Understanding the key drivers of and technology related issues associated with going multi-channel

A multi-channel retail strategy is viewed by many academics and practitioners to be the success model for most retailers. Yet, while there are many drivers of, and advantages related to, using multiple channels to sell products and services to customers likewise there are numerous technology-related issues. Despite this, the multi-channel retailing literature provides little empirical insight into these technology-related constraints. Moreover, there is a lack of multi-channel retailing research which explores the impetuses behind retailers adding new channels to go multi-channel, especially in the context of the UK retail sector. To contribute to gaps in the literature this study utilises a case study research strategy to examine the key motivations behind, and technology-related issues associated with, multi-channel retail strategic implementation, in the setting of the UK retail sector. Three UK based retailers (Boots, Screwfix and Bettys) are used which have different approaches to, and are at different stages of, adopting a multi-channel retail strategy. In addition, they have different backgrounds such as size, product range, sector and type. Consequently, the use of these three different retailers enables exploration of the drivers behind, and technological problems associated with, implementing a multi-channel retail strategy in the context of store and Internet/catalogue retailers. Case analysis reveals novel themes which are not identified, or not clearly recognised, in the literature. These include that key drivers behind retailers going multi-channel are to increase sales, and, meet the needs of the multi-channel shopper. Indeed, customers want to shop via multiple channels and therefore, these retailers have no choice but to go multi-channel if they are to meet customer needs. However, while at a strategic level these motivations were similar across the case study retailers, they also differed. For example, Screwfix added a store channel to enable customers to purchase products and receive them instantly. In contrast, Boots added an Internet channel to drive footfall in-store and increase store sales. Boots were also adding an Internet channel since it provided them with a marketing channel, which, going forward, was likely to replace other communications channels. The findings from this study also reveal that retailers encounter major technology-related issues when adding new, and using multiple, channels. These problems stem from the need to re-design existing logistics and IT infrastructure to offer a seamless, integrated offer to the customer. For instance, to leverage the brand and marketing mix consistently across all channels, and, to implement ‘click and collect’ (i.e. where customers purchase a product in one channel and collect it in another). Also, due to the need to use innovative marketing techniques, in particular, social media. Importantly, this study highlights that these technology-related multi-channel retailing constraints often have a ‘softer’ side. Technology-related problems are frequently intertwined with cultural, engagement and financial/staff resource related issues. This suggests a need for retailers to find entwined solutions to both technology and non- technology related issues to effectively implement a multi-channel retail strategy

Large UK retailers' initiatives to reduce consumers' emissions: a systematic assessment

In the interest of climate change mitigation, policy makers, businesses and non-governmental organisations have devised initiatives designed to reduce in-use emissions whilst, at the same time, the number of energy-consuming products in homes, and household energy consumption, is increasing. Retailers are important because they are at the interface between manufacturers of products and consumers and they supply the vast majority of consumer goods in developed countries like the UK, including energy using products. Large retailers have a consistent history of corporate responsibility reporting and have included plans and actions to influence consumer emissions within them. This paper adapts two frameworks to use them for systematically assessing large retailers’ initiatives aimed at reducing consumers’ carbon emissions. The Framework for Strategic Sustainable Development (FSSD) is adapted and used to analyse the strategic scope and coherence of these initiatives in relation to the businesses’ sustainability strategies. The ISM ‘Individual Social Material’ framework is adapted and used to analyse how consumer behaviour change mechanisms are framed by retailers. These frameworks are used to analyse eighteen initiatives designed to reduce consumer emissions from eight of the largest UK retail businesses, identified from publicly available data. The results of the eighteen initiatives analysed show that the vast majority were not well planned nor were they strategically coherent. Secondly, most of these specific initiatives relied solely on providing information to consumers and thus deployed a rather narrow range of consumer behaviour change mechanisms. The research concludes that leaders of retail businesses and policy makers could use the FSSD to ensure processes, and measurements are comprehensive and integrated, in order to increase the materiality and impact of their initiatives to reduce consumer emissions in use. Furthermore, retailers could benefit from exploring different models of behaviour change from the ISM framework in order to access a wider set of tools for transformative system change

Identifying the unique characteristics of independent fashion retailers in Scotland by utilising Porter’s generic competitive strategy model and the marketing mix

Independent retailers in the fashion sector make a substantial contribution to the UK economy at the time of significant change on the high street due to financial pressures and the growth of online trade. They provide an element of creativity and innovation to a homogenous retail landscape. The independent fashion retailer creates a destination and individual identity by presenting a unique offering and differentiated experience. Whilst independent retailers are important to the future of our high street, research is limited, particularly in the area of fashion independents. Therefore this research examines and identifies the unique characteristics of independent fashion retailers within Scotland. The research adopts a case study approach, qualitative methods of data collection in order to fulfil the aim and objectives of the study. Porter’s Generic Competitive Strategies and the marketing mix were utilised as a means of drawing out the individual aspects and unique characteristics of the independent fashion retailer.Los minoristas independientes en el sector de la moda hacen una contribución sustancial a la economía del Reino Unido en el momento de un cambio significativo debido a las presiones financieras y el crecimiento del comercio en línea. Proporcionan un elemento de creatividad e innovación a un paisaje minorista homogéneo. El distribuidor independiente de moda crea un destino y una identidad individual al presentar una oferta única y una experiencia diferenciada. Mientras que los minoristas independientes son importantes para el futuro, la investigación es limitada, sobre todo en el área de empresas independientes de la moda. Por lo tanto, esta investigación examina e identifica las características únicas de los minoristas independientes de moda en Escocia. La investigación adopta un enfoque de estudio de caso, métodos cualitativos de recolección de datos con el fin de cumplir con los objetivos del estudio. Las Estrategias Competitivas Generales de Porter y la mezcla de mercadeo se utilizaron como un medio de extraer los aspectos individuales y las características únicas del minorista de moda independiente

Seller strategies on eBay: Does size matter?

We examine seller strategies in 1177 Internet auctions on eBay, to understand the diversity of strategies used, and their impacts. Dimensions of strategic choice include the use of a ‘Buy it Now’ option, the level of the starting price, and the use of a secret reserve price. A major focus of our analysis is on differences across sellers with different volumes of sales. The largest volume sellers (termed “retailers”) in our sample employ uniform selling strategies, but lower volume sellers exhibit a wide variety of strategic choices. While some components of sellers’ strategies appear important in raising seller revenue, including starting the auction with a ‘Buy it Now’ offer, the overall impact of seller strategy choices on the outcome appears to be quite small. We interpret this as evidence for the competitiveness of the online auction market for frequently traded items with conventional retail alternatives. An exception is provided by the use of a secret reserve price, which raises the winning bid conditional on a sale, but reduces the probability of a sale. Depending on sellers’ risk aversion and impatience, this may also be an efficient outcome

The Future of Retail Operations

Retailing consists of all the activities associated with the selling of goods to the final consumer. In this article, we review the research on retail operations published in Manufacturing & Service Operations Research (M&SOM) since 1999. We then discuss the current retail landscape and the new research directions it offers, in which M&SOM can play a prominent role

Why markdown as a pricing modality?

Markdown as a pricing modality is ubiquitous in retail whereas everyday low price (EDLP) remains relatively rare (despite its several advantages, such as simplicity). This paper explores whether and why retailers can use either of these pricing modalities as an effective defense against a competitor entering the market with the alternative pricing modality. Various studies have shown that consumers are strategic and heterogeneous in their valuation of a product. Consumers are also shown to be regret-prone, and anticipation of regret affects their purchase decisions. Consumers experience availability regret when they are unable to purchase products due to stockouts and high-price regret when they miss an opportunity to purchase products at low prices. Considering such factors, consumers decide whether, when, and from which retailer to purchase the product. In such a market environment, we find that the possible entry of a competitor should deter retailers from using the EDLP pricing modality but not markdown. We also identify a new reason for the markdown retailer to ration stock (in addition to the reason for discouraging consumers to wait for the markdown). In particular, we show that the markdown retailer can use inventory rationing to preclude a cutthroat competition and bankruptcy after the entry of an EDLP retailer. We also quantify how consumer regret affects both retailers' decisions and resulting profits. In particular, in a competitive market, the EDLP retailer cannot simply disregard consumers' availability and high-price regret (even when it stocks ample inventory and does not discount prices). We show that high-price regret and availability regret have complementary effects on the markdown retailer's rationing strategy and the EDLP retailer's price decision. Finally, using a proprietary price data set from a large department store, we show that ignoring regret factors causes the markdown retailer to leave up to 20% of its profits on the table. In addition, in a competitive market, the markdown retailer rations too aggressively when regret is ignored and, as a result, leaves some of the forgone profit to its competitor-the EDLP retailer. The retail industry is often characterized by its slim profit margins. In such an environment, the aforementioned results also suggest that retailers should seriously consider investing in developing the capacity to estimate and quantify the role of regret in consumers' purchase decisions

International expansion and buyer-driven commodity chain: the case of TESCO

This paper is prepared within the project ‘The Emerging Industrial Architecture of the Wider Europe; the Co-evolution of Industrial and Political Structures ’ funded by the ESRC programme ‘One Europe or Several?’ * Authors would like to thank Nick von Tunzelmann for his valuable comments in earlier draft versions. Following the collapse of Communism, central European countries have experienced an invasion of foreign investment in many sectors. The sectors that target consumers directly have found an opportunity to gain market share with considerable long-term profit potential. Thus, investments by western retailers are quite large when compared to other industries1. These multinational

Theory and evidence on pricing by asymmetric oligopolies

We present an analysis of markets with many asymmetrically positioned retailers that compete for the business of both informed and uninformed customers for a homogenous good, such as software, music, book or a brand-name appliance. We show that two forms of asymmetry, one related to loyal segment sizes of retailers and one related to the positioning of firms, completely explain the observed price dispersion in such markets and the multitude of asymmetrical strategies adopted by retailers. The stochastic dominance of empirical mixed strategy measures is used to test the theory with data on 968 books from 10 online retailers

Using Transaction Utility Approach for Retail Format Decision

Transaction Utility theory was propounded by Thaler to explain that the value derived by a customer from an exchange consists of two drivers: Acquisition Utilities and Transaction utilities. Acquisition utility represents the economic gain or loss from the transaction. Where as transaction utility is associated with purchase or (sale) and represents the pleasure (or displeasure) of the financial deal per se and is a function of the difference between the selling price and the reference price. Choice of a format has been studied from several dimensions including the cost and effort as well as the non-monetary values. However, the studies that present the complete picture and combine the aspects of the tangible as well as intangible values derived out of the shopping process are limited. Most of the studies, all of them from the developed economies, have focussed on the selection of a store. They represent a scenario where formats have stabilised. However, in Indian scenario formats have been found to be influencing the choice of store as well as orientation of the shoppers. Also, retailers are experimenting with alternate format with differing success rates. The author has also not found a study that has applied this theory. It is felt that the Transactional Utility Theory may provide a suitable approach for making format decisions.