The challenges of multichannel strategy for retail brands

With the explosion of online retail, a multichannel strategy has become the key to revitalizing communication and boosting sales. However, while it offers significant opportunities, it is not without its challenges, especially for brands that distribute their products through mass retail.

The advent of e-commerce has opened up new avenues for businesses, but it has also disrupted traditional marketing methods. This transition to multichannel requires internal strategic adjustments, and each decision carries both potential risks and benefits.‍

In this article, we invite you to embark on a journey to the heart of the multichannel marketing strategy! We will evaluate its strengths, its risks, and take a closer look at the specific challenges faced by brands distributed in large supermarkets.

Multichannel strategy: marketing definition

Imagine all the ways you could reach your customers: in-store, online, via email, or even at a trade show! Well, multichannel marketing is all of that.

More precisely, a multichannel marketing strategy consists of promoting and distributing products or services through different channels.‍

Traditionally, the distribution channel was akin to the distribution network, meaning a series of intermediaries separating the manufacturer from the consumer. Today, however, with the rise of digital, this expression encompasses all channels, both traditional and digital.

Among traditional channels, we often find physical store retail, trade shows, but also SMS campaigns or telemarketing. In the digital sphere, we find e-commerce, social media, and emailing.

Based on the analysis of the purchasing journey, the advantage of multichannel is targeting every potential source of revenue. For businesses, this is a windfall to reach more people by exploring new communication methods, and therefore, finding new targets or new ways to buy. Simply put: more channels, more opportunities!

Online and offline convergence

The web arrived two decades ago, and since then, connected devices have taken our homes by storm. In fact, 63% of French people declare they own one. This digital shift has shaped new behaviors and purchasing habits. But, surprise: despite the online shopping boom, in-store sales are holding up, and French consumers still spend a considerable amount of time in physical stores, starting with mass retail.

‍Each purchasing channel responds to a specific desire, question, or need. The same consumer might appreciate face-to-face assistance from a sales associate while also wanting to read user reviews online. This is an example that clearly illustrates the multiple levels at which your marketing strategy operates!

‍Thus, brands that want to maximize their sales are now designing complementary marketing approaches between their digital marketing and the promotion of their physical points of sale.

‍Cross-channel and omnichannel: for optimized multichannel

Multichannel is considered the multiplication of sales opportunities. However, certain strategies can further enhance its benefits: 

• Cross-channel allows you to create bridges between your different marketing and communication channels. Since your customers have varied desires and behaviors, this technique allows them to navigate from one channel to another according to their needs.
  It is a fact: no customer is single-channel. Becoming more effective requires allowing consumers to switch from one touchpoint to another to convert according to their own habits. For example, a web user discovers a product online, locates the store where it is available, and goes there to buy it.
  This is referred to as ROPO (Research Online, Purchase Offline). In mass retail, the drive-through model illustrates this idea best, as it combines online ordering with in-store pickup.

• Omnichannel goes further than multichannel and cross-channel by connecting all channels to foster the emergence of a single, unified sales journey—meaning, making all touchpoints converge into the same sales funnel. The goal: to offer a smooth and unique purchasing journey.

Cross-channel and omnichannel strategies are therefore logical evolutions of multichannel. They aim to better manage costs, streamline the user journey, and avoid putting different channels in competition with one another.

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The benefits of multichannel for brands in mass retail

The retail world has evolved, and so have your customers. They now juggle between the internet and physical stores like pros. As a manufacturer, you can reap many benefits from this by deploying a multichannel strategy aligned with your distribution strategy.

Increased sales

While multichannel aims to capture market share, your approach will largely be shaped by your distribution agreements. 

Indeed, if you go through distributors, the first step is to check what is stipulated in the clauses of your distribution contracts. If you have committed not to sell your products directly, including via e-commerce, your multichannel strategy will attempt to drive conversions in your commercial partners' points of sale. You can then measure the effectiveness of your multichannel strategy by the growth of your in-store presence. And if you see an increase in your products on the shelves, it means your multichannel strategy is paying off! This is precisely why, to make a difference, brands are equipping themselves with CRMs optimized for distribution.

Otherwise, if your agreements allow it, launch into direct sales, including online. The trick? Deploy new channels that allow you to sell more without hurting your existing channels. The goal here is to increase consumption potential by reaching new targets or generating additional sales that would be more difficult or costly to achieve in-store. 

Brand awareness, brand image, and customer relations

Whether you can sell directly or only indirectly to your customers, multichannel marketing is a massive lever for visibility and effectiveness, as it allows you to communicate wherever your various audiences are.

You can therefore use your channels based on your different marketing objectives: 

• Brand awareness

• Acquisition

• Customer satisfaction

• Retention

• Etc.

Multichannel thus allows you to adapt your customer relations to your customers' digital behaviors and offer a user experience that meets their expectations.

Data management: multichannel at the service of customer insights

As in marketing, data is at the heart of the multichannel strategy. Even if 100% of your revenue is generated in mass retail, using your own communication channels allows 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 to analyze your customers' expectations and improve your marketing strategy, regardless of what happens in stores.‍

Vision and economic shifts

Finally, in the same vein, multichannel has the advantage of preparing you for economic changes. Businesses that had already begun their digital transition were better able to withstand the Covid-19 crisis. 

And by keeping an eye on changes in buying habits, multichannel marketing could very well direct you toward a new channel, still emerging today, but which could establish itself in the long term. 

Risks and drawbacks of multichannel

Be careful, deploying a multichannel strategy also involves risks and constraints that must be measured. Here are a few: 

Company culture

For a traditional industry whose culture is distribution-focused, developing digital implies an evolution in your strategy that comes with its share of changes: company culture, vision, brand image, skills... This revolution can be facilitated by external guidance aimed at modernizing governance and operations.

Cannibalization

By putting your channels in competition with one another, the risks of loss can be high, and poor management of the overall strategy could lead to the opposite of your goals: a decrease in sales.

Damage to partner relations

As explained above, existing agreements with your distributors could pose challenges to the deployment of a multichannel strategy. Contractual and relational aspects must be taken into account.

Attribution

This is one of the most commonly cited difficulties by marketing departments of major brands. When different channels have contributed to a common result, it can be complicated to evaluate the weight and ROI of each channel, and therefore to identify the relevant levers.

Logistics

If your channels are also physical networks—for example, if you launch into e-commerce—distribution can generate new operating costs that will need to be measured beforehand.

Strategy consistency

Since multichannel aims to address different targets with different behaviors, there is a risk of wanting to adapt marketing methods too much, which can blur the brand image.

Cost management

Deployed internally, this strategy can cause your payroll costs to skyrocket. Outsourced, it implies managing multiple service providers, with everything that entails regarding risks or delays.

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How to implement your multichannel marketing strategy

Whether you are an SMB or a large enterprise, here are the key steps you can follow to deploy your multichannel strategy.

1. Define your buyer personas

Collect and analyze as much data as possible to define your buyer persona(s) (age, gender, occupation, consumption habits, digital behaviors, etc.). Who are they? What are their tastes? The more you know, the better.

2. List the relevant channels

By knowing your target audience, you will know which channels to use to contact them.

3. Define your goals 

Think long-term (acquisition cost, number of sales, percentage of digital sales, etc.) and short-term (tool design, website traffic, etc.).

4. Design the strategy and execution

Define the means, resources, and tools necessary to deploy your strategy, making sure to assess the skills you have internally and those you will need to find externally.

‍5. Run a pre-campaign

Before diving in head first, test your ideas. To optimize your marketing spend, it is advisable to allocate 10% to 20% of your campaign budget to an initial marketing test. This will allow you to compare results by channel and increase the share of the budget reserved for the most profitable channels.

‍6. Evaluate your multichannel campaign

Your campaign reporting must be thorough. As we saw earlier, sales volume is important but far from sufficient. Compare channels by efficiency and seek to find out if the overall strategy is correct.

A multichannel strategy is like a good recipe: every ingredient counts. When executed well, it can truly help you increase your sales or pursue other marketing objectives, such as visibility or brand image.

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The convergence of online and in-store actions can boost these results, provided, however, that you measure their impact. Indeed, for companies that distribute through mass retail, partner agreements and overall strategy make it necessary to carefully weigh the challenges of multichannel to make the most of it.