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Terms in this set (49)
Luiza Helena Trajano
company's early growth came from acquisitions of small-town retailers (Sao Paulo)
mutual respect for lower & upper-income customers
used a multi-channel approach
"Magazine Voce" - the system allowed "agents" to create their own virtual Luiza store on FB with 20 products and sell these products to their friends
Retail Channel
the way a retailer sells and delivers merchandise and services to its customers
Store
Most common channel used by retailers
Variety of non-store channels retailers use
Internet, mobile, catalogs, direct mail, direct selling, television home shopping, direct-response TV, automated retailing (vending machines)
Channel
involves the opportunity to complete a transaction to sell and deliver merchandise
Medium
used to communicate information to consumers
Multi-channel Retailing
involves using more than one channel to sell and deliver merchandise and services to consumers
Omniretailing
frequently used with multi-channel retailing: refers to a coordinated multichannel retail offering that provides a seamless customer experience when using all of the retailers shopping channels
Sears
birth of multichannel retailing
Capt. Harry's Fishing example
40% of foot traffic came from foreign customers
launches catalog then Internet
almost all large retailers
operate multichannel retailers
added Internet channel that offers customers an opportunity to buy merch and services by accessing their website as well as patronizing their stores
vast majority of sales are made through
stores
Internet & catalog channels account for significant sales
Mobile channel has the highest growth rate
Internet Retailing
fastest growing channel. Involves retailers interacting with customers via the Internet
Electronic Channel
involves accessing the Internet through a traditional computer
Mobile Channel
AKA mobile retailing, mobile commerce, m-commerce
involves accessing the Internet via smartphone
Smartphone advantages
portable, smaller display, location-aware, use different touch-screen tech to access the Internet,
create a different interface experience with the user
75% / 83% of US consumers
use the Internet to search for info about a product before they go to the store
Catalog Channel
nonstore retail channel in which the retail offering is communicated to customers through a catalog mailed to consumers
1/2 of US consumers shop through this
biggest categories: drugs, beauty aids, computers, software, clothing, accessories, furniture, housewares
Direct-Response TV (DRTV)
customers watch a TV ad that demonstrates merch and then place orders for that merch
infomercial: 30 to 60 min long form that mixes entertainment with product demonstrations
short form consisting of one-to-two min. ads on tv
precisely measurable
Television home shopping
customers watch a TV network with programs that demonstrate merch and then place orders for that merch
two largest retailers that use this: HSN & QVC
adv: merch is demonstrated to inform
embracing social media
Direct Selling
retail channel in which salespeople interact with customers face-to-face in a convenient location
salespeople demonstrate merch benefits, explain service, take orders, deliver merch
highly interactive retail channel in which considerable info is conveyed to customers through F2F discussions and demo (can be costly)
buy merch and resale to customers
Direct Selling: Party Plan System
salespeople encourage customers to act as hosts and invite friends or coworkers to a "party"
hostess receives a gift or commission for hosting the party
in the party, merch is demonstrated and attendees place orders
Direct selling: Multilevel System
independent business people serve as master distributors, recruiting other people to become distributors in the network
master dist. - buy merch from firm and resell it to their distributors or receive a commission on all merch purchased by the distributor in their network
also recruit & train
Multilevel System: Illegal Pyramid Scheme
developed firm and program are designed to sell merch and services to other distributors rather than end-users
founders & initial distributors profit from inventory bought by later participants but little merch is sold to consumers who use it
Automated Retailing
Vending machines: placed at convenient, high-traffic locations
80% - cold bevs, snacks, candy, prepared food
InstyMeds Corp. - dispense presription meds
Redbox
Store Channel Benefits: Touching & Feeling Products
use all five senses when examining and evaluating products
Store Channel Benefits: Personal Service
sales associates still have the unique ability to provide meaningful, personalized info.
Store Channel Benefits: Risk Reduction
increases customers confidence that any problems with a purchase will be corrected
access customer service and get additional info on how to use a product
Store Channel Benefits: Immediate Gratification
customers can use their products immediately after purchase
can be same-day or last-minute purchase rather than waiting on shipping
Store Channel Benefits: Entertainment & Social Experience
provides a break from daily routine
enables to interact with friends
Store Channel Benefits: Browsing
customers have a general sense of what they want, not a specific item
helps customers decide what they want
Store Channel Benefits: Cash Payment
some prefer to buy with cash to avoid interest payments or excessive debt
other are concerned about security identity theft
Catalog Channel Benefits
provides safety and convenience benefits to the customer
unique advantages:
1) consumers can look and order from anywhere
2) refer to the info in s catalog by simply picking it up from coffee table
3) easier to browse through than websites
IKEA example: improved catalog with AR
how-to videos to "X-ray" photos of the inside
of storage systems
Internet Channel Benefits
improved ability to serve customers and build a competitive advantage
Internet Channel Benefits: Deeper & Broader Selection
easily "visit" and select merch from a broader array of retailers
deeper assortment of merch (colors, brands, sizes)
offer more categories
Internet Channel Benefits: More Info for Evaluating Merch
providing info that helps consumers make a better buying decision
Store: limited by sales associate knowledge
Catalog: # of pages
Internet: UNLIMITED
used to solve problems,
Internet Channel Benefits: Personalization
personalize merch offerings and info to customers
format info so that it can be effectively used
live chats: enables retailers to send a proactive chat invitation automatically to customers on site
Based on: time spent on website, specific page, product clicked
EXAMPLE: Neiman Marcus, REI, IKEA, L.L. Bean
Internet Channel Benefits: Expanded Market Presence
can expand without incurring costs of new stores or excessive catalogs
particularly attractive to retailers with strong brand names but limited locations and distribution
EXAMPLE: Amazon
Internet Channel Benefits: Provide Info to Improve Shopping Experience Across Channels
customer id and purchase history can be used to provide insight into how and why customers shop and are they satisfied or dissatisfied with their experiences
cookie: collects info about computer usage, can monitor customer views and purchases
this helps design stores or websites lay-outs , unique promotions, additional product interests
Internet Channel Benefits: Perceived Risks in Internet Shopping
security of credit card transactions is greater and there are potential privacy violations
encrypt communication
security breaches are handled fairly quickly due to retailer's reputation on the line
Comparison of Electronic and Mobile Phones
mobile channel is portable, can access Internet everywhere
location-sensitive
disadv: smaller screen, slower download speeds,
Comparison of Electronic and Mobile Phones: APPS
typically used to easily perform some specific functions available on the website but doesn't provide access to all of the functions on the website
tablets are the best trade-off between portability and navigation
EXAMPLES: Amazon, Target Anthropologie's
Challenges Facing Multichannel Retailers
Amazon: from Internet to adding stores
all want a seamless experience
consistent in the info provided
use one channel to promote another channel
Example: Best Buy
offer pick-up
& returns at store
use stores as "warehouses"
Multichannel Supply Chains and Information Systems
struggles to provide integrated shopping experience because various skills and unique resources needed
integration of both store & internet operations into one
Centralized vs. Decentralized Multichannel Retailing
critical decision: degree to which they should integrate the operations of the channels or have diff. orgs for each channel
1) complete integration: same products at same prices through same distribution for all channels
2) diff organizations manage each channel to tailor to different target markets
Consistent Brand Image across Channels
provide a consistent brand image of themselves and their private-label merchandise across all channels
examples: Patagonia, Build-A-Bear
Merchandise Assortment
multichannel: broader and deeper merch assortment through their Internet channel than their store
store channel: better to sell "touch-and-feel" attribute products
Internet: products with "look-and-see" attributes such as price, color and grams of fat
more returns on Internet channel
Pricing
many customers expect prices to be the same across all channels
retailers adjust prices bc of competition they face in different channels
multichannel retailers face difficulty sustaining regional price differences when customers can easily check prices on the Internet
Reduction of Channel Migration
Channel migration: gathers info in one of its channel and purchases elsewhere
retaining customers remains a constant challenge
showrooming: goes into a store to learn about the product then buys product online at lower price
reduce:
1) provide better customer service
2) offering uniquely relevant info based on data retailer collected on similar customers
3) promoting private-labeled merch
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Verified questions
question
a. Set up an amortization schedule for a $19,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. b. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Why do these percentages change over time?
Verified answer
question
Coastal Carolina Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by 45% with a $20 million investment in plant and machinery. The firm wants to maintain a 35% debt level in its capital structure. It also wants to maintain its past dividend policy of distributing 55% of last year’s net income. In 2016, net income was$5 million. How much external equity must Coastal Carolina seek at the beginning of 2017 to expand capacity as desired? Assume that the firm uses only debt and common equity in its capital structure.
Verified answer
question
Who are some of the basic users of financial statements, and how do they use them?
Verified answer
question
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: $$ \begin{matrix} \text{ } & \text{0} & \text{1} & \text{2} & \text{3}\\ \text{Project X} & \text{- \$ 1000} & \text{ \$ 110} & \text{- \$ 300} & \text{\$ 430}\\ \text{Project Y} & \text{- \$ 1000} & \text{\$ 1100} & \text{\$ 90} & \text{\$ 55}\\ \end{matrix} $$ The projects are equally risky, and their WACC is 11%. What is the MIRR of the project that maximizes shareholder value?
Verified answer
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