Channel Strategy – Gateway to Success

When we say Strategy – The Game of Choices. Is Channel Strategy the same or is it following Rulebook. Let`s Explore:

Historically organizations have enjoyed the advantages of geographic constraints and information asymmetries to “push” product and service offerings to the customer.

·        With the invent of Internet and it`s multifold growth. It has provided customers with the ability to seek real-time, transparent information regardless of geography

·        Emerging technologies including mobile handheld devices and wireless networks have created any-time access for customers to enquire, purchase and seek support for products and services

·        The rise of social media has provided customers with an unprecedented ability to exercise word of mouth effect – to learn, recommend and have a voice on their own service experience.

The result is a market whose customers are more sophisticated, more demanding and more empowered to negotiate the purchase decision that is right for them.

Most importantly, what is the essence of any business? Customer right, but how do you define your customer.

But is doing STP enough?

·        Value Proposition - Understand the Value of Your Product to the Customer

·        Generate Consumer insights or wear consumer shoes to understand hidden needs of the consumer.

·        Map your Internal Strength

·        Competitor analysis

 

To arrive at Channel strategy let`s explore the two most important aspects channel provide:

A.   Information Delivery to your customers

B.   Order Fulfillment

Now let`s link:

Channel`s above mentioned 2 most critical things  WITH Value Proposition , consumer insights , Internal Strength and competitor analysis to arrive whether do we really need / can afford channel or go alone would be right.

If Channel is must – then what kind is the next question?

 

Channel Options:

Gone are the days when we define channel or touch point to customers as only traditional channel or as only online i.e. Pure play.

Let`s explore this 2/2 matrix which says out of the various reason for which channel exist 2 are the prime.

a)    Information delivered to customer:

Let`s put it on Y axis – The information to the customer can be delivered through offline mode i.e. through traditional brick & mortar way OR through online or Website.

b)   Order fulfillment to customers:

Let`s put it on X axis – Order fulfillment or delivery can be done by customer himself / herself like we do it through brick & mortar OR can be done by channel at customers place.

From this matrix 4 kind of channel or touch point can be defined:

1.    Traditional: Brick & mortar

2.    Shopping & Delivery Hybrid: Convenience of shop online (Y Axis) & go and pick up directly(X-Axis) if you are who someone don’t want to enter into hassle for waiting for article to get delivered.

3.    Online Retail plus showroom: Information is delivered through offline mode i.e. customer visit only for trial/feel of products at shops or showroom, and the order fulfillment would be done at your place like Lenskart.

4.    Pure-Play: Information delivered online and order fulfillment at customers place.

 Organizations can pick any one, two or all channel option for the success.

 Which channel option / options to pick?

Multiple factors can decide this like: 

Consumer insights

Competitor analysis

Organization`s Internal Strength

Product Life cycle etc.

 

This is also true that customers are now Omnichannel in their thinking & behavior. Sellers need to be as well. Omnichannel features initially perceived as `` nice add-ons `` are becoming ``must -haves``. The question for sellers is no longer whether to operate an omni channel strategy, but how to implement it most effectively is the ultimate goal.

Organization can fix the goal of Omnichannel, but with constraints in business can start with one or two and gradually increase the level to all or Omnichannel.

Picking the right integrated channel along with good customer experience – Killer Winning Strategy.

In the end measure the effectiveness of each channel point. (Out of scope of this blog)

 

Recommendations:

Technology & interactions with the customers is changing rapidly. Organizations need to keep pace with change and adjust to meet their changing customer requirements. However, acting without a plan and an understanding of new channels can result in sub-optimal results adversely affecting overall company performance. Multi-channel across all channels is not the right approach for every organization. Strategic choices are required.

Class Knowledge from Proff. Shaphali Gupta