An extensive summary of the course 'retail & omnichannel marketing' given at the RUG for the Msc Marketing. All the articles for the exam + the lectures have been summarized. Since the summary is quite extensive, reading the literature yourself, won't be necessary.
Good luck with studying for the...
,Week 1
Ratchford et al. (2022)
Online and offline retailing: what we know and directions for future research
Review of the literature on the interaction between e-commerce and offline retailing.
- What is the relationship between online and offline retail channels including competition and
complementarity between online and offline sellers as well as online and offline channels of an
omnichannel retailer?
- What is the impact of e-commerce on consumer behavior?
- How has e-commerce impacted retailers’ key managerial decisions?
What is the relationship between online and offline retail market?
What are the differences in advantages between online and offline stores?
Offline store Online store
Information advantage: it allows physical Cost advantage: lower search costs, distribution
examination of the product. costs and inventory holding costs.
It allows immediate consumption of the product. Easier for consumers to find retailers that charge
the lowest prices.
Sales support: service of the personnel. No (less) geographical issues. There are not (less)
place dependent.
2
,Are online and offline stores complementary or substitutes?
- Both have been argued. However, in general the literature points at complimentary.
- Adding an online store to an offline store, may increase brand awareness.
- Online and offline stores can have different levels of service -> service integration between the two is
really important.
- Competition between online and offline retailers is less intense when one channel has a clear
advantage over the other.
Transition from offline channels to multichannel and omnichannel retailing.
Multichannel strategy = operating both offline and online channels.
Omnichannel strategy = adopting coordinated strategies across the online and offline channels.
- Evidence that consistency between offline and online offerings is beneficial to retailers. It causes thrust
and purchase intentions.
What is the impact of e-commerce on consumer behavior?
It’s about the cost of time and effort
Kinds of searching on the internet:
- Sequential search -> consumers stop searching when the expected gain of examining an additional
alternative is less than the cost.
- Simultaneous search -> consumers choose a fixed number of items to search and the number of
alternatives to examine is chosen to maximize the difference between utility and search costs.
Consumers do not search extensively.
They often go for the first pick, instead of searching further (which may have caused a better deal).
Price dispersion = the result of variation in search costs of consumers.
Lower online search costs appear to have been a factor in the demise (=ondergang) of offline
information providers (like travel agents).
The valance of reviews is perceived to be more important than the volume of reviews. It has a bigger
effect on sales.
What is the impact of e-commerce on retailers’ managerial decisions?
1. What data to acquire and how to employ it in decision making.
Big data = large volumes of data that require special storage facilities, need for timely access, a variety of
formations, reliability and validity.
We are able to look at consumers at different stages of their customer journey.
2. Digitization
Digitization = transforming goods from a physical to a digital product format.
Digital piracy = an alternative consumption channel that offers free copies of products.
3
, 3. Concentration of sales
Increased assortment breadth and depth.
4. Pricing
The owner of the platform controls the degree of price competition (since it determines how many
people are offering on his platform).
Managerial implications
- Allowing product returns reduces consumers’ perception of purchase risk and increases consumers’
purchase intentions.
- Being soft with money and time in return policies increases consumers value perceptions.
- Opening showrooms or physical stores may reduce return rates for online purchases.
4
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