Key Terms

Note: These terms are listed in the order in which they appear in Retail Management, 12e.

Single-Channel Retailing A distribution approach whereby a retailer sells to consumers through one
retail format.
Multi-Channel Retailing Approach whereby a retailer sells to consumers through multiple retail formats
(points of contact).
Nonstore Retailing Utilizes strategy mixes that are not store-based to reach consumers and complete
transactions. It occurs via direct marketing, direct selling, and vending machines.
Direct Marketing Form of retailing in which a customer is first exposed to a good or service through a
nonpersonal medium and then orders by mail, phone, or fax and increasingly by computer.
Data-Base Retailing Way to collect, store, and use relevant information on customers.
Specialog Enables a retailer to cater to the specific needs of customer segments, emphasize a limited
number of items, and reduce catalog production and postage costs.
Infomercial Program-length TV commercial (most often, 30 minutes in length) for a specific good or
service that airs on cable television or on broadcast television, often at a fringe time. It is particularly
worthwhile for products that benefit from visual demonstrations.
Direct Selling Includes both personal contact with consumers in their homes (and other nonstore
locations such as offices) and phone solicitations initiated by a retailer.
Vending Machine Format involving the cash- or card-operated dispensing of goods and services. It
eliminates the use of sales personnel and allows around-the-clock sales.
Internet Global electronic superhighway of computer networks that use a common protocol and that are
linked by telecommunications lines and satellite.
World Wide Web (Web) Way of accessing the Internet, whereby people work with easy-to-use Web
addresses and pages. Users see words, colorful charts, pictures, and video, and hear audio.
Video Kiosk Freestanding, interactive, electronic computer terminal that displays products and related
information on a video screen; it often uses a touchscreen for consumers to make selections.
1.

To contrast single-channel and multi-channel retailing A new retailer often relies on singlechannel retailing, whereby it sells to consumers through one retail format. As the firm grows, it
may turn to multi-channel retailing and sell to consumers through multiple retail formats. This
allows the firm to reach different customers, share costs among various formats, and diversify its
supplier base.

2.

To look at the characteristics of the three major retail institutions involved with
nonstore-based strategy mixes: direct marketing, direct selling, and vending machines
with an emphasis on direct marketing Firms employ nonstore retailing to reach customers and
complete transactions. Nonstore retailing encompasses direct marketing, direct selling, and vending
machines.
In direct marketing, a consumer is exposed to a good or service through a nonpersonal medium
and then orders by mail, phone, fax, or computer. Annual U.S. retail sales from direct marketing
(including the Web) exceed $425 billion. Direct marketers fall into two categories: general and
specialty. Among the strengths of direct marketing are its reduced operating costs, large
geographic coverage, customer convenience, and targeted segments. Among the weaknesses are
the consumers inability to examine items before purchase, the costs of printing and mailing, the

low response rate, and marketplace clutter. Under the 30-day rule, there are legal requirements
that a firm must follow as to shipping speed. The long-run prospects for direct marketing are strong
due to consumer interest in reduced shopping time, 24-hour ordering, the sales of well-known
brands, improvements in operating efficiency, and technology.
The key to successful direct marketing is the customer data base, with data-base retailing being a
way of collecting, storing, and using relevant information. Several trends are vital to direct
marketers: their attitudes and activities, changing consumer life-styles, increased competition, the
use of dual distribution, the roles for catalogs and TV, technological advances, and the growth in
global direct marketing. Specialogs and infomercials are two tools being used more by direct
marketers.
A direct marketing plan has eight stages: business definition, generating customers, media
selection, presenting the message, customer contact, customer response, order fulfillment, and
measuring results and maintaining the data base. Firms must consider that many people dislike
shopping this way, feel overwhelmed by the amount of direct mail, and are concerned about
privacy.
Direct selling includes personal contact with consumers in their homes (and other nonstore sites)
and phone calls by the seller. It yields $29 billion in annual U.S. retail sales, covering many goods
and services. The strategy mix stresses convenience, a personal touch, demonstrations, and more
relaxed consumers. U.S. sales are not going up much due to the rise in working women, the labor
intensity of the business, sales force turnover, government rules, and the poor image of some
firms.
A vending machine uses coin- and card-operated dispensing of goods and services. It eliminates
salespeople, allows 24-hour sales, and may be put almost anywhere. Beverages and food items
represent 95 percent of the $45 billion in annual U.S. vending revenues. Efforts in other product
categories have met with some customer resistance; and items priced above $1.50 have not done
well.
3.

To explore the emergence of electronic retailing through the World Wide Web The
Internet is a global electronic superhighway that acts as a single, cooperative virtual network. The
World Wide Web (Web) is a way to access information on the Internet, whereby people turn their
computers into interactive multimedia centers. The Web can serve one or more retailer purposes,
from projecting an image to presenting information to potential investors. The purpose chosen
depends on the goals and focus. There is a great contrast between store retailing and Web
retailing.
The growth of Web-based retailing has been enormous. U.S. revenues from retailing on the Web
are $250 billion. Nonetheless, the Web still garners only a small percentage of total U.S. retail
sales.
Somewhat more females than males shop on the Web. Web usage declines by age group and
increases by income and education level. Shoppers are attracted by Web site design, reliability,
customer service, and security. Nonshoppers worry about the trustworthiness of online firms, want
to see and handle products first, and do not like shipping cost surprises.
The Web offers these positive features for retailers: It can be inexpensive to have a Web site. The
potential marketplace is huge and dispersed, yet easy to reach. Sites can be quite exciting. People
can visit a site at any time. Information can be targeted. A customer data base can be established
and customer feedback obtained. Yet, if consumers do not know a firms Web address, it may be
hard to find. Many people are not yet willing to buy online. There is clutter with regard to the
number of retail sites. Because Web surfers are easily bored, a firm must regularly update its site
to ensure repeat visits. The more multimedia features a Web site has, the slower it may be to
access. Some firms have been overwhelmed with customer service requests. Improvements are
needed to coordinate store and Web transactions. There are few standards or rules as to what may
be portrayed at Web sites. Consumers expect online services to be free and are reluctant to pay for
them.

A well-developed Web strategy can move through nine stages, from determining the customer base
to measuring performance. A systematic approach is vital.
4.

To discuss two other nontraditional forms of retailing: video kiosks and airport retailing
The video kiosk is a freestanding, interactive computer terminal that displays products and other
information on a video screen; it often uses a touchscreen for people to make selections. Although
some kiosks are in stores to upgrade customer service, others let consumers place orders,
complete transactions, and arrange shipping. Kiosks can be put almost anywhere, require few
personnel, and are an entertaining and easy way for people to shop. They yield $15 billion in
annual U.S. revenues.
Due to the huge size of the air travel marketplace, airports are popular as retail shopping areas.
Travelers (and workers) are temporarily captive at the airport, often with a lot of time to fill. Sales
per square foot, as well as rent, are high. Gift items and I forgot merchandise sell especially well.
Annual retail revenues are $35 billion at airports.