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Retail and Distribution

by Carmen Gassmann, Quentin Gilon, Finn Reemtsma, Frank van Wingerden & Sophie Xu

Agenda
The Final Frontier Different Channels of Distribution Retailing B2C E-Commerce Shop Positioning Strategy IKEA case

Agenda
The Final Frontier Different Channels of Distribution Retailing B2C E-Commerce Shop Positioning Strategy IKEA case

Distribution Channels
Different types of channels Consumer channel B2B channel Dual/Multiple distribution systems Hybrid marketing system

Distribution Channels

H&M
Second largest retailer with 2500 stores in 43 countries Philosophy: "Fashion and quality at the best price Goal to increase the number of stores and sales Headquarter in Stockholm, transit terminal in Hamburg Aims to have clothing items in store 2-6 weeks after design

H&M
Step 1: Objective to minimize costs and maximize product exposure Step 2: Channel should be as short as possible few intermediaries and buy large quantities

H&M
Step 3: Contractual vertical marketing system. Step 4: H&M dependent on a good logistic system. Every country has its own distribution centre and warehouses. Transport contracted to third parties

Agenda
The Final Frontier Different Channels of Distribution Retailing B2C E-Commerce Shop Positioning Strategy IKEA case

Retail
What exactly is retailing? What companies do you think of when you think of retailer? Can a retailer be a product? Can we define this product?

The Future of Retailing


Demographics (working people, elderly, different cultures) Technology (web, in store technology) Globalisation (Smaller world, emerging countries)

Agenda
The Final Frontier Different Channels of Distribution Retailing B2C E-Commerce Shop Positioning Strategy IKEA case

B2C E-Commerce

Consumers Point of View


Benefits Limitations

Consumers Point of View


Benefits Shop at any time No travelling Many choices Better information Easy to compare product Easy to manage expenses Limitations Lack of security Customer Service No human relationship Difficult to use

Business Point of View


Benefits Limitations

Business Point of View


Benefits Lower cost Display information quickly and cheaply Limitations Technology problem Payment plans Consumers may spend less money

Increase sales ?

Agenda
The Final Frontier Different Channels of Distribution Retailing B2C E-Commerce Shop Positioning Strategy IKEA case

How do consumers distinguish shops?


Products Shop Image

Shop Image
The consumers perception of the shop, affected by Shop Design Shop Personnel Pricing Policy Shop Location

Real Life Example


Relatively small hard and software manufacturer Serving a niche market, resulting in weak overall brand image Most big retailers wont stock products Sales staff of existing retailers is not qualified to foster either brand loyalty nor differentiate products from competitors

Shop Design
Shop Layout Fixture type and merchandise The sound of music Color and lighting

Shop Personnel

Shop Location

Real Life Solution

Success in Numbers

Agenda
The Final Frontier Different Channels of Distribution Retailing B2C E-Commerce Shop Positioning Strategy IKEA case

IKEA
Founded in 1943 Employer of over 127,000 people Revenue of $23.5 billion Net income of $2.7 billion Active in 45 countries worldwide

SWOT

The Retail Life Cycle

IKEAs Future
50 Extra stores in North America 8 Extra Stores in China Differentiation? Web Based?