Retail/channel management = place – getting the product to consumers – involved relations
between brand and retail – complicated and changing
Marketing channel = path to the consumer
- Set of organizations
- Working together
- Make food foods available
- For end users
What is happening in the middle companies
Single largest company in the word = Amazon
Can be deceiving that little looking companies with small prices are big companies in comparison
Revenues of biggest compared to sm..
Access to consumers = power
Whoever controls the store floor has this power to observe
➢ There has been a power shift from manufacturers to retailers
What is the state of retailing?
➢ Shops are closing massively
➢ Store networks have been rightsized at pace
Some retailers will be more and some less affected
➢ Unexpected bad: Amazon – layoffs, rethinking investments, closing stores
➢ Opportunity in helping them out in overcoming their issues
,Confusing retail times
We are talking vertical relationship – retailers and someone in between down in the stream – not
with a direct competitor
The retail apocalypse….
Cause: the internet, Amazon
The pandemic only made it worse
How is this changing the game? What is going on?
The % of retail sales occurring online – worldwide 19% - so could this really be the cause of massive
onslaught -
Why did ecommerce disrupt? – business model behind it – selection disrupted the one – assortment
size/selection – create endless aisles
Economies of scales and scope – prices down – customer experience up etc…
This is the model behind ecommerce
Creating a different consideration set for consumers – enormous amount of brand at amazon so you
can find almost everything there
➢ Pricing
▪ Moving towards individual pricing!! (based on visits etc.)
▪ Pricing algorithm compares the lowest prices across the retail sector for
particular products – including those retailers selling in bulk and where
membership costs are needed
➢ Fulfillment
▪ Minimal effort, products being brought to you
▪ Becomes more complex because what is the point of being a retailer still
▪ Network of Distribution Centers (DSs)
▪ Guarantees free delivery in a few days
, e-commerce fundamentally changed consumers in the way they think and what is acceptable – we
want everything, anytime, without effort, at the lowest costs and zero willingness to pay – that
killed everything
➢ Result is difficult and extremely expensive last mile – lost all classic advantages there
➢ Fulfillment is Amazon’s fastest growing expense area
Is ‘Etail’ unsustainable? – weakness & new layer of competition and new type of thinking – delivery
and fulfillment is leading to unsustainable costs
Rethink the way we set up our operations – give them more than stores – give them story
experience
➢ Stores to the rescue with cutting costs and adding convenience
➢ Walmart sees store estate as key for successful e-commerce fulfillment
➢ Network of stores can act as distribution centers – store personnel pulls from assortment –
allows for faster delivery – allows for instore pick up & returns
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