Multichannel and Omnichannel Retailing PDF

CHAPTER 3 MULTICHANNEL AND OMNICHANNEL RETAILING PRESENTED BY: RINALYN U. VILLEGAS OVERVIEW Multichannel Retailing refers to a retail strategy where businesses use multiple channels to reach customers, such as physical stores, online websites, social media, and mobile apps. Each...

CHAPTER 3 MULTICHANNEL AND OMNICHANNEL RETAILING PRESENTED BY: RINALYN U. VILLEGAS OVERVIEW Multichannel Retailing refers to a retail strategy where businesses use multiple channels to reach customers, such as physical stores, online websites, social media, and mobile apps. Each channel operates independently, with its own processes and inventory. Omnichannel Retailing takes this a step further by integrating all channels into a cohesive customer experience. In omnichannel retailing, all platforms physical stores, online shops, social media, and mobile apps are interconnected, providing a seamless and consistent shopping experience. Customers can switch between channels fluidly, such as buying online and picking up in-store, with a unified view of inventory and customer service. In essence, while multichannel focuses on having multiple touchpoints, omnichannel ensures those touchpoints are interconnected for a more synchronized and holistic customer journey.  LEARNING OBJECTIVE LO 3-1 Understand the channels used by retailers LO 3-2 Compare the relative strengths of the major retail channels: stores; Internet, mobile, and social; and catalog and other non store channels. LO 3-3 Describe the opportunities associated with a true omnichannel strategy. LO 3-4 Analyze the challenges facing multichannel and omnichannel retailers RETAIL CHANNEL defines the way a retailer sells and deliver merchandise and services to its customers. CHANNEL involves the opportunity to complete a transaction to sell and deliver merchandise. MEDIUM is primarily used to communicate information to consumers. SINGLE - CHANNEL RETAILING is when retailers sell and deliver merchandise and services to their customers through only one channel  EXHIBIT 3-1 Progression from Single- MULTI- CHANNEL RETAILING Channel to Omnichannel Retailing is when retailers offer more than one to sell and deliver merchandise and services to costumers. CROSS- CHANNEL RETAILING costumers actually use multiple channels to make purchases, such as when they received an emailed coupon, download it into their smartphone, and then go to brick and mortar store to redeem the coupon and buy the product. OMNICHANNEL RETAILING refer to a coordinated multichannel retail offering that provides a seamless and synchronized customer experience, using all of the retailer’s shopping channel. RELATIVE STRENGTHS 0F RETAIL CHANNELS 3 Types of Retail Channels or Retailing EXHIBIT 3-2 U.S. retail sales by type In-Strore Retailing of retailing Internet , Mobile Social Retailing Catalog and other non-store retailer. 1.In-Store Retailing 2.Touch and Smell of Products 3.Personal Service 4.Risk Reduction Store 89% 5.Immediate Gratification Internet Retailing 5.65% 6.Entertainment and Social Experience Mobile Retailing 1.85% 7.Cash Payment Catalog/Other 3.5%  INTERNET RETAILING MOBILE CHANNEL involves retailers interacting with consumers also called mobile retailing, mobile via the internet whether they used a commerce , or m commerce) implies traditional computer or a laptop and etc. accessing the internet using the tablet or smartphone. Advantages in Adding Internet Channels 1.The addition of internet channels has the potential 5. Internet Channels provide an opportunity for retailers to offer a greater selection of products. to enter new markets economically. 2.They allow retailers to provide more information. 6. They provide information that they can use to 3.They enable retailers to give costumers more improve the shopping experience across all channels. personalized information about products and 7.Because of the information they gather, internet services. channels also may increase consumer risk , which 4.They offer sellers the unique opportunity collect represents a potential threat that retailers must address information about consumer shopping. to ensure their competetive advantage.  DEEPER AND BROADER SELECTION one benefit of adding internet channel is the vast number of alternatives can make available to consumers without crowding their aisles for increasing their square footage. MORE INFORMATION FOR EVALUATING MERCHANDISE an important service offered by retailers is providing information that helps consumers make better buying decisions. PERSONALIZATION Due to the internets interactive nature, the most significant potential benefit of internet channels is their ability to personalize merchandise offerings and information, in an economical way, for a costumer. EXPANDED MARKET PRESENCE The market for customers who shop in stores is typically limited to consumers living in relatively close proximity to those stores. INFORMATION TO IMPROVE SHOPPING EXPERIENCE ACROSS CHANNELS it is difficult for most stored- based retailers to develop extensive purchase histories of their customers because those retailers cannot link individual transaction to customer s who pay cash or use third-party credit cards. PERCEIVED RISKS IN INTERNET SHOPPING some consumers are concerned about buying products through an internet channel. MOBILE RETAILING Due to the rapid growth of domestic and international broad access through handheld devices, such as tablets and mobile phones, retailers are very interested in developing this channel’s potential. SOCIAL RETAILING also known as s-retailing, involves conducting purchase transactions through a social media sites. CATALOG AND OTHER NONSTORE CHANNELS is a non store retail channel in which the retail offering is communicated to customers through a catalog mailed to customer. DIRECT SELLING is retail channel in which sales people interact with customers face-to-face in a convenient location, either at the customer’s home or at work. AUTOMATED RETAILING is a retail channel in which merchandise or services are stored in machine and dispensed to customers when they deposit cash or use a credit card. it is also known as vending machines, are typically placed at convenient, high traffic locations. EXHIBIT 3-3 BENEFITS PROVIDED BY MAJOR CHANNELS OPPORTUNITIES FACING MULTICHANNEL AND OMNICHANNEL RETAILERS retailer are using multiple channels to improve their offerings to their customers and build a competitive advantage. CHALLENGES FACING MULTICHANNEL AND OMNICHANNEL RETAILERS EXHIBIT 3-4 PERCENTAGE OF MULTICHANNEL RETAILER OFFERING CROSS- CHANNEL FULFILLMENT Multichannel and Omnichannel Supply Chains and Information System Multichannel and omnichannel retailers still struggle to provide and integrated shopping experience. CONSISTENT BRAND IMAGE ACROSS CHANNEL retailer need to provide a consistent brand image of themselves and their merchandise across all channel. MERCHANDISE ASSORTMENT typically, different assortment are found for each of the channel. PRICING pricing represents another difficult decision for multichannel and omnichannel retailers. REDUCTION OF CHANNEL MIGRATION an internet channel helps customer search for information about products and price. THANK YOU!