CHAPTER 17 Outlet Selection and Purchase McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc All rights reserved PART IV: CONSUMER DECISION PROCESS 17-2 Learning Objectives Describe how retailing is evolving L01 L01 Discuss the Internet and mobile as part of multi- and omni-channel shopping L02 L02 Explain the retail and consumer attributes that affect outlet selection L03 L03 Summarize the in-store and online influences on brand choice L04 L04 Understand how purchase plays a role in the shopping process L05 L05 17-3 Consumer Behavior In The News… What Are the Top Factors Driving Consumer Interest in an Apparel Retailer?      Source: D Warmath, “Get in the Game or Lose,” Advertising Age, August 25, 2008, p 15 17-4 Consumer Behavior In The News… Top Factors in Apparel Retailing Latest Trends High-Quality Products Brand Names I want Broad Selection Full Range of Services NOTE: Factors vary by category Number factor in home products is broad selection Source: D Warmath, “Get in the Game or Lose,” Advertising Age, August 25, 2008, p 15 17-5 The Evolving Retail Scene  Internet Retailing • Characteristics of Online Shoppers • Barriers to Internet Shopping  Store-based Retailing  The Internet as Part of a Multi-Channel Strategy  Mobile as Part of an Omni-Channel Strategy 17-6 Video Application The following Video Clip demonstrates how M&Ms gets personal with its multichannel strategy! 17-7 17-8 17-8 The Evolving Retail Scene Internet Retailing Internet retailing continues to evolve and grow as a strong retail channel: 17-9 The Evolving Retail Scene Consumers shop online for reasons similar to those for shopping from catalogs: 17-10 Attributes Affecting Retail Outlet Selection Outlet Image Online Image 17-22 Attributes Affecting Retail Outlet Selection Retailer Brands Store brands are closely related to store image, and at the extreme, the store or outlet is the brand Traditionally, retailers carried only manufacturers' brands, and only a few, such as Sears and Wards, developed their own brands Increasingly retailers such as Walmart and Target are developing and promoting high-quality brands with either the store’s name or an independent name The key to success of store brands high quality at a reasonable price 17-23 Attributes Affecting Retail Outlet Selection Retail Advertising Expenditure of Individuals Drawn to a Store by an Advertised Item Source: The Double Dividend (New York: Newspaper Advertising Bureau Inc., February 1977 17-24 Attributes Affecting Retail Outlet Selection Outlet Location and Size Location and size play an important role in store choice All else equal, consumers generally select the closest store Outlet size is also important Generally, customers prefer larger outlets over smaller outlets The retail attraction model, or the retail gravitation model, is used to calculate the level of store attraction based on store size and distance from the consumer 17-25 Consumer Characteristics and Outlet Choice Two consumer characteristics that are particularly relevant to store choice: Perceived Risk Shopping Orientation 17-26 Consumer Characteristics and Outlet Choice A p athe tic Shop p e rs 16% Bargain Enthus ias tic Se ek e rs 20% Shop p e rs 22% Shopping Orientation Segments B as ic Des tination Shop p ers 22% s hop p ers 21% 17-27 In-Store and Online Influences on Brand Choices Supermarket Decisions: Two-Thirds Are Made In-Store 17-28 In-Store and Online Influences on Brand Choices Strategies used by manufacturers and retailers to influence in-store and online decisions: Point-Of-Purchase Materials Price Reductions and Promotional Deals Outlet Atmosphere Stockouts Website Functioning and Requirements Mobile Apps Sales Personnel 17-29 In-Store and Online Influences on Brand Choices Point-Of-Purchase Materials Shelf-Based Point-of-Purchase Materials 17-30 In-Store and Online Influences on Brand Choices Price Reductions and Promotional Deals Price reductions and promotional deals • coupons • multiple-item discounts, and • gifts are generally accompanied by the use of some point-of-purchase materials 17-31 In-Store and Online Influences on Brand Choices Outlet Atmosphere 17-32 In-Store and Online Influences on Brand Choices Stockouts Stockouts affect a consumer’s purchase decision Three types of perceived costs: Substitution costs Transaction costs Opportunity costs 17-33 In-Store and Online Influences on Brand Choices Web Site Functioning and Requirements Consumers often research online then buy in traditional stores However, losses also occur during the online shopping process A DoubleClick study found the following reasons for shopping cart abandonment: 17-34 In-Store and Online Influences on Brand Choices Mobile and Mobile Apps Mobile marketing is clearly seen as next horizon for marketers  local mobile search is changing how consumers find stores and brands within stores  mobile apps increasingly play role in how consumers shop, find the best deals, etc 17-35 In-Store and Online Influences on Brand Choices Sales Personnel The effectiveness of sales efforts is influenced by the interaction of • • • the salesperson’s knowledge, skill, and authority the nature of the customer’s buying task the customer-salesperson relationship In the online context, marketers are testing online sales clerks, called avatars, that interact with customers as they shop on their website 17-36 ... manufacturers' brands, and only a few, such as Sears and Wards, developed their own brands Increasingly retailers such as Walmart and Target are developing and promoting high-quality brands with either... Mobile as Part of an Omni-Channel Strategy 17- 6 Video Application The following Video Clip demonstrates how M&Ms gets personal with its multichannel strategy! 17- 7 17- 8 17- 8 The Evolving Retail Scene... calculate the level of store attraction based on store size and distance from the consumer 17- 25 Consumer Characteristics and Outlet Choice Two consumer characteristics that are particularly relevant