Omni Channel or Not? Retail Survival or Not?
Jan 24, 2017
Interesting article and interesting position on retail survival and the suggestion that retailers have to develop omni-channel strategies if they hope to survive in this world of Amazon, Wayfair, Jet.com, and some of those other eCommerce companies moving from strictly online to brick and mortar as well. OK, let's separate two major factors, one being marketing (marketing communications and promotions) and the other being operations. I absolutely agree that from a marketing communications perspective retailers have to adopt an omni-channel strategy. However, when it comes to operations, I think retailers and eCommerce companies have to be careful when they jump from brick and mortar to direct and vice versa. I don't care what Amazon is doing, they are a direct / distribution company not a brick and mortar retailer. They operate on between 2 and 5% margins when they are making money. No retailer can survive on those margins. You can't operate stores on the commoditized margins that Amazon and some of the other eCommerce merchants operate with. Been there, done both, retail and direct. It doesn't work. And, merchandising and sales in one environment, isn't the same as it is in the other environment. Now, Amazon doesn't know this yet, but they will figure it out and pretty soon after their retail stores become a factor, not just a test. Now, there is a possibility that they will be able to run their retail stores at a loss like they have run their direct business most of their existence...because the investment community has let them.
In fact, when it comes to most eCommerce merchants, most of them aren't making money and it seems to be SOP to throw more money at them so they can capture even greater market share. The theory being that at some point, they will turn around and start raising prices to make money, or add higher margin goods to their assortments.
If eCommerce companies continue with their give it away marketing share building approach. Retailers that have the same merchandise assortments as the big box eCommerce merchants are going to get their heads handed to them.
Click the link below to read the article:
Dudley Stevenson, founder and CEO of DWS Associates, has over thirty-five years’ experience in consumer marketing, business-to-business marketing, and direct marketing, including developing, planning, and implementing go-to-market strategies. He's also the author of "Marketing Direct: Breaking Through The Clutter." Working with organizations ranging from start-ups to Fortune 100 companies, he and his team have helped clients such as IBM, Sony, Neiman Marcus, Arizona Highways, Marshall Field & Co., Mrs. Field’s, UNICEF, and Patagonia implement successful direct marketing programs. A longtime member of the Direct Marketing Association and the American Marketing Association, Stevenson is also a sought-after speaker. He’s given hundreds of presentations and workshops on marketing and direct marketing. His “Marketing Planning 101” workshop alone has reached more than 100,000 marketing and sales professionals.