The internet represents significant operational, marketing, and growth opportunities for retailers, wholesalers, and manufacturers, but the strategic challenge has rapidly evolved from “which channels do we embrace?” to “how do we create channel synergy?”
Operationally, a “multichannel” orientation integrates systems, strategies, and business processes to generate new efficiencies. At Blair Corporation, a publicly traded apparel and home furnishings retailer, we leveraged our ability to cost-effectively promote out-of-date merchandise through our hyper-growth Blair.com business to increase gross margins and eliminate a costly and unproductive offline liquidation channel. A multichannel retailer with a more significant brick and mortar presence—such as Best Buy, for example—should integrate its systems so that customers can order online and pick up their selections in a local store. In both examples, metrics such as ROI, profitability improvement, and customer loyalty will validate success.
From a marketing standpoint, this philosophy must become synthesized in the organization’s DNA. Beyond the clear strategic commitment, however, a comprehensive tactical plan is also required to achieve consistent and effective messaging across an expanding array of channels, which may include:
Brick and mortar locations
TV and radio
Outdoor and event marketing
Websites (traditional, mobile, and tablet)
But a word of caution: although strategically synchronizing these B2C/B2B touchpoints drives significant financial benefits, this process presents a unique set of operational, technological, marketing, and strategic complexities. To respond to these challenges and drive measurable results, a number of strategic questions must be considered.
At the outset, B2C and B2B marketers must determine how to take full advantage of each channel’s unique advantages. One best practices approach is to incorporate the web’s inherent ability to cost-effectively promote the company’s entire assortment of product or service offerings. Consider the opportunity to include special sections highlighting out-of-season, obsolete, or even less desirable items. In the brick and mortar environment, this approach is typically cost-prohibitive. In the online world, however, the “real estate” is essentially free, and this expanded merchandising strategy can attract new customers, increase average order, improve gross margin, and convert unproductive inventory into cash.
Because the customer is the cornerstone, it must also be recognized that in nearly every case, the most profitable customer is the one who utilizes and is influenced by more than one channel. Although the purchase may be consummated on a traditional website, the customer’s ability to see the product in person or gather valuable information via social media channels may have been a prerequisite to consummating the sale. By fully understanding these interrelationships and confirming which customer segments are the most profitable, we can determine how to cost-effectively attract more of these influential profit-drivers through their preferred mix of channels.
By combining operational efficiencies, integrated go-to-market strategies, big data analytics, and professional management, forward-thinking organizations can create and exploit a competitive advantage through multichannel integration. Well conceived, this approach will drive growth, recapture lost market share, improve profitability, and maximize shareholder value, while further strengthening the firm’s ability to adapt to a marketplace that increasingly requires a more comprehensive approach to business strategy and competitive positioning.