The paper "How Has the Growth in Nontraditional Retailing Influenced Channel Profitability by Sam Ashe-Edmunds" is a perfect example of a marketing article. The article is related to the issues learned in Lecture 4 on Web and No-Store Based Retailing. It also clearly highlights the issues learned in Lecture 2 on Strategic Planning in Retailing. STEP 1:SUMMARY OF FACTS IN THE ARTICLE Strategic retail planning According to this article, strategic planning needs to factor in several options when selling directly to consumers online. There are costs associated; these include virtual shopping cart, credit card processing and shipping capabilities and telephone support.
There are varieties of websites especially sales websites and third parties that can handle online sales needs. The online business is relatively cheaper for smaller businesses. The cost of rent, hire clerks, pay property tax, and insurance. Sam Ashe-Edmunds the author pointed out that there is the advantage of the economies of Scale and retailers need to be conscious when making use of non-traditional sales channels which may appear cheaper to use than brick-and-mortar sales, and this is because there are factors of using multiple sales channels on profitability.
There are cases where one does online sales, and the business must continue to sell using traditional distribution channels, here there will be a need for enough online sales to pay for startup and ongoing operating costs such as building the online sales capabilities and maintaining the software, service and shipping. This needs to be done in order to realize the actual benefits of online sales; else the profitability would even be lower compared to the traditional channels. The article highlights strategic retail planning as enabling retailers to conduct a thorough analysis of the requirements of the market.
According to the author, the choice of the right Channels is tricky; there are two major factors that are key in deciding whether to use traditional or non-traditional sales channels or a mix of both. The two are total cost and volume of sales. There is a need for an accurate sales forecast. This is the only thing a retailer needs to do in order to determine the difference in the various channels and their profitability. Thorough analyses of customer behavior will enable a retailer switch according to the customer demands. Technological Advancements According to this article, there are different types of retail sales channels.
The advent of the internet has made retailing effective through sales of goods online, unlike previously where goods were sold through storefronts and catalogues. The advertisement has also improved where adverts are broadcasted in social media and the internet. Previously, before the advent of the internet, adverts were done via direct-response TV, print and radio ads. The nontraditional retail channels have now adopted new strategies where goods are now sold directly to consumers via a manufacturer website, through a representative’ s website or using a variety of third-party sales websites. Retailers are increasingly going global; most of them have decided to use IT as a vital tool to ensure online sales achieve high volumes at a reduced cost.
According to the author, the many customers going online call for the delivering of uninterrupted service. Therefore retailer cannot afford at any given time for their site to go down or deliver poor customer experience. This will ensure there is the realization of maximum sales and great brand experience is delivered.
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Understanding your customers. April 4, 2014