Overcome Channel Conflict: How Ecommerce Can Support Your Traditional Salesforce
Michael Johnson | May 30, 2018
As digital channels bring in more direct sales for brand manufacturers, it’s not uncommon to get concerns, pushback, or confusion from your traditional internal salesforce. They have quotas and relationships with brick-and-mortar stores to protect and may be worried that their territory will suffer if too much of the business is pushed online. However, the opposite is more often true.
It's not just consumer who are driving the digital transformation. Business buyers want the option to browse and purchase online. For example, Amazon Business, a business marketplace launched in 2015, reached one million customers in 2017. It offers buyers a consumer-like shopping experience including shared purchasing through a corporate account, guaranteed shipping, and detailed online product information. If you are considering expanding to Amazon Business or other digital portals, the fear of channel conflict can be an internal hurdle to overcome.
Put simply, offline sales will suffer without a strong digital footprint. According to a Forrester Research, $1.26 trillion of local retail sales were influenced by digital media. For your business to survive (and thrive!), you have to overcome the misconceptions around channel conflict. Find ways to incentivize your salesforce to support digital channel growth, by eliminating any fear that they will miss out on sales revenue or let down retailer partners by supporting digital. Here are three common channel conflict myths, debunked.
Myth 1: Ecommerce sites will cannibalize profits from your offline channels.
It is common for manufacturers and brands to shy away from ecommerce when they perceive it is in conflict with their other, more established channels. Being successful online requires brands to take more direct ownership over their pricing, logistics, and merchandising strategies. Each of these tactics require an investment that on the surface don’t seem to support offline sales relationships. But bear in mind, the average consumer's shopping experience begins on a mobile phone. Building out your digital presence boosts discoverability of and consumer confidence in your product catalog that will drive sales regardless of where a shopper ultimately makes the purchase.
Reality: There is enormous risk in not going digital. In 2018, only 15% of large, established manufacturers lack direct-to-consumer eCommerce channels. Forrester Research reported last year that eCommerce is set to grow by a whopping 30% by 2022, from 13% of total U.S. sales in 2017 to 17% in 2022. Even more optimistic are the figures reported by the U.S. Census Bureau's February report on online sales; it found that the total share of eCommerce sales has grown 15-17% in the last year alone. If your business does not invest in ecommerce, you brand is losing ground to every digital upstart or competitor in your category that is building out their direct-to-consumer, digital channel.
Myth 2: A multichannel sales strategy will weaken your brand story.
It may feel like selling on Amazon and other third-party retailer sites opens your brand up to risk of dilution. Providing other sites your product information doesn’t make it more confusing for customers but easier. Provide a detailed, comprehensive, and accurate listing on every site you can. By expanding your digital footprint, you increased the likelihood your products are found and bought.
Reality: It’s not about your brand story. It’s about your customer’s experience. The very purpose of a multi-channel sales strategy is to capitalize on the increased product visibility and consumer access provided by each unique outlet. A multichannel strategy feeds consumer demand for information no matter where they shop.
Myth 3: There’s no accurate way to measure how a salesforce or distributor contributed to online revenue.
Your team may worry that a website is going to get a disproportionate amount of credit for sales that were influenced by offline sources. Some brands that are flipping this fear on its head and giving credit offline when online sales are made. One model to consider is to use the geographic territories you've already established and apply them to online sales as well. For example, if a buyer purchases from Amazon Business, credit the salesperson or distributor in the buyer’s geography with the sale. This evens the playing field and removes any friction that a local offline retailer might have had in directing buyers online for more information about a product or delivery for a product that they may not have in stock.
Reality: If your think holistically, you can act holistically. A hyper focus on channel specific ROI create problems for businesses in the long-run. Build the experience a consumer wants, and align your entire organization around the shopper’s needs rather than an old-world compensation model. Operating in a digital world requires the adoption of product experience management across the entire organization. Create and centralize the most accurate, compelling information about your product. Syndicate that content to meet the requirements of every channel your consumers are looking for it -- retailer sites, direct-to-consumer sites, search engines, social media sites, review sites and more. And finally align your operations to quickly learn from and iterate on that process so your content is optimized based on consumer behavior, channel feedback and market forces, so you win the sale every time.
The bottom line: Online influences in-store tremendously. You can't have an effective brick strategy without a click counterpart. Communicate out these realities of the digital age with your salesforce and adjust the internal incentives so that digital and physical channels can align to meet customer demand and deliver winning product experiences.