Page 445 - Foundations of Marketing

412 Part 5 | Distribution Decisions

Online Retailing
Zappos is an online retailer of
numerous products, including
shoes, clothing, accessories,
jewelry, eye wear, and beauty
products.

NetPhotos/Alamy

eyeglass prescriptions, and even purchase gourmet products. Banks and brokerages offer
consumers online access to their accounts, where they can perform a wide variety of activi-
ties, such as money transfers and stock trading. While online retail sales account for less than
10 percent of total retail sales, the segment is growing rapidly. Forrester Research projects
18
that online retail sales in the United States will climb to nearly $ 327 billion by 2016, up from
19
$ 202 billion in 2011. With advances in computer technology continuing and consumers ever
more pressed for time, online retailing will continue to escalate.
Online security remains a serious concern, even as more people than ever choose to shop
online. Many shoppers remain hesitant to use smartphones and other devices for shopping.
In a survey conducted by Wakefi eld Associates for Accertify Inc., 88 percent of participants
said that they shop online, and two-thirds of respondents stated that they believe shopping
online is more dangerous than in-store shopping in terms of identity and credit card theft. Only
7 percent of respondents trust their smartphones for shopping, and only 3 percent trust their
tablet computers. The survey also found that, surprisingly, older consumers are more trusting
of online shopping than younger ones.
20
Direct Selling

Direct selling is the marketing of products to ultimate consumers through face-to-face
sales presentations at home or in the workplace. The top five global direct selling compa-
nies are Avon, Amway, Herbalife, Natura Cosmeticos, and Vorwerk & Co. Three of these
companies, Avon, Amway, and Herbalife, are based in the United States. Direct selling is a
highly valuable industry. Avon alone has nearly $ 11 billion in annual sales. Direct selling
21
was once associated with door-to-door sales, but it has evolved into a professional industry
where most contacts with buyers are prearranged through electronic communication or per-
sonal contacts. Today, companies identify customers through the mail, telephone, Internet,
social networks, or shopping-mall intercepts and then set up appointments with salespeople.
Direct selling is most successful in other countries, particularly collective societies like China,
direct selling Marketing
products to ultimate consumers where Amway has higher sales than its domestic market, the United States.
through face-to-face sales Although the majority of direct selling takes place on an individual, or person-to-person,
presentations at home or in the basis, it sometimes also includes the use of a group, or “party,” plan. With a party plan, a con-
workplace sumer acts as a host and invites friends and associates to view merchandise in a group setting,

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.