Question #12

How many Internet users are
purchasing online?
55% (77% browsed/shopped)
 Vs. 51% and (75%) last year

Question #13

What is the main advantage of
being a pure-play e-tailer?


Focused and nimble
What is the main advantage of
being a multichannel e-tailer?
Brand name
 Synergies

What has Amazon done right?






Amazon simplifies shopping
Equity built with consumers is
saving Amazon with investors
Selection, competitive prices
Ease of navigating
site/convenience
Delivery speed and options
Partnerships
Multi-Channel Integration



Watch video tape
What are the 3 formats discussed?
What are the 3 models of multi-channel
integration?



2 emerging models?
What are the 2 ways multi-channel
retailers are structured?
List of group members – IC #6
Achieving Integration
Creating consumer value
 Leveraging the multi-channel
business model
 Developing new revenue streams
 Channel synchronization

Consumer Value Proposition
Risk Reduction
Stores
Catalog
Internet
Gratification
Objectivity/
credibility
Information
Trial
Pers. Service
Price
Consumer Value Proposition
Shopping Ease
Stores
Catalog
Internet
Payment
options
Impulse
Portability
Accessibility
Longevity
Selection
Intentional
Browsing
Accessibility
Convenience
Consumer Value Proposition
Shopping Experience
Stores
Catalog
Entertainment Ideas
Social
Interaction
Internet
Personalization
Uniqueness Immediacy
Community
Leveraging the Multi-Channel
Business Model
Leverage existing assets
 Overcome channel-specific
limitations
 Gain insight into cross-channel
shopping behavior

Leveraging Existing Assets

Brand name recognition
Leveraging Existing Assets
Brand name recognition
 Advertising
 Customers
 Physical assets
 Supply chain capabilities
 Service capabilities

Overcoming Channel Specific
Limitations

Stores
Space
constraints
 Inconsistent
execution

Overcoming Channel Specific
Limitations

Catalogs

High cost
Overcoming Channel Specific
Limitations

Catalogs
High cost
 Static

Overcoming Channel Specific
Limitations

Internet

Lack of visibility

Amazon, wine.com, cooking.com,
Mycashmere, Gold Violin launched
catalogs
Overcoming Channel Specific
Limitations
 Internet

Lack of credibility
Gaining Consumer Insight

Capture true demand
Gaining Consumer Insight
Capture true demand
 Cross-channel visibility
 Customer feedback

Building the Brand
$1,200
$1,051
$1,000
$800
$600
JCPenney
yearly spend
$400
$200
$0
$121
Intern
only
$194
Store only
$242
Catalog
only
Multi
Building the Brand
$1,000
$900
$900
$800
$700
$600
$500
$400
Eddie Bauer
yearly spend
$400
$300
$200
$100
$150
$0
1 Channel
2 Channels
3 Channels
New Revenue Streams
 Intensification
Current market/existing customers
 Avon, Tupperware, Walgreens


Extension
Current market/new customers
 Eddie Bauer, Sharper Image, Lands’
End – online are new
 Victoria’sSecret – men on line

New Revenue Streams

Extension
Current market/new customers
 Eddie Bauer, Sharper Image, Lands’
End

New Revenue Streams
 Expansion
Current market/new geographic
markets
 REI-Japan


Diversification
New products, services, solutions
 Eddie Bauer – Children’s
 Gap - Maternity

Channel Synchronization

Extension of a common brand
Most valuable asset
 Associated with lifestyle and
customer rather than retail format,
channel, geography, etc.

Channel Synchronization

Merchandise consistency

Limited or focused discrepancy
across channels
Channel Synchronization

Pricing

Use of flexibility
Channel Synchronization

Pricing

Use of flexibility
Channel Synchronization
 Cross Promotion
In-store catalog desk/web kiosk
 Pick up catalog in store
 Order catalog on line
 Retail store locators online/catalogs
 Advertising circular available online
 In-store signage promoting web site
and catalog

Channel Synchronization

Fulfillment
In-store pickup of online goods
 Inhouse vs outsourcing
 East of returns


Customer Relationship Management
Leverage at all customer touch points
 Data management technology
