With the explosion of online commerce, multi-channel strategy has become the watchword for revitalizing communication and boosting sales. But while it offers considerable opportunities, it is not without its challenges, especially for brands that sell their products through mass retailers.
The advent of e-commerce has opened up new avenues for businesses, but it has also turned traditional marketing methods on their head. This transition to multi-channel requires internal strategic adjustments, and each decision involves risks as well as potential rewards.
In this article, we invite you on a journey to the heart of multi-channel marketing strategy! We'll be assessing the benefits and risks, and zooming in on the specific challenges facing supermarket brands.
Imagine all the ways you could reach your customers: in-store, online, by email, or even at a trade show! Well, multi-channel marketing is all that.
More precisely, a multi-channel marketing strategy consists of promoting and distributing products or services through different channels.
Traditionally, the distribution channel has been seen as the distribution circuit, i.e. a series of intermediaries separating the manufacturer from the consumer. But today, with the rise of digital technology, the term encompasses all channels, both traditional and digital.
Traditional channels often include in-store sales, trade shows, SMS campaigns and telemarketing. In the digital sphere, we find e-commerce, social networks and emailing.
Based on the analysis of the buying journey, the advantage of multi-channel is that it targets every potential source of sales. For companies, it's a godsend to reach more people, by exploring new means of communication, and thus to unearth new targets or new ways of buying. In short: more channels, more opportunities!
The web arrived two decades ago, and since then, connected devices have taken our homes by storm. In fact, 63% of French people claim to have one in their home. This digital shift has shaped new purchasing habits and behaviors. But here's a surprise: despite the explosion in online shopping, in-store sales are holding up well, and the French still spend a considerable amount of time in physical stores, starting with supermarkets.
Each purchasing channel responds to a specific desire, question or need. The same consumer may appreciate the assistance of a face-to-face salesperson, and still want to read user reviews on the Internet. A good example of the multiple levels at which your marketing strategy operates!
Brands that want to maximize their sales are now devising complementary marketing approaches between their web marketing and the animation of their physical points of sale.
Multi-channel is seen as the multiplication of sales opportunities. But there are some strategies that can further enhance the benefits:
Cross-channel and omnichannel strategies are the logical evolution of multichannel. Their aim is to better control costs, make the user experience more fluid, and avoid competition between different channels.
The world of retail has evolved, and so have your customers. They now juggle the Internet and physical stores like professionals. As a manufacturer, you can reap many benefits by deploying a multi-channel strategy in line with your distribution strategy.
If multi-channel is about taking market share, your approach will largely be shaped by your distribution agreements.
Indeed, if you use distributors, the first step is to check what is stipulated in the clauses of your distribution contracts. If you have agreed not to sell your products directly, including via e-commerce, your multi-channel strategy will try to encourage conversions at your commercial partners' points of sale. You can then measure the effectiveness of your multi-channel strategy by the evolution of your in-store presence. And if you see an increase in the number of products on your shelves, it's because your multi-channel strategy is paying off! That's why brands are equipping themselves with retail-optimized CRMs to make the difference.
Otherwise, if your agreements allow it, go for direct sales, including online. The trick is to deploy new channels that enable you to sell more without affecting your existing channels. The aim here is to increase consumption potential by reaching new targets or making additional sales that would be more difficult or costly to achieve in stores.
Whether you sell direct or only indirectly to your customers, multi-channel marketing is an immense lever for visibility and efficiency, because it enables you to communicate wherever your different audiences are.
You can then use your channels according to your different marketing objectives:
This multi-channel approach enables you to adapt your customer relations to your customers' digital behaviors and offer a user experience in line with their expectations.
As with marketing, data is at the heart of multi-channel strategy. Even if 100% of your revenues are generated in supermarkets, using your own communication channels enables you to collect customer information that belongs to you, also known as "first-party data", which you won't have to negotiate with your distributors. This offers you a new way of analyzing your customers' expectations and improving your marketing strategy, independently of what's happening in-store.
Last but not least, multi-channel marketing has the advantage of preparing you for economic change. Companies that had already embarked on their digital transition were more resilient to the Covid19 crisis.
And by keeping an eye on evolving buying habits, multi-channel marketing could well lead you towards a new channel, one that's still shy today, but which could come to the fore in the long term.
But deploying a multi-channel strategy also entails risks and constraints that you need to be aware of. Here are just a few of them:
For a traditional industry with a distribution-oriented culture, going digital implies an evolution in your strategy that comes with its share of changes: corporate culture, vision, brand image, skills... This revolution can be facilitated by external support aimed at modernizing governance and operations.
By putting your channels in competition with each other, the risks of wastage can be high, and a poor grasp of the overall strategy could result in the opposite of your objectives: a drop in sales.
Deterioration of partner relations
As explained above, existing agreements with your distributors may pose challenges to the deployment of a multi-channel strategy. Both contractual and relational aspects need to be taken into account.
This is one of the difficulties most commonly cited by the marketing departments of major brands. When different channels have contributed to a common result, it can be complicated to assess the weight and ROI of each channel, and therefore to identify the relevant levers.
If your channels are also circuits, for example if you're launching an e-commerce business, distribution can generate new operating costs that need to be measured upstream.
Since multi-channel marketing aims to address different targets with different uses, there is a risk of trying to adapt marketing methods too much, at the risk of blurring the brand image.
Deployed in-house, this strategy can cause your payroll costs to soar. Outsourced, it involves managing multiple service providers, with all that this can imply in terms of risks and deadlines.
Whether you're an SME or a large corporation, here are the key steps you can take to deploy your multi-channel strategy.
Collect and analyze as much data as possible to define your buyer persona(s) (age, gender, profession, consumer habits, digital behavior, etc.). Who are they? What are their tastes? The more you know, the better.
By knowing your target audience, you'll know which channels to use to reach them.
Think long-term (cost of acquisition, number of sales, percentage of digital sales, etc.) and short-term (tool design, website traffic, etc.).
Define the means, resources and tools needed to deploy your strategy, making sure you assess the skills you have in-house, and those you'll need to find externally.
Before diving in headlong, test your ideas. To optimize your marketing spend, it's a good idea to allocate 10-20% of your campaign budget to an initial marketing sequence. This will enable you to compare results by channel, and increase the proportion of the budget reserved for the most profitable channels.
The reporting of your campaigns must be thorough. As we saw above, sales volume is important, but it's far from sufficient. Compare channels by effectiveness, and find out whether the overall strategy is the right one.
A multi-channel strategy is like a good recipe: every ingredient counts. When well executed, it can really help you increase sales, or pursue other marketing objectives, such as visibility or image.
The convergence of online and in-store actions can boost these results, provided the impact is measured. In fact, for companies working through the mass retail sector, partner agreements and global strategy mean that multi-channel issues need to be carefully assessed in order to get the most out of it.
