Offline Retailing and B2C ECommerce

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Chapter 18

• Offline Retailing and B2C E-Commerce

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Chapter Objectives_1

• Define retailing and understand how retailing
  evolves
• Describe how retailers are classified
• Understand the importance of store image to a
  retail positioning strategy and explain how a
  retailer can create an image in the marketplace

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Chapter Objectives_2

• Describe direct selling and automatic vending,
  two forms of nonstore retailing
• Describe B2C e-commerce, its benefits,
  limitations, and future promise

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Retailing

• Final stop on the distribution path
• The process by which products are sold to
  consumers for personal use
• Retailers add value with image, inventory,
  service quality, location, and pricing policies

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The Wheel of Retailing

• New types of retailers find it easiest to enter
  the market by offering goods at lower prices than
  competitors after they gain a foothold, they
  gradually trade up, improving facilities and
  increasing the quality and assortment of
  merchandise, and offering special amenities
  upscaling increases costs causing prices to rise
  higher prices open the door for a new entrant
  charging lower prices

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Retail Life Cycle

• Retailers are also products because they provide
  benefits and must offer a competitive advantage
  to survive
• Introduction
• Growth
• Maturity
• Decline

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Factors Affecting the Future of Retailing

• Demographics
• Technology
• Globalization

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Major Demographic Factors

• Convenience for working women
• Catering to specific age segments
• Recognizing ethnic diversity

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Classifying Retailers by What They Sell

• All retailers are classified by the NAICS codes
• Some lines still blurred
• scrambled merchandising - strategy of carrying a
  combination of food and nonfood items

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Classifying Retailers by Level of Service

• Self-service retailers
• Full-service retailers
• Limited-service retailers

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Classifying Retailers by Merchandise Selection

• Merchandise breadth
• Narrow versus Broad assortments
• Merchandise depth
• Shallow versus Deep assortments

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Store Types

• Convenience stores
• Supermarkets
• Specialty stores
• Department stores
• Hypermarket stores

• Discount stores
• General merchandise discount stores
• Off-price retailers
• Warehouse clubs
• Factory outlet store

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Nonstore Retailing

• Any method a firm uses to complete an exchange
  that does not require a customer visit to a store
• Direct selling
• Automatic vending

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Direct Selling

• Direct selling occurs when a salesperson presents
  a product to one individual or a small group,
  takes orders, and delivers the merchandise
• Door-to-Door Sales
• Parties and Networks
• party plan systems
• multilevel pyramid schemes

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Automatic Vending

• Appealing for selling convenience goods because
  of small space required, and minimal personnel to
  maintain and operate
• French fries
• Software
• Levis jeans

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B2C E-Commerce

• Online exchange between companies and individual
  consumers

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E-Commerce and the Customer

• Benefits
• Shop 24/7
• Less travel
• More choices
• More information
• Price competition
• Fast delivery

• Limitations
• Lack of security
• Fraud
• Cant touch items
• Hard to distinguish color/ texture online
• Expensive to return

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E-Commerce and the Marketer

• Limitations
• Lack of security
• Must maintain site
• Price competition
• Conflicts with conventional retailers
• Legal issues not resolved

• Benefits
• The world is your marketplace
• Decreases costs
• Very specialized businesses
• Real-time pricing
• Tracking of consumer behavior

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Developing a Store Positioning Strategy

• Store image
• Atmospherics

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Store Design Setting the Stage

• Store layout and traffic flow
• Fixture type and merchandise density
• The sound of music
• Color and lighting
• The Actors Store Personnel
• Pricing policy

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Building the Theater Store Location

• Types of Locations
• Site Selection
• Location planners evaluate trade area and conduct
  site evaluation