If you’re like many Luzern clients, your industry is changing at a pace that's never been seen before. Whether you feel this through tighter margins or through competition from non-traditional channels, odds are that your brand - distributor - customer relationship has evolved and you're having to look at new ways to drive significant sales and revenue.
Customers today are going online to buy everything from coffee pods to cars, but every online channel is different and is not right for every brand. Complicating this picture is the fact that your company has worked for years with its distributors and retailers, so it's normal you're worried about channel conflict. What will happen if you start selling on your own online store? If you're already selling online, should you also be on eBay?
What is channel conflict?
Channel conflict can occur when brands and manufacturers sell their products directly to consumers over the internet. Traditionally the best way for a brand to sell to its customers was through retailers and distributors.
As consumers have increasingly turned online to shop, brands have wanted to adapt their sales strategy accordingly. In a world of tightening margins, lower overhead expenses and communication costs from selling on online stores or marketplaces such as Amazon and eBay is attractive to brands.
Doing so can have an impact on existing relationships with retailers and distributors resulting in channel conflict.
How can I work with my retailers and distributors?
What’s important to see first is how selling on your own online stores, on marketplaces like Amazon or eBay or even on B2B Portals can drive significant sales for your brand.
Knowing and measuring this potential is the first step in successfully identifying where there might be potential conflict, but also how to address it. In our guide on the topic we go through various examples of what this may impact in terms of inventory and expansion to new markets.
There’s also a number of features such as store locators or live inventory checks that can help provide a new role to your retailers and distributors along the consumer’s path to purchase.
Going beyond channel conflict
Ultimately, selling online is not about channel conflict but about providing information and controlling the conversation. Consider your customer’s path to purchase:
- Awareness of your product
- Consideration of your product
- Retention activity
Is your online strategy currently addressing these five points? If not, you’re at the mercy of a number of other companies to ensure your customer’s experience matches your marketing calendar and whether your product is the one being recommended.
How do you want to address channel conflict? Share your thoughts with us and don't forget to download our FREE guide and checklist to going beyond channel conflict.