinguish the different types of food retailers? 2.What strategies distinguish the different types of general merchandise retailers? 3.Are organizations that provide services to consumers retailers? 15
Developing a Retail Strategy Using the Four Ps: Product AP Photo/David Kohl Providing the right mix of merchandise and services 16
Price Price defines the value of both the merchandise and the service provided Courtesy DDB - London 17
Courtesy Bass Pro Shops AP Photo/MarkHumphrey Promotion Retailers use a wide variety of promotions, both within their retail environment and through mass media 18
Place M Hruby Convenience is a key ingredient to success The McGraw-Hill Companies, Inc/ Jill Braaten, photographer 19
Benefits of Stores for Consumers Browsing Touching and Feeling Personal Service Cash and Credit Entertainment and Social Interaction Instant Gratification Risk Reduction 20
Benefits of the Internet and Omnichannel Retailing Deeper and Broader Selection Personalization Gain Insights into Consumer Shopping Behavior Increase Customer Satisfaction and Loyalty Expand Market Presence 21
Effective Omnichannel Retailing Integrated CRM Brand Image Pricing Supply Chain 22
check yourself 1.What are the components of a retail strategy? 2.What are the advantages of traditional stores versus Internet-only stores? 3.What challenges do retailers face when marketing their products through multiple channels? 23