Multichannel strategy and E-Commerce
Since the Internet established itself as a communication platform in the mid-1990s, the retail trade has changed significantly. More and more consumer activities are finding digital points of contact on the Internet, and more and more companies are offering products via online platforms, their own shops or marketplaces. Multichannel trade is the marketing form of the 21st century, which offers new challenges. This article shows which strategies will make your multichannel trade successful. The E-commerce Institute will be happy to support you in the development and implementation of the multichannel strategy. We look forward to hearing from you at info@ecommerceinstitut.de.
The winner of this development is clearly the consumer, because new offers and channels have been added to existing sales offers, and a great variety has emerged. Although the previous purchasing channels have not yet been displaced by the online channel, a shift in sales shares from the stationary channel to the online channel is clearly discernible. This pure empirical evidence is not the only reason to think about combining existing and new sales channels. Above all, it is the entrepreneurial design options with their rich prospects that are a reason to take a close look at the multi-channel strategy.
Multichannel strategy and the trends of digital transformation
A successful multichannel strategy picks up above all the trends that are decisive for the digital transformation. Digital transformation as a fundamental structural change is characterized by several central trends. The first of these trends is the use of the Internet as an access point to an almost inexhaustible amount of information. Consumers experience a high degree of transparency and use a wide range of comparison and evaluation options for products and providers. The second process is the active participation of consumers in the communication about products and offers. The term “Web 2.0” stands for this development of “social media”, which has heralded the end of the classic mass media. One phenomenon in which this trend is particularly evident is the video platform YouTube. The third trend is the mobilization of the Internet and its development into a constant companion for more and more users who rarely give their smartphones or tablets out of their hands. Finally, another trend is yet to emerge: more and more devices, machines and applications are being digitalised and networked – beyond computers and communication devices – and the “Internet of Devices” is just around the corner.
Multichannel strategies and the success factors of Google, Facebook & Co.
A successful multichannel strategy picks up on these trends, because they stand for a changed consumer behaviour against the background of new technologies. A focused look at leading companies in the digital economy such as Google, Facebook, Amazon & Co. Their very dynamic growth can be explained above all by the consistent implementation of central success factors of digitalization.
One of these factors is the differentiation of products and services and the simultaneous scaling into markets that have become larger due to the Internet. The Whatsapp communications platform is a very good example of this. Another factor takes into account the increased transparency on the Internet: Customer Centricity always gives priority to customer interests, so that customers can report on excellent service online and inspire more customers to take up an offer. The “chief witness” of Customer Centricity is above all Amazon, whose strategy always starts with customer needs and tailors everything else to them. Customers and their behavior are also the focus of the next success factor: Data Driven Marketing systematically analyzes customer and marketing data and uses data to put corporate management on a broader basis. Facebook is probably a very obvious example of this. Finally, the consistent use of innovative technologies is another factor that has made leading Internet companies – such as Apple – successful.
Implementation of the multichannel strategy
What do these aspects mean for a successful multichannel strategy? The first step in differentiating business models is to select the sales and communication channels that reflect customer expectations and the strategic focus of the company. If premium-quality customers are to be reached, this must also be reflected in the service-oriented offering of several communication channels such as retail outlets, the Internet and telephone contact options. Quality oriented customers in particular are likely to have a greater desire for direct contact with the company. Here, the use of new technologies, such as modern CRM systems, is particularly helpful in linking and integrating channels efficiently, so that not only is a holistic customer experience created, but it is also economical.
The combination of channels should above all take into account the aspect of specialization and scaling through greater online reach. First of all, the product and service offering must be further developed in the direction of a USP in order to scale this feature in as many communication and sales channels as possible. In doing so, new customer groups can be won without losing existing ones by combining new and old channels. This approach is also known as a “longtail strategy” and can turn a small topic in the stationary sales channel into a big topic online.
The aim must still be to achieve a high degree of customer loyalty through attractive offers in the channels preferred by the target group, which leads to a high customer lifetime value. The ongoing measurement and management of customer lifetime value as part of data-driven marketing rounds off the reorientation of the multi-channel strategy. How often does the customer contact the company, how often do they make purchases and how much do they spend? These are the key questions for managing sustainable customer relationships.
The digital transformation is a major, fundamental structural change. In order to be able to shape it, it is very important to focus on a few controllable success factors. The factors discussed in this article – specialization and scaling, technology, data driven marketing and customer centricity – offer such a focus and numerous opportunities to make established companies and business models successful in the digital world.