Multichannel marketing

Jens Nordfält, Professor

 Multichannel Marketing

Main Topics:

»How digital marketing has transformed marketing

»The development of multichannel marketing
 How digital marketing has transformed
marketing

First moment of truth

TRADITIONAL MARKETING

Second
momen
t of truth
TODAY
Figure 1.1 Customer lifecycle marketing
touchpoint summary for a retailer

Paid media too

Source: Smart Insights (2017)

 How digital marketing has transformed
marketing
Digital marketing is about:
»Audiences Fragmentation, new audiences, history
»Digital devices Mobile Internet of things
»Digital platforms Facebook, etc
»Digital media Channels: email, search engines, social networks
»Digital data Big data
»Digital technology Constantly changing, new touchpoints, new uses
Which ideas/products
How digital marketing has transformed
have had the greatest
influence according to
you?
marketing

?? ??
√

? ?

Table Timeline of online services indicating innovation in business model or

marketing communications approach (Chaffey & Ellis-Chadwick, 2017)
You've got to start with the
customer experience and
work backwards to the
technology.
You can't start with the
technology and try to figure
out where you're going to try
and sell it.
Steve Jobs
Images courtesy of Google Images
Percentage of all global web pages served to mobile
phones from 2009 to 2018

https://www.statista.com/statistics/241462/global-mobile-phone-website-traffic-share/
 Number of available apps in the iTunes App Store
from 2008 to 2017 (in 1,000s)

https://www.statista.com/statistics/268251/number-of-apps-in-the-itunes-app-store-since-2008/
I
n
t
r • Affordances: How the properties of
o objects determine the possibilities for
action (Gibson, 1977);
d
• We view affordances in objects, not their
u physical characteristics e.g. Chopsticks
c are not 2 sticks, but as eating utensils;

i • Yet this can be culturally located -

people shape the affordances of objects;
n
• Affordances are relational (Fayard &
g Weeks, 2014)

Images courtesy of Google Images

On affordances: What are the marketing uses
of a smartphone? Camera function?

GPS/map function?

More?
Always connected aspect?

Images courtesy of Google Images

 Summary of organisations challenges in
digital marketing
» Strategy
» Structure
» Systems
» Staff
» Style
» Skills
» Superordinate goals
 Strategic framework for developing a
Are the digital (transformation) strategy
businesses
changing?

Are they
changing
enough?

Source: Altimeter Consulting (2014)

 New channel structures

What is
vertical
integration?
Thi
si
o f d s ho w
h ap i s ru p t a l o t
pe n i
: iT o ns
Am u
azo n e s ,
n

Can you give an

example of
reintermediation?
 Figure 2.4 Model Showing conversion
between the digital channel and traditional
channels during the buying process

Traditional
channel is more
effective
 The real problems
What is driving volume? In-store, promotions, …

Space elasticity
In-store navigation

Digitalization
Strategies for mature categories?

What causes variation in sales?

Optimal multichannel strategies?

Digital is everywhere and massive
Digital is everywhere and massive
 Share of internet users who have purchased selected products online in
the past 12 months as of 2018
Most popular online shopping categories worldwide 2018
n ed to t he
a p pe
he What h es?
t or
t o video st
pe ned ? What hap
pe
a t hap stores travel ag ned to the
Wh book encies?

Note: Worldwide; 2018

Further information regarding this statistic can be found on page 8.
Source(s): We Are Social; Statista; ID 276846

4
 E-commerce share of total global retail sales from 2015 to 2023

Worldwide e-commerce share of retail sales 2015-2023

+20.7%

+22.9%

Note: Worldwide; 2015 to 2019

Further information regarding this statistic can be found on page 8.
Source(s): eMarketer; ID 534123

2
Number of digital buyers worldwide from 2014 to 2021 (in billions)
Global number of digital buyers 2014-2021

+130 million new buyers

Note: Worldwide; 2014 to 2017; 14 years and older

Further information regarding this statistic can be found on page 8.
2 Source(s): eMarketer; ID 251666
THE WORLD’S LARGEST…

YEAR GROWTH SALES

2005 1 100,00
2006 1,12 112,00
2007 1,12 125,44
2008 1,12 140,49
2009 1,12 157,35
2010 1,12 176,23
2011 1,12 197,38
Why are store-based retailers evolving into
multichannel retailers?
 Sales through an electronic
channel are growing at over
20% per year
 Multichannel retailers can attract
more customers and satisfy
existing customers better
 The growth of sales in stores is
declining
 Run by retailers
Builds on multichannel
Run by technology companies

The 1st e-commerce era The 2nd e-commerce era

Building the web Increasing the speed

Multichannel = customer centric
A retailer that sells merchandise or service through more than one channel. By using a combination
of channels, retailers can exploit the unique benefits provided by each channel.

Retailer Steve Cole/Getty Images

Digital Vision / Getty Images

U.S. retail Sales by channel
 3-30

Reasons for Becoming a Multi-Channel Retailer

- Increase Share of Wallet

Example: Eddie Bauer, single-channel customers spend $100-

$200
per year, dual-channel customers spend $300-$500 per year,
tri-channel customers spend $800-$1000 per year

- Overcome Limitations of Existing Format

- Expand Market
- Provide services more cost-efficiently
- Leverage Existing Assets
- Brand Name, Inventory, Customer Database

- Develop Insights in Customer Shopping Behavior

Benefits Provided by Different Channels
 Unique Benefits Provided by Store Channel
 Browsing

 Touching and feeling

 Personal service

 Cash payment
(c) Brand X Pictures/PunchStock
 Entertainment and social interaction

 Immediate gratification

 Risk reduction

Royalty-Free/CORBIS
Benefits Provided by Catalog Channel
Convenience
Information
Safety

Hoby Finn/Getty Images

What’s the Big Deal About
Shopping on the Internet?
 Almost 75% of U.S. consumers use the Internet to search for
information about clothes, shoes, toys, and health and beauty
products before they buy an item.

 83% of customers search online before buying electronics,

computers, books, music or movies.

 Internet channels allow companies to offer a great assortment

of products and provide more information to customers.

 The Internet allows companies to collect information about

consumer shopping habits.

 The Internet allows the company to enter new markets

economically.
Benefits provided by Internet Channel

 Deeper and broader selection

 More tools for evaluating merchandise
 Personalization
 Information is tailored to individual consumers to help them make quicker
and better purchase decisions
 Customized information -- side by side comparisons
 Virtual try on

 Information for solving problems, not just merchandise characteristics

 Virtual Communities
Benefits with Mobile Internet Shopping

 Portable
 Location sensitive
 Push notifications
 Touchscreen
 Smaller screen size
 Apps
 Challenges of Effective Multichannel Business
 Costs!

 Deliveries

 Multichannel supply chains and

information systems
 Distribution strategies for stores,
catalog, and Internet channels
 Challenges of Effective Multichannel Business

• Integrated Shopping Experience

• Communicate with customers anytime,
anywhere through multiple channels
• Website, Store, Kiosks, Handheld Devices
• Integrating legacy systems for seamless
customer interface

• Merchandise assortment

• Pricing strategies
 3-39

Percentage of Cross Channel Shoppers

41