Characteristics of Offline and Online Retailing Channels

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Questions and Answers

What is the main advantage of online retailers over physical stores?

Direct interaction with customers

Face-to-face selling away from fixed retail locations

Allowing people to feel and try on products

Ability to provide comparisons between products (correct)

According to Merrin-Webster, what is the definition of retailing?

Direct interaction with customers

Sale of products in a face-to-face manner away from fixed retail locations

Two-way interaction excluding traditional TV advertising

Activities involved in selling goods to ultimate consumers for personal or household consumption (correct)

How does Neslin et al. define a channel in retailing?

A customer contact point or medium through which the firm and the customer interact (correct)

Ease and speed of access to products

Two-way interaction excluding traditional TV advertising

Sale of consumer products in a face-to-face manner away from fixed retail locations

What is the main characteristic of internet retail channels?

Defined in terms of ease and speed of access Signup and view all the answers

What is the definition of direct selling channels?

The sale of a consumer product or service in a face-to-face manner away from a fixed retail location Signup and view all the answers

What are hybrid selling channels aimed at attracting?

Both segments – those who always shop online and those who always shop in stores Signup and view all the answers

What is the key reason direct selling channels remain viable?

Consumers' interest in personal interactions and low cost of forming and running these channels Signup and view all the answers

What are the challenges associated with direct selling channels?

Reliance on downstream intermediaries and individual contractors reselling at a markup Signup and view all the answers

What is the main advantage of hybrid retail channels?

Ability to reach a wider market and gain a competitive advantage Signup and view all the answers

What is a potential scenario for a retailer with a weak online presence?

The arrival of a new store might increase online sales Signup and view all the answers

What does omni channel retailing pose as a challenge?

Blurring the distinction between online and physical retailing Signup and view all the answers

What is a major constraint in online retailing according to the text?

Weight-to-value ratio for items being sold Signup and view all the answers

Why is standardised pricing across online and physical stores a potential problem?

Physical stores will need to charge more due to real estate and other costs Signup and view all the answers

What type of products are not optimal for online retailing due to shipping costs?

Low value items that weigh a lot, like concrete or rice Signup and view all the answers

Why do most companies combine stores with online selling strategies according to the text?

To gain a competitive advantage by providing more than one way for consumers to access products Signup and view all the answers

What is the reason behind direct selling channels being considered viable according to the text?

Low cost of forming and running these channels combined with consumer interest in personal interactions Signup and view all the answers

Study Notes

Retailing and Channels

The main advantage of online retailers over physical stores is their ability to offer convenience and lower prices.
Retailing is defined as selling merchandise to consumers for personal or household use.
According to Neslin et al., a channel in retailing refers to a set of institutions necessary to transfer ownership of goods from the point of production to the point of consumption.
Internet retail channels are characterized by direct interaction between the retailer and consumer, allowing for real-time feedback and personalized marketing.

Direct Selling Channels

Direct selling channels involve selling products directly to consumers through face-to-face interactions, online sales, or direct mail.
Hybrid selling channels aim to attract customers who prefer the convenience of online shopping but also value the personal touch of direct sales.
The key reason direct selling channels remain viable is the ability to build personal relationships with customers.
Challenges associated with direct selling channels include managing and motivating sales representatives, as well as high distribution costs.

Hybrid Retail Channels

Hybrid retail channels combine online and offline channels to offer customers a seamless shopping experience.
The main advantage of hybrid retail channels is their ability to provide customers with multiple buying options and a more personalized shopping experience.

Online Retailing Challenges

A retailer with a weak online presence may face a potential scenario where customers shop online but pick up products in-store, leading to lost sales.
Omni-channel retailing poses a challenge as it requires integrating multiple channels to provide a seamless shopping experience.
A major constraint in online retailing is the high cost of shipping and returns.
Standardized pricing across online and physical stores can be a problem due to differences in shipping costs and consumer behavior.

Product Limitations

Products that are not optimal for online retailing due to shipping costs include bulky, heavy, or perishable items.
Most companies combine stores with online selling strategies to provide customers with multiple buying options and to stay competitive.
Direct selling channels are considered viable due to the ability to build personal relationships with customers and provide personalized marketing.

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Description

Test your knowledge on the characteristics of offline and online retailing channels, including the differences between the two. Learn about the unique aspects of online retailing, such as product comparisons, and the advantages of in-store retailing, such as the ability to physically experience products.