Multichannel RetailingChelsea Kjerstad

•Stores

•Catalogs

•Internet

Multichannel retailers sell merchandise or services through more than one

channel.

Stores• Browse

• Touch & feel

• Pay cash

• Instant gratification

• Personal service

• Entertainment & interaction

• Reduction in risk

Catalogs•Convenient• “magalogs”

•Safe

•Portable

Internet•Convenient

•Safe

•Personalization

•Multiple assortment

•Consumer reviews• Virtual

communities

• Brand consistency

• 3D imagery

• Providing services▫ www.rei.com/adventures

Increasing Conversion Rates A

conversion rate is the percentage

of consumers who buy a product

after viewing it

online.

Multichannel Retailing1. Offers opportunity to

overcome limitations of existing retail format

2. Reaches new markets3. Builds “share of wallet”4. Enables insight into

consumers’ shopping behavior

Overcoming Existing Format•Size of store & assortments

offered

•Inconsistent execution

•Catalog limitations

Increasing Share of Wallet

Share of wallet is the percentage

of total purchases made by a customer from that retailer.

Store

Web site

Catalog

5%19% 43

%

16%

11%

6%

Percentage indicates proportion of customers browsing in one channel and purchasing in another.

Effective Operation1. Develop assortments & manage inventory

2. Manage store operations & employees

3. Distribute merchandise & accept returns effectively

4. Undertake nonstore retail activities

5. Process orders electronically

6. Provide seamless customer experience across channels

DisintermediationManufacturer selling directly to

consumers

Manufacturer

Consumer

Retailer

Multichannel Issues•Technology upgrades

•Brand image

•Pricing

•Shopping experience

•Assortment & consumer expectations