In 1943, a Swedish kid started selling matches, seeds, stationery and other accessories from his bike. He was only a teenager when he launched his company’s first retail location. Facing competitive pressure, he narrowed down his product catalog to RTA furnishings. As time went on, his furniture shops started to spring up all over the globe. Since no business ever stays still, the company developed a cutting-edge digital eCommerce platform that has proven to be indispensable, particularly during the pandemic.
If you still haven’t connected the dots, this is the story of the modern interior design and furniture enterprise we know as IKEA.
When it comes to selling furniture, IKEA has been one of the most successful companies ever. Why? Because they developed a way to anticipate consumer trends, which has played a major role in its long-term success.
Usually, it’s not a good business strategy to put all of your eggs in one basket because of a wide range of market dynamics, including inflationary pressures, supply chain interruptions, shifting consumer preferences, and ever-changing economic circumstances. Being one-dimensional might be the first step toward eventual collapse. IKEA isn’t the only retailer that’s had to adapt and discover new ways to reach its target audience so its customers can decide how and where they want to shop.
Diversifying distribution and sales channels should be a measured and data-driven endeavor. Here are five ways that’ll help you stand out from the rest.
1. Create a demand map
You must identify where you are right now and where you’re going before you can start investing in an omnichannel business. It is always a good idea to put in the effort to learn your customers’ habits and preferences and prepare for unexpected complications like cross-channel cannibalization.
You are in a better position to make informed decisions once you have collected and analyzed information related to your target market’s demographics, demand patterns (in the form of search data), and product preferences. For instance, if most of your customers are found on Amazon, and demand increases on the platform with the introduction of coupons, you may find it more profitable to expand into value-based channels like Walmart.com rather than invest in a direct-to-consumer site.
Combine your demand mapping with detailed information about your typical customers to identify the channels with the highest potential. For instance, if your target audience tends to be younger, you are more likely to reach them by increasing your advertising expenditure on youth-centric platforms like TikTok, Snapchat, and Instagram.
According to data collected by Shopify, 53% of brands are investing in tools that allow them to sell their products anywhere. Basically, your competitors are already offering multiple touch points to their customers.
Learn how strong your value offer is in comparison to the competition via qualitative and quantitative analysis. Examine their brand positioning, tone of voice, marketing, and platform in addition to the details of their product’s features and costs. Construct an in-depth picture of who they are and what they stand for.
Consider your own records. Test your platform, product, and advertising campaign’s CTR and CR samples. Incorporate these indicators into your analysis of consumer preferences, successes, and failures. Compare your findings to the results of your competitive analysis, and adjust your brand positioning and messaging accordingly. This has the potential to raise your brand’s profile, which in turn can boost sales and brand loyalty.
2. Simplify your supply chain
The front end of your brand benefits from diversification via channel development, while the back end of your supply chain can be streamlined by enabling simplification through a “many channels into one” approach to fulfilment. This approach consolidates all of your available stock across all of your sales channels into one unified system. As a result, you can easily adjust your stock levels to match anticipated sales and steer clear of both surplus and shortages.
If you have the ability to move stock across channels to complete orders and returns, you can provide your consumers with the best possible shopping experience by making sure they get their purchases quickly and easily. Many modern customers like flexible delivery options, such as the ability to make an online purchase and immediately pick it up from a physical location.
Because of the potential for companies to lose customers due to delivery delays and supply shortages, this may be a huge point of differentiation for your retail business.
3. Manage MSRPs
Understanding your cross-channel profit targets and the nuances involved in controlling your base SKU-level pricing (or “manufacturer’s recommended retail prices,” or MSRPs) is essential for effective channel management.
Determine the economics and pricing elasticity of each platform. Estimate the potential revenue and expenses for each platform, and think about how those variables may affect each SKU if you were to grow. See how your customers react to pricing changes on a per-item basis across all of your possible platforms.
Combine category-level objectives with economic and price elasticity data. So, if you’re trying to sell family products, you should think about where those people typically shop.
A pricing plan will likely involve a lot of trial and error, but gathering the appropriate information is the first, most important step. Maintaining the same pricing across all sales channels may help certain retailers attract and retain more customers. Others may find that offering different prices on different channels via means like discounts and deals is the most effective method of increasing revenue.
4. Create a cohesive brand narrative
Customers care more than ever before about how transparent and consistent your brand story is, in addition to your prices and offerings. According to research commissioned by Google Cloud, over 80% of consumers want a company’s values to line up with their own, and 75% of consumers have left a business due to a conflict in values.
It might be difficult to maintain this kind of uniformity as you add more channels, but it’s crucial. Companies that used an omnichannel strategy for advertising saw a 90% increase in client retention compared to those that used a more traditional, one-channel strategy.
Put your focus on developing a PR and marketing plan that can be implemented across all channels while being loyal to your brand’s identity and value proposition. Make use of the resources, channels, and technology available on different platforms if you want to connect with your audience.
5. Important takeaways for startups and established brands alike
According to a study released by the Harvard Business Review before the pandemic, more than 70% of customers use more than one shopping channel. Carefully and precisely expanding your retail company based on data can increase your chances of long-term success. The importance of trying things out and leveraging new knowledge cannot be overstated. Keep a vigilant eye on performance patterns while also being quick and flexible enough to make necessary adjustments. Successful multichannel campaigns are the product of dedicated effort.
Transforming the impossible into reality!
How your company expands is entirely up to you. What we do is turn ideas into reality. The contemporary commerce solutions provided by Cooperative Computing may be adapted to meet the specific requirements of every organization, empowering the development of highly personalized, effective interactions with clients and promoting long-term growth and success.