Fourth Class Power of Place
Distribution • What are pros and cons of controlling? • Direct distribution vs. indirect distribution
Retail-Amazingly interesting • All the rational and emotional benefits rolled up into one experience. • Ever been to an Abercrombie and Fitch? • Wal-Mart to Tiffany’s and in-between
Each week, 1/3 of US Population visits a Wal Mart $4.8 billion topline sales, over 2 milllion employees worldwide
Why retail distribution? • Scale • Working capital • Geography • Distribution Costs • Inventory costs • Service Costs • Data (book doesn’t mention)
How important are the right channels? Clothing Retailer Says It Will No Longer Destroy Unworn Garments • TWITTER • SIGN IN TO E-MAIL • PRINT • REPRINTS • SHARE By JIM DWYER Published: January 6, 2010 The clothing retailer H & M promised on Wednesday to stop destroying new, unworn clothing that it cannot sell at its store in Herald Square, and would instead donate the garments to charities.
Mass Merchandising vs. Specialty Stores • Low margin/high volume • High margin/low volume What needs do each satisfy? How about low engagement/high engagement?
What about wholesaling? • Why do wholesalers exist? • Distribution • Product selection • Service • Laws
How has the internet changed things? • Channel conflicts • Choice, convenience • Price driven consumer • Research easier-buying easier
Vertical integration-What are pros and cons of it? • Exclusive distribution vs. selective distribution vs. intensive distribution
Licensing • Joint Venture • Consignment • Contracting