Contentious Channel Conflict Cures
by Jared Asher
Channel conflicts are never fun. They occur whenever the market changes or companies experience declines in the profitability of their traditional distribution channels.
Today we are faced with monumental changes in sales and distribution chains. Catalog sales are now approaching $100 billion per year. Internet sales are experiencing an extremely steep growth curve and will reach $100 billion very soon. Compared to the $2 trillion retail market, these figures seem insignificant. Nonetheless, if we look at their rates of growth, we can see these channels are changing the way consumers buy products.
Corporate View must aggressively exploit these new channels and pull its share of the profits from them. Business people in traditional channels, of course, will naturally feel threatened by the catalog and Internet channels, or any other channel they perceive as competition.
No reliable research suggests traditional retail channels will be dramatically affected by these new channels. Perhaps we are looking at a simple case of an expanding retail pie creating more opportunity for everybodyecommerce and brick-and-mortar stores alike. Then again, ecommerce companies like Amazon.com could be killing their brick-and-mortar competition.
The truth is, we don't know to what extent ecommerce will affect retail merchants. In any case, our retail and wholesale channel partners continue to be very apprehensive. We must communicate with them and make sure they know we too want to resolve these channel conflicts. They need to know we are listening to them and will address their concerns.
Research suggests that ecommerce customers are more loyal to their favorite ecommerce sites than they are to brick-and-mortar stores. If this is the case, why can't promotions at our ecommerce site entice customers to visit our brick-and-mortar partners? This could present a great cross-marketing opportunity!
For example, we are creating an ecommerce site to promote and sell the AltaView mountain bike on the Web. Why not feature each independent bicycle dealer (IBD) and Corporate View Lodge store on the Web site? We can create links to IBD Web sites or provide exciting Web pages for each IBD highlighting its helpful service department, experienced service technicians, great selection of merchandise, and convenient location. We can post biographies of the staff members. We can even provide custom, computer-generated maps at the ecommerce site showing customers how to drive from their houses to the nearest IBD. Here are some other ideas:
This mix of ideas takes advantage of the marketing layer of the ecommerce Web site and pulls the IBDs into the sales chain. These strategies could help customers feel the same loyalty for our stores as they do for our ecommerce site. After all, with a product like a mountain bike, wouldn't you want to ride it first before you buy it? Only the IBDs can provide a hands-on experience with the bike.
Many more ideas remain to be explored regarding the merging of ecommerce with brick-and-mortar stores. I emailed all our area sales representatives (ASRs) and received suggestions from them. These ideas could help us resolve some of our perplexing channel conflicts.
We need to be optimistic about the future! I think these new channels can actually help our traditional channels in the pre-selling, selling, and post-selling phases of the sales process. My guess is traditional retail brick-and-mortar stores will continue to flourish and will benefit from the added marketing the Web, telemarketing, catalog, and direct marketing campaigns can provide. These new channels can actually bring more customers into traditional stores if the advertising mix is focused correctly.
Our challenge is to sell this optimistic vision of the future to our traditional channel partners. If you have any additional suggestions, email me at JAsher@corpview.com.