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CHAPTER 13

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CHAPTER 13

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  1. CHAPTER 13 PRODUCT MANAGEMENT IN NON-STORE RETIALING

  2. LEARNING OBJECTIVES • Highlight differences between store and non-store retail product management • Explore implications for assortment planning, product presentation, pricing and stock management imposed by non-store retailing • appreciate the need for good customer service and an efficient infrastructure to support non-store product management • Understand the concept of multi-channel retailing and its implications for RPM

  3. NON-STORE IMPICATIONS:PRODUCT PRESENTATION • CHALLENGES • product aesthetics not easily shown • sensory elements lost • not stimulating (especially websites) • incorporating web atmospherics (image) without slowing down navigation • OPPORTUNTIES • showing product in use / modelled • good navigability can promote related sales • customisation of offer (internet)

  4. NON-STORE IMPLICATIONS:PRODUCT ASSORTMENT • Non store retailers can add more space relatively easily and inexpensively (especially internet) • Considerations: • Who is home shopping customer and what will they buy? • Can all products be profitably delivered? • Internet shoppers generally have higher socio-economic profile • Kiosks in store can provide access to wider product range on company website

  5. NON-STORE IMPLCATIONS:THE SELLING ENVIRONMENT • Layout should be logical and product categories easy to locate • NAVIGABILITY is an important part of web-site design • Links between complementary merchandise should be built in (web-site) or clearly indicated (e.g. catalogue page number) • Design of web-site incorporates customer-retailer interaction (service experience) • Atmosphere not easy to create, but some targetted offers use artwork and effects to create unique image

  6. NON STORE IMPLICATIONS: PRICING • No stores - saves running costs • Financing credit and stock to guarantee fast delivery adds to costs • Price comparison easily carried out in home shopping (especially internet) • Difficult to justify premium prices in non-store selling environment • Consistency across different formats is an issue • Catalogues are not very flexible on price

  7. NON-STORE IMPLICATIONS:SERVICE • Store retailing has advantage of immediacy: • product information • stock position • product retrieval • Non-store retailers must provide good product information, fulfillment and delivery service • Dissatisfaction with service more difficult to detect in non-store • Some Internet retailers moving to availability details on-line • Secure payment service is important

  8. RETURNS SERVICE • Home shopping retailers have to accept high levels of product returns (around a third on average) • This needs to be accounted for in terms of • stock forecasting and financing • infrastructure for returns (reverse logistics) • flexibility across retailing formats

  9. NON-STORE IMPLICATIONS: CONVENIENCE • Home shopping avoids many inconvenient aspects of the consumer’s experience that are associated with store shopping • Home shopping only provides convenience if service promise is delivered • Retailer’s infrastructure must support product offer and (stated or assumed) service offer

  10. ORDER FULFILLMENT • Non-store retailing offers potential to operate a stock-free system. Supply chain can be geared to responding to customer orders • In reality suppliers will need commitment from retailer in order to be willing to hold stock of e.g. seasonal and own label goods • Forecasting can be improved with use of • preview catalogues • web-site trials

  11. DELIVERY • Early Internet successes were based on products that were easy to understand and easy to deliver (books, CDs etc.) • Delivery of more complex product needs to be reliable and reflect retailer’s image • Internet retailer’s customers are time-poor and so delivery arrangements must be customer focused and accurate • Tracking and pro-active order management software can be used to manage deliveries

  12. MULTI-CHANNEL RETAILING • Challenges and opportunities: • cross-shopping • transfer of positive and negative image • price consistency • cost allocation and performance monitoring • sales cannibalisation • marketing