TG World

Cross-channels

M.E. Marketing Experts

TABLE OF CONTENTS

Background Information................................................................................................................. 2

Competitors................................................................................................................................. 3-4

Consumers................................................................................................................................... 5-6

Economy...................................................................................................................................... 7-8

Product....................................................................................................................................... 9-10

Presentation................................................................................................................................... 11

Promotion.......................................................................................................................................12

Price...............................................................................................................................................13

Profitability................................................................................................................................... 14

Service..................................................................................................................................... 15-16

Bibliography............................................................................................................................ 17-18

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Background Information
TG World is a national retailer, specializing in low cost electronics, clothing, housewares, small
appliances, beauty products, toys, and furniture. Recently, TG World started to dedicate portions
of their retail stores for grocery sales to better position against competitors. TG World operates
retail stores in urban and suburban centers around the country and a fully developed internet
shopping site that includes all non-food in-store items and several online only items.
For TG World, Online retail sales reached just over $17 million in 2010 and are expected to
enjoy a 14% compound annual growth rate (CAGR) over the next five years, reaching $32
million by 2015.
TG World accredits cross-channel shoppers to the forecasted CAGR, which makes the
expected growth of the total US retail industry (an annual growth of 4.6%) paling in comparison.

Competitors
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TG World is among other national retailers. There is a plethora of national retailers, but only a
certain percentage relate to TG World and what they have to offer. There are those businesses
who TG World can classify as primary competitors and those who are secondary competitors.
The following explains the major retail competitors of TG World, both primary and secondary:

Businesss Name:
Online and Offline
Sales:
Products and
Services

Marketing Tactics

Primary Competitors
WAL-MART
TARGET
$404.54 million
$64.74 million

KMART:
$16.22 million

Apparel, Auto &

Home Supplies,
Tires, Baby, Books,
Apparel: Baby, Kids,
Health & Beauty,
Teens, Mens,
Home [Improvement], Womens, Electronics,
Office Supplies,
Sports Equipment and
Jewelry, Movies,
Apparel, Toys, Gift,
Music, Outdoor
Books, Seasonal
Living, Pets,
Items, Grocery, Office
Pharmacy, Photo
Supplies, Giving &
Center, Sports &
Wrapping, Registries,
Fitness, Tires, Toys,
Layaway, REDCard
Electronics, Grocery,
Program, etc.
Seasonal Items,
Layaway, Internet
Service, Vision Help,
Credit Program, etc.
Clearance
Clearance
Advertisements,
Advertisements.
Weekly Ads,
Weekly Ads,
Television
Television
Commercials,
Commercials,
Sponsorships, Social
Sponsorships, Social
Responsibility, Social Responsibility, Social
Networking, Bonus
Networking, E-mail,
Music Downloads, EMobile, etc.
mails, Mobile, etc.

Appliances, Auto,
Baby & Nursery,
Beauty & Health, Bed
& Bath, Books &
Magazines, Clothing,
Electronics & Office,
Fitness & Sports,
Food & Grocery,
Home, Jewelry, Lawn
& Garden, Music,
Movie, Gaming,
Office Supplies,
Outdoor, Pharmacy,
Pets, Toys, Layaway,
Credit Program,
Savings Program, etc.
Clearance
Advertisements,
Weekly Ads,
Television
Commercials,
Sponsorships, Social
Responsibility,
Sweepstakes, Social
Networking, E-mail,
Mobile, etc.

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Competitors (cont.)

Businesss Name:
Online and Offline
Sales:
Products and
Services

Marketing Tactics

Secondary Competitors
WALGREENS
COSTCO
$76.3 billion
$67.3 billion
Health and WellBeing, Personal Care,
Home Medical,
Beauty, Grocery,
Home, Baby and
Children, Electronics,
Pets, Seasonal, TV
Promotions, Lenses,
Drug Store,
Pharmacy, Photo, etc.

Appliances, Auto,
Baby & Kids,
Computers,
Electronics,
Entertainment,
Funeral, Furniture &
Dcor, Grocery &
Floral, Hardware,
Health & Beauty,
Home, Jewelry,
Outdoor, Sports &
Fitness, etc.
Whats New, E-mail
channel, Newspaper
Advertisements,

E-mail channel,
sweepstakes, Weekly
Ads, Commercials,
Sponsorships,

JCPENNY
$251 million
Apparel,: Women,
Men, Baby, Teen,
Home Store Shoes,
Handbags &
Accessories, Jewelry,
Patio, etc.

Clearance, E-mail
channel, Weekly Ads,
Coupons accessible,
etc.

These are just several secondary competitors to TG World- the ones that have shown the most
competitiveness in a sense to a percentage of products that TG World has to offer. Although there
are many retailers to be taken into consideration with the competitive market, there are also the
wholesale companies (i.e. Sams Club, BJs Wholesale, and COSTCO).
It is recommended that TG World enlarge the noticeability of the company. Through high
competitive strategies of frequent customer cards to visual stimuli, the amount of cross-channel
shoppers will heighten and there will be an increase in sales, brick-and-mortar and online. It is
also recommended that through consultation, TG World make a company profile and competitive
business profiles, so that you can refer back to the information and data to better your position on
the competitive market.

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Consumers
The following demographic break out of TG Worlds customers base by channel is based on
surveys completed by respondents between 2007 and 2010:
Age Group
Up to 18
18-25
26-32
33-45
Over 45

Retail Store
4%
11%
16%
25%
13%

Online
2%
6%
10%
10%
3%

It is believed that those who exceed the age of 45 still have that online shopping capability, for
they have the advantage of being those with careers and a hefty to decent gross income. The
given Age Group of over 45 is broad, in regards to the supplementary statistics of the surveys.
It is believed that for a better aim to those cross-channel shoppers, there should be an even higher
age excise which would range from the age of 45 to at most the age of 70, otherwise known as
Baby Boomers. These people within this age group are intertwined with the direction of the
economy and have the financial base.
Cross-channel shoppers can be described as consumers that use both the Web and physical retail
stores to make convenient and educated purchases. Not only is this group consumers growing
fast, but research suggest that cross-channel shoppers spend more on average than their pure
offline or online counterparts.

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Same site I buy from regularly

General surfing
Search engine
Special offer I saw
Personal recommendation
Shopping comparison website
Same store I buy from offline
Online recommendation
Online ad
TV/print or other ad
Other
0%

10%

20%

30%

40%

50%

60%

The
following graph answers the question: What helps you to decide which site to use for shopping
online?

Source of chart: Respondents who made a purchase online in the last 3 months (2010)

The graph demonstrates tactics used in order for online shoppers to find the best store on the
internet.
When taking your target market into consideration, there are also some other specific factors to
be taken into consideration:
Types of Segmentation18

Demographics:
Income, Gender, Age, Marital Status, Household Size
Psychographics:
Values & Lifestyle Options- VALS, Attitudes, Preferences, Perceptions
Beneficial:
Accessibility, Location/Proximity, Durability, Premiums, Mileage,
Corroboration, Status, Recognition, Mutual Benefit/Interchange

Value

Enjoyment,

All of these factors have a role in reaching your cross-channel shoppers.

Consumers perceive a difference between TG Worlds online and offline assortments. Through
the case of inventorial limits to not exceed company spending and to avoid minimizing online
sales through sole brick-and-mortar efforts of making offline transactions, there are consumers
who observe a difference on what the store has to offer versus their online site.

Economy
There are several economic factors that have an impact on or change how your cross-channel
shopper shops. Some taken into consideration are as follows:

Fuel:

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Gas can change how a cross-channel shopper shops depending on the price of gas. Such a
factor gives the consumer the option of their choice: whether it is convenient to them to
travel on-site to the store or to just shop online at home or work.

Sales & Availability:

Online sales or availability versus local sales and availability can change how a crosschannel shopper shops by limiting what they can buy at a certain time/place. Based on the
economic status, it may or may not be feasible to carry all items that your store has to
offer, due to company budgeting and reliability of online transactions.

Limitation and Varieties:

Limitations, based off the economy, give the consumer the conveniences sought for or
obstacles to make a desired purchase. Some businesses solely do transactions and sales
online while some are purely offline. Both scenarios bring about either the conveniences
of having a credit card to shop online for specific items [not sold in-store] or fuel to travel
to the store and make a purchase. Also, the limitation of inventory comes into play. Some
stores may only carry a product in-store and vice versa. It has grown apparent that more
varieties of a product can be found online for consumers to browse and purchase.

Customers Income:
Customers income can change how a cross-channel shopper shops by what to buy or how
much to buy/spend. This status gives the consumer the mindset of the needs versus wants
concept. With a low to minimal financial base from collected unemployment or through
savings, the consumer has a low discretionary income and must resort to prioritizing from
what they really want to what they truly need. Cross-channel shoppers can interchange
from buying offline and buying online based on sales and promotions of the store.

Supply and Demand:

The concept of supply and demand is the creation of an optimum price of a product based
its supply and demand. With a higher demand and a lower supply, the price will increase
and vice versa.

Economy (cont.)

Unemployment:
Unemployment if the cross-channel shopper will affect both offline and online sales, due
to lax funds. Unemployment within the company creates an impact on the quality of a

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product or service in the business. This status of work is one that makes an individual or
others dismal compared to those with employment and a higher financial base.

Product

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45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

To have online sales, it is vital to offer those categories that the cross-channel shopper will
browse through and shop in. The following graph emphasizes on the online purchases and each
categorys popularity in sales:

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Source of chart: Respondents to The Nielsen Company Survey in 3 months (2010)

The category clothing is more vibrant than the other categories because this category is most
believed to be most browsed and purchased from by cross-channel shoppers. It shows that 64%
of cross-channel shoppers who purchase clothing online are females. This shows a prospective
increase in this certain demographics purchases in the next five years to reach the forecasted
amount of $32 million by 2015.

Product (cont.)
The category cosmetics/nutrition is highlighted because it is well predicted, based on
research and current retail trends, that this category will rise in percentage popularity and will be
more stressed on in the current fiscal year and those to come, for one of the current governmental
goal is to create a healthier environment, which will drive sales in this category.
For those who currently purchase clothing offline and online, they will be open to more options
online and in-store. Its recommended that there be a link to a clearance section, showing
apparel, shoes, and accessories that can be found only online, only in-store, or both.

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Presentation
Presentation drives sales through positive appearance. Here are some key ideals that should be
seen within the store:

Layout
There should be a strategic design to a product or a service.

Appeal
The persona of the products or services presentation should attract customers to browse
other options in-store and/or online.

Organization
So that the consumer has a basic knowledge of what the product or service is about, it is
vital to make sure that the view of the customer is one that sees an organized structure,
creating interest.

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Cleanliness
The appearance has to be welcoming and vibrant versus grimy and vulgar with material
that offends or repels both online and offline consumers.

Color
The presence of the presentation must be known. It is recommended that the more vibrant
the presentation, the more noticeable increase in customer flow and interest in a product,
service, or browsing other online and in-store categories.

For an in-store presentation, it is recommended that there be an area for products that are onlineonly be displayed. Also, to reach those consumers who are solely offline shoppers, it is plausible
that there be a sample of what can be purchased online by products (i.e. a pair of jeans that are
sky blue are sold in-store, but a customer has been seeking out for black and white pairs of jeans,
which can be purchased online). For those who are unaware of options that are there for them, it
is vital to showcase them to increase customer loyalty and to increase sales.

Promotion
To reach the projected value of 14% of TG Worlds CAGR, it is important to get the word out
about both in-store and online sales. There is a plethora of ways to do this. Here are some
recommended methods that have been proven effective:

Product Promotions

Percentage off per item

Fixed amount off per item

Fixed amount off for all

Buy x, get one or more items at a discount

Free gift with purchase

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Order Promotions

Percentage off

Fixed amount off

Free gift with purchase

Shipping Promotions
o

Free shipping

Discounted shipping for an order using a selected ship mode

Discounted shipping for all items using a selected ship mode

Discounted shipping per item using a selected ship mode

Direct E-mail

Sponsorships of community or national events

Sweepstakes

It is important to keep TG World in the public eye, giving you the upper hand in your position
against your competitors.
It is also recommended that TG World exhibit to the community and/or nation social
responsibility through corporate donation(s), sponsorship, etc.

Price
Price can also be classified as to how a consumer assesses value.

Need
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Based off the necessity of a product or service, a consumer can assess whether it is
important or vital to purchase such a product or service.

Alternatives
Consumers are open to a large window of alternatives, in regards to a plethora of
products, services, and similar businesses. When the price is marked up to that which is
unaffordable to the consumer, they may go elsewhere and give the competitor another
sale and a larger increase in customer loyalty.

Perception of value
A consumer who observes a product or service as low quality or too expensive in contrast
with the products features and qualities may resort to another of its kind and give a
competitor the upper hand in their chances to increase their appeal and to swerve
consumer perception from the competitor to their business.

Sustainability
The lasting time of something that the customer is seeking out for is a factor which plays
a role in whether the consumer will make a purchase. The durability of something is a
quality that consumers look for, because consumers look for a lasting quality that comes
from a business.

Performance
Consumer assessment can be shaped around the factor of performance. This creates a
mindset for each consumer who minds performance- one that seeks for high quality
performance that is worth the money value.

Credibility
The standing of a product/service is taken into consideration in whether or not the
consumer will remain with their primary choice of business or go with a different type of
business, product, or service.

Profitability
It is M.E. who can generate a net income on a consistent basis. To do this, it is recommended that
TG World take the brick-and-mortar state of the business and direct consumers to buy online.
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This will affect profit, reducing cost of securing stock in-store. Also, rewards for those who
purchase online are applicable to the stores profitability. Immediate rewards online, such as
discounts, will reduce the costs to brick-and-mortars, and vice versa.
Profitability takes into account payroll, rent, utilities, insurance, and advertising.
Clearly, keeping expenses under control is essential for increasing a store's profitability. Here are
some areas to target:

Employee productivity
Payroll is typically a store's biggest expense other than the cost of merchandise. Welltrained, motivated employees can increase sales, making the employer's investment in
them worthwhile.

Utilities
Michigan's new electric deregulation laws allow businesses to switch to alternative
energy suppliers for lower rates.

Loss prevention
Shoplifting, employee theft and credit card fraud directly impact a store's bottom line.
Implement effective loss-prevention measures to avoid getting burned.

Service

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TG World displays a great record of online retail sales. Though this is true, there are still some
issues that are about in the realm of online shopping. Some roadblocks to online shopping for the
consumer, which impacts the online cash flow of the business, are as follows:
Identity Theft
Lack of credit card (no credit, bad credit)
Technological Issues/Accessibility
Concern of unknown quality of merchandise
Shipping Cost/Problems
Return Policies/Difficulties
These issues are applicable to the revenue of the business. Recommendations to manage these
roadblocks are:

Solution

Target Demographic(s)

Problems Addressed

In-store display of online

items

All

Unaware of extended product

line.online

Redeemable coupon at
customer service desk for
online purchase

All

Item(s) not available in store.

Exclusive Online Products

displayed in-store

All

Customer wary or unsure of

quality or product
specifications

Option of in-store pick-up

from online ordering

26-45

Shipping costs and problems

Exchange of equal or lesser

value

18 and over

Shopping costs and

unsatisfied with online
purchase

Service (cont.)
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Solution

Target Demographic(s)

Problems Addressed

Kiosk

Less than 18

Lack of credit (cannot

purchase online)
Mobility to store

Kiosk

18-25

Lack of credit

Kiosk

26-32

Identity theft concerns.

Possible bad credit

Kiosk

35-45

Identity theft concerns.

Kiosk

Over 45

Identity theft concerns.

Technological Access.

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