Historically channel marketers have leveraged COOP advertising or Marketing Development Funds (MDF) to stimulate channel partner engagement in marketing to drive demand. However, in doing so this is difficult to execute and measure success. Not to mention the paperwork process and claim/reimbursement duration these funds often go unused or if they do, it comes with an expensive price tag to manage.
Digital Not a Focus for Brick & Mortar Dealers
Channel partners often give marketing very little attention. In some respects, they are justified for doing so. A small business can rely on word of mouth and the marketing efforts of the brands they carry to find new opportunities. Customers are either referred by previous customers or find their way to the channel partner through networking, which is easier, lower cost, and more effective way of obtaining new business.
Often local retailers lack sophisticated online platforms capable of converting consumers preventing your channel partners from correlating the relationship between digital marketing spend or their time and ROI. In short, your dealers will never fully be committed to implement these programs. Plus even if transactions were to happen on a channel partners website you have no way of tracking conversions to justify marketing spend.
Retailers are instead investing more into sales training for store associates and in-store technology that will keep customers coming back to their store front versus the one-time hit of digital advertising, which is becoming more expensive to acquire consumers as online advertising skyrockets in price and wanes in effectiveness.
Online to Offline: A Perfect Partnership
As retailers invest in their brick and mortar stores, which the National Brand requires to be successful. After all, 9 out of 10 sales still occur at physical retail. It only makes sense to have National Brands invest and execute where their local brick and mortar retailers are weak, which is online and story telling to drive interest and demand.
But collecting all these sales directly and not involving your retailers is a short-sighted strategy that has long-term implications on your future sales pipeline. Today’s consumer path to purchase is anything but linear, and what I mean by that is that they cross-channel shop between multiple sales channels including physical retail. If they cannot validate your product or if you do not have the volume of product physical retail provides, you have less chance of your brand being exposed to new consumers. It might surprise you that most online sales occur in and around a brick-and-mortar storefront for your brand. In fact, brands with an offline presence in an area has up to 10X lower customer acquisition costs. Literally, offline retail is fuelling online sales.
To continue to grow online sales, brands must partner closer with their retail partners or risk isolation in the form of cheaper overseas private labels or a competitive brand.
Introducing Omni-Channel for Retail Brands
Omni-channel commerce for National brands allows manufacturers a new path forward to sustainable grow their online and wholesale channels simultaneously. In this approach, national brands can leverage online sales to further develop relationships with their accounts and fuel customer loyalty while obtaining a feedback loop as to how to lower their online acquisition costs. Omni-channel brands can digitally impact everyone in the organization from marketing, sales operations, and sales teams improving insights and productivity.
With omni-channel sales brands sell online with local dealer fulfillment with either store pickup or local dealer delivery to the consumers home. By working in concert, national brands and their dealers can give consumers the best of online and offline shopping while generating more insights to leverage in sales operations and engage more frequently with their best customers to keep their spot in store secure to be discovered and bought by more consumers. In doing so, retail brands can continue to attract new customers to discover its products in-person and lead to elevated online sales.
Channel Partner Opportunity
Rather than looking at eCommerce as a direct channel or a threat. It should be viewed through the consumers lens which caters to convenience and personalized service. The need to support your best customers, which are dealers, continues to remain a top priority as evidence mounts a direct to consumer only approach is unsustainable.
Channel marketing and determining the non-linear customer path to purchase has become increasingly more complex for National brands. But one thing is certain, balancing your sales channels and rewarding key dealers to continue to support your brand by recognizing they are generating online sales goes a long way towards one of the main competitive advantages, which is customer relationships.
Want to learn more about how your company can sell online and avoid channel conflict? Or wanting to learn more about the strategy on how you can get closer with your best customers? Feel free to download our omni-channel white paper that distills everything down to assess if this is the right move for you with case studies.
