Chapter 3

Multi-Channel Retailing

McGraw-Hill/Irwin
Retailing Management, 6/e Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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• Khaadi: Khaadi is a popular Pakistani fashion brand with numerous

physical stores across the country. They offer a wide range of
clothing and accessories for men, women, and children.
• ChenOne: ChenOne is a Pakistani retail brand that specializes in
home textiles and fashion apparel. They have multiple brick-and-
mortar stores in various cities in Pakistan.
• Servis: Servis is one of Pakistan's largest footwear retailers, with a
network of physical stores selling shoes for men, women, and
children.
• Naheed Supermarket: Naheed Supermarket is a well-known
grocery and household goods retail chain with several stores in
Karachi, Pakistan.
• HBL Bank: Habib Bank Limited (HBL) is one of Pakistan's largest
banks with numerous brick-and-mortar branches throughout the
country, offering banking and financial services
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• Daraz.pk: Daraz.pk is one of the largest e-commerce platforms in Pakistan, offering a wide range of 3-8
products, including electronics, fashion, beauty, and home appliances. It connects buyers and sellers,
providing a convenient online shopping experience.
• Telemart.pk: Telemart.pk is an online retail store in Pakistan that sells electronics, gadgets, fashion,
and other consumer goods. They offer a variety of products and payment options for customers.
• Yayvo.com: Yayvo.com is an online shopping website in Pakistan that offers a diverse range of
products, including electronics, fashion, home appliances, and more. It provides a platform for various
brands and sellers to showcase their products.
• Symbios.pk: Symbios.pk is an online shopping platform known for offering electronics, gadgets,
mobile phones, and computer-related products. They cater to a tech-savvy customer base.
• Shophive.com: Shophive.com is an e-commerce website that sells a wide variety of products,
including electronics, appliances, fashion items, and accessories. They focus on providing a user-
friendly online shopping experience.
• Kaymu.pk (Now Jumia): Kaymu.pk, which is now part of the Jumia Group, was an online
marketplace in Pakistan that connected buyers and sellers. It offered a range of products from
various categories.
• Foodpanda.pk: Foodpanda is an online food delivery platform in Pakistan. It allows users to order
food from local restaurants and have it delivered to their doorstep.
• Zameen.com: Zameen.com is an online real estate marketplace in Pakistan. It connects property
buyers, sellers, and renters, providing listings and information about properties.
• OLX Pakistan: OLX is an online classifieds platform in Pakistan that allows users to buy and sell
various items, including electronics, vehicles, and household goods
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• IKEA (Sweden): While IKEA is primarily known for its brick-and-mortar stores, it also
offers a comprehensive catalog that allows customers to browse and order furniture
and home goods online, with international shipping options.
• L.L.Bean (USA): L.L.Bean is a well-known American catalog retailer that specializes
in outdoor clothing and equipment. They produce seasonal catalogs that showcase
their products, and customers can order through their website.
• Williams-Sonoma (USA): Williams-Sonoma is a catalog and e-commerce retailer
that focuses on high-end kitchenware, cookware, and home furnishings. They send
out catalogs featuring their products to customers and offer online shopping.
• Victoria's Secret (USA): Victoria's Secret is a famous lingerie brand that produces
catalogs showcasing their intimate apparel and related products. Customers can
order from their catalog or shop online.
• Boden (UK): Boden is a British clothing retailer known for its stylish catalog
offerings. They produce catalogs for men, women, and children's clothing, with
international shipping options.
• Hammacher Schlemmer (USA): Hammacher Schlemmer is an American catalog
and online retailer that specializes in unique and innovative products, including
electronics, gadgets, and home good
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• Direct Selling Retailers in Pakistan:

• Herbalife Pakistan: Herbalife is a global nutrition and weight management
company that operates in Pakistan through a network of independent
distributors. These distributors sell Herbalife's products directly to
customers.
• Tupperware Pakistan: Tupperware is a well-known brand that sells kitchen
and household products through direct selling. Independent consultants in
Pakistan conduct Tupperware parties to demonstrate and sell Tupperware
products.
• Oriflame Pakistan: Oriflame is a Swedish cosmetics and skincare company
that uses direct selling as its primary distribution method in Pakistan.
Independent beauty consultants promote and sell Oriflame products.
• Forever Living Products Pakistan: Forever Living is a global wellness and
health product company with a presence in Pakistan. Independent
distributors, often referred to as "Forever Business Owners," sell a range of
aloe vera-based products
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• TV Home Shopping Retailers in Pakistan:

• Home Shopping Pakistan: Home Shopping Pakistan is one of the most
prominent TV home shopping networks in Pakistan. They broadcast 24/7
and offer a wide range of products, including electronics, fashion, beauty,
and kitchen appliances.
• QVC Pakistan: QVC is an international TV home shopping network, and
it has a presence in Pakistan. QVC Pakistan showcases various products
and allows viewers to place orders during live broadcasts.

• TV Home Shopping Retailers Abroad:

• QVC (USA): QVC is one of the largest and most well-known TV home
shopping networks in the world. It offers a wide range of products,
including fashion, jewelry, electronics, and home goods.
• HSN (Home Shopping Network) (USA): HSN is another major TV home
shopping network in the United States. It offers a variety of products,
including electronics, beauty, home decor, and more.
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• Coca-Cola (USA): Coca-Cola is a global beverage company that operates vending

machines worldwide, offering a range of carbonated and non-carbonated
beverages, including its signature Coca-Cola products.
• PepsiCo (USA): PepsiCo, another major beverage company, operates vending
machines internationally, providing a variety of PepsiCo products, such as Pepsi,
Gatorade, and snacks like chips and nuts.
• Redbox (USA): Redbox is known for its DVD and Blu-ray rental kiosks located in
various retail locations, allowing customers to rent movies and video games.
• Uniqlo (Japan): Uniqlo, a Japanese clothing retailer, has vending machines in
various locations, offering items like heattech shirts, socks, and other clothing
basics.
• Lululemon (Canada): Lululemon, a Canadian athletic apparel brand, has
experimented with vending machines that dispense workout gear like yoga pants
and athletic accessories.
• Best Buy (USA): Best Buy has experimented with vending machines in airports,
offering small electronics and accessories to travelers.
• Häagen-Dazs (Various Countries): Häagen-Dazs has deployed vending machines
in several countries, providing customers with ice cream and frozen dessert options
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Omni channel retailer

• An Omni channel retailer is a type of retail business that

provides a seamless and integrated shopping
experience for customers across multiple channels, both
online and offline. The goal of omnichannel retail is to
create a consistent and cohesive experience for
customers, regardless of how they choose to interact
with the retailer. This can include physical stores,
websites, mobile apps, social media, and more.
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• 1. Daraz (Pakistan): Daraz is one of Pakistan's largest e-commerce platforms and is owned
by the Alibaba Group. It offers customers a seamless shopping experience across its website
and mobile app, allowing them to browse and purchase a wide range of products. Daraz also
incorporates various payment options, including cash on delivery, which is popular in
Pakistan.
• 2. H&M (International): H&M, a global fashion retailer, is known for its strong omnichannel
presence. Customers can shop in physical stores, on the H&M website, and through its
mobile app. H&M offers services like in-store pickups for online orders, returns in-store for
online purchases, and even the ability to check in-store product availability through their app.
• 3. Sephora (International): Sephora, a beauty and cosmetics retailer, has successfully
implemented omnichannel strategies. They have a strong online presence, a mobile app, and
physical stores. Sephora's Beauty Insider program, for example, allows customers to earn
and redeem rewards both online and in stores, creating a seamless experience.
• 4. Khaadi (Pakistan): Khaadi is a Pakistani fashion retailer that has embraced omnichannel
retailing. Customers can shop for clothing, accessories, and home decor on its website and
mobile app. They also have the option to purchase products in-store, and Khaadi often hosts
events and promotions that bridge the online and offline shopping experiences.
• 5. Walmart (International): Walmart, a multinational retail corporation, is a notable example
of omnichannel retailing. They offer online shopping, grocery pickup and delivery, and have a
vast network of physical stores. Walmart's app and website allow customers to easily browse
products, check prices, and place orders for both in-store pickup and home delivery
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Why are Retailers Using Multiple

Channels to Interact with Customers?
• Customer Want to interact in different
ways

• Each channel offers a unique set of

benefits for Customers
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Resources Possessed by Different

Firm Types

E Only Catalog Store-Based Manufacturers

Website Systems Excellent Poor Poor Poor

Retailing Skills Poor Good/Excel Excellent Poor
Fulfillment Poor Excellent Poor Poor
Brand Reputation Poor Good/Excel Excellent Good/Excel
Assortments Good Good/Excel Excellent Poor
Customer Data Poor Excellent Good/Excel Poor
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Unique Benefits Provided by Store Channel

• Browsing
• Touch and feel products
• Personal service
• Cash payment
• Immediate gratification
(c) Brand X Pictures/PunchStock

• Entertainment and social

interaction
• Risk Reduction
Royalty-Free/CORBIS
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Benefits Provided by Catalog Channel

Convenience
Portability, easily accessible
Visual presentation
Safety

Hoby Finn/Getty Images

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Unique Benefits Provided by Internet Channel

Convenience
Safety
Broad selection
Detailed information
Personalization
The McGraw-Hill Companies, Inc./Jill Braaten, photographer

Virtual communities
Problem-solving information
More info to evaluate merchandise
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Customization Benefits
Offered By Electronic Channel

• Information Tailored to Individual

Consumers to Help Them Make
Quicker and Better Purchase
Decisions
– Fred is a Super Retail Salesperson
– Customized Information -- Side By Side
Comparisons, Full Motion Video
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Does The Electronic Channel Have

Lower Costs Than Stores?
Stores Electronic Retailers
• Bricks and Mortar, • Building,Refreshing Web
Salespeople Site
• Attracting Customers • Attracting Customers to
to Store Web Site
• Distribution Centers • Picking, Packing, Mailing
• Restocking Returned Small Orders to Home
Merchandise • Restocking Returned
Merchandise
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What People Buy Over the Internet

Travel
PC/Electronics/Toys
Books/Software
Apparel
Home & Garden
Jewelry & Watches
 What Merchandise Will Be Sold
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Successfully Through Electronic Channel?

• “Look and See” attributes vs. “Touch and Feel”
attributes (?)
• Degree to which information can be used to
predict satisfaction prior to purchase
Gifts
Services
• Might not need to “Touch and Feel”
“Touch and Feel” not useful - Gifts
Superior presentation of “Touch and Feel”
Branding
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Perceived Risks of Electronic Shopping

Don Farrall/Getty Images

Security of credit card transaction – security

problems have not arisen in actual usage

Potential privacy violations – consumers are

concerned about retailers collecting their personal
information
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When The Electronic Channel Provides

Superior Benefits
GIFTS
• Saves time
• Saves effort in packing
• Saves effort in delivery
SERVICES
• No Shipping Problems
• Examples
– Travel websites
– Banking
– Newspapers Janis Christie/Getty Images
 Resources Needed to Compete
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Effectively in Internet Retailing

• Exciting, Easy to Use Web Site

• Management Information Systems
– Order processing and status
– Customer database
– Personalization software

But These Resources Were Not Enough!

Resources Needed to Compete
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Effectively in Internet Retailing

• Retailing Skills
– Managing inventory
– Editing assortment
• Efficient Fulfillment Systems
– Significant costs - last mile
– Picking and packing individual orders
– Handling returns - reverse distribution
 Resources Needed to Compete
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Effectively in Internet Retailing

• Strong Brand Name and Image
– Build traffic
– Reduce customer perceived risk
• Complementary Merchandise
– One stop shopping
– Lower shipping costs
• Availability of Customer Information
– Tailored presentations - personalization
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Why did Electronic-only Retailers Fail?

They had skills in web design

They had skills in systems to manage transactions

• They did not have skills in brand

recognition
• They did not have skills
necessary to build consumer
trust
• They did not have skills to build
assortments, manage inventory Digital Vision/Getty Images

and fulfill small orders to homes

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Catalog Retailers can

Add Electronic Channel Easily

• Ready to take orders

• Able to pack merchandise
• Able to deliver
• Able to handle returned
merchandise
• Already have a database
• Visual merchandise for
catalog is the same for Steve Cole/Getty Images

electronic
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Store-based Retailers vs.

Electronic Retail Entrepreneurs

• Knowledge of Retailing
– Assortment Planning
– Distribution Systems
• Reputation
• Customer Database Royalty-Free/CORBIS

• Convenient Location for Picking Up, Returning

Merchandise, Warranty Service and Installation
• Vendor Relationships
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 Advantages of Retailers
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vs. Manufacturers

Distribute Merchandise Directly to Customers

Provide Assortments
Collect and Use Information about Customers

Widespread Disintermediation Unlikely

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Ecommerce Myths
• Low Cost of Entry
• Overestimate Importance of
Technology, Under Estimated Need
for Traditional Resources
• First Mover Wins
• Gets Rid of the Middleman
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Benefits of Multi-channel Retailing

• Electronic channel gives a way to

overcome limitations of existing format
• With electronic channel, retailers can
reach out to new markets
• Builds share of wallet
• E-channel enables retailers to give
insights into customers’ shopping
behaviors
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Overcoming Existing Format

Size of the store is the greatest constraint for stores

• By blending store with internet-enabled kiosks,
retailers expand assortments offered to shoppers.

Store based retailers face inconsistent execution

• Kiosks can be used by both sales associates and
customers for up-to-date product information, stock
information and price reduction on clearances.
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Percentage of Cross Channel Shoppers

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Capabilities for Multi-Channel Retailing

To effectively operate and realize the benefits of

multi-channel retailing, firms need to have skills in:
• Developing assortments and managing inventory
• Managing employees in distant locations
• Distribute merchandise efficiently from DCs to stores
• Present merchandise in catalogs
• Present merchandise on websites
• Process orders electronically
• Efficient distribution of individual orders to homes
• Operate information systems for all channels
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Capabilities for Multi-Channel Retailing

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Multi-channel Services and Features

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Issues Confronting a Multi-Channel Retailer

• Maintaining Brand Image Across

Channels
• Merchandise Assortment Offered in Each
Channel
• Pricing Across Channels
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Shopping in the Future

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Personalization Potential
Of Electronic Channel
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Integration – Key to Multi-Channel Retailing

Create a Seamless Know thy

Experience Customer
• Synchronized & • Needs and
consistent service preferences
regardless • One to One
of channel Marketing

• Call Center
• Shopping
• Ordering Advice
• Returns • Customer
• Refunds Service
Make it Easy Provide Support