Chapter 6
Web, NonstoreBased, and
Other Forms of
Nontraditional
Retailing
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
10th Edition
BERMAN
EVANS
Chapter Objectives
 To contrast single-channel and multichannel retailing
 To look at the characteristics of the three
major retail institutions involved with
nonstore-based strategy mixes: direct
marketing, direct selling, and vending
machines – with an emphasis on direct
marketing
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Chapter Objectives (cont.)
To explore the emergence of electronic
retailing through the World Wide Web
To discuss two other nontraditional
forms of retailing: video kiosks and
airport retailing
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Figure 6-1a: Approaches to
Retailing Channels
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Figure 6-1b: Approaches to
Retailing Channels
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Direct Marketing
 Customer is first exposed to a good or service
through a nonpersonal medium and then orders
by mail, phone, fax, or computer (Direct mail,
Tv, radio, Magazine, News paper)
 Annual U.S. sales exceed $300 billion
 Other leading countries include
* Japan
*France
* Germany
*Italy
* Great Britain
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Characteristics of Direct
Marketing Customers
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•
•
•
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Married
Upper middle class
35-50 years old
Desire convenience,
unique items, good
prices gifts ,food,
books,
Strategic Business Advantages of
Direct Marketing
Reduced costs
Lower prices
Large geographic coverage
Convenient to customers
Ability to eliminate sales tax for some
6-8
Strategic Business Limitations
of Direct Marketing
Products cannot be examined prior to
purchase
Costs may be underestimated
Response rates to catalogs under 10%
Long lead time required
Industry reputation sometimes negative
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Data-Base Retailing: Key to
Success Direct marketing
Collection, storage, and usage of relevant
customer information
* name
* address
* background
* shopping interests
* purchase behavior
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Emerging Trends
 Evolving activities (Technology ,using Multi channel
retailing, Data base focusing )
 Changing customer lifestyles (worker women no time)
 Increasing competition ( Decreasing costs)
 Increasing usage of dual distribution channels
 Changing media roles, technological advances, and global
penetration (Catalogues & TV)
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Figure 6-4: Executing a Direct
Marketing Strategy
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Figure 6-4: Executing a Direct Marketing
Strategy
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•
•
•
•
•
•
Business definition : Pure direct marketing or in multi-channel
retailing, General products or specific products
Generating customers:
1. buying a list name of customers , download this list, send out
a blind mail for all .
2. Advertise in magazine, news paper ask to order through e-mail
,phone or fax
3. Contact consumers who have bought from the firm
Media Selection ( Catalogue ,direct mail, magazine ,news paper)
Presenting Massage: ( Includes reason of buying, data of goods
& services, price, address, phone number)
Customer contact: regular, nonregular or new
Customers response: ( Mail, Phone ,and fax), request more
information ask for catalogue, ignore massage 2 to 3% who buy
by this way
Order fulfillment
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Outcome Measures
Overall Response Rate
Average Purchase Amount
Sales Volume by Product Category
Value of List Brokers
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Direct Selling & Vending Machine
•Direct Selling: Includes both personal
contact with consumers in their homes and
offices, and phone solicitations initiated
by retailers.
•Vending machine : Is a cash or a card
retailing format that dispense goods and
services
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World Wide Web (WWW)
Electronic Retailing
 Is one way to access information on the
internet
The Role of the Web
 Project a retail presence
 Enhance image
 Generate sales
 Reach geographically-dispersed customers
 Provide information to customers
 Promote new products
 Demonstrate new product benefits
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The Role of the Web (cont.)
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


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Provide customer service (e.g., e-mail)
Be more “personal” with consumers
Conduct a retail business efficiently
Obtain customer feedback
Promote special offers
Describe employment opportunities
Present information to potential investors,
franchisees, and the media
Figure 6-8: Five Stages of Developing
a Retail Web Presence
1. Brochure Web Site: small budget ,few products
2. Commerce Web Site: Full scale selling with customers
service
3. Integrated Web Site: with inventory ,accounting system
4. The ‘Webified’ Store: Network system helps in selling
nonstore items
5. Site Integrated with Manufacturer Systems: Combine with
all information's
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Web Strengths
 Using the Web
– information
– entertainment
– interactive
communications
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 Shopping Online
– selection
– prices
– convenience
– fun
Reasons NOT to Shop Online
Trust
Fear
Lack of security
Lack of personal communication
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Recommendations for
Web Retailers
Develop or exploit a well-known, trustworthy
retailer name
Tailor the product assortment for Web
shoppers
Enable the shopper to click as little as
possible
Provide a solid search engine
Use customer information
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Features of Airport Retailing
 Large group of prospective shoppers
 Captive audience
 Strong sales per square foot of retail
space
 Strong sales of gift and travel items
 Longer operating hours
 Duty-free shopping possible
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Figure 6-13: Airport Retailing
and Borders
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