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Tag Archives: Multichannel Marketing

More Companies Are Selling Directly to You, At Least For Now

25 Thursday Aug 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

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Multichannel Marketing, Retailing

The pandemic changed a lot of the ways that people do things, and some of those new habits have stuck. For example, when merely breathing in the same room as another person spelled dire peril, consumers understandably stopped shopping as much in brick-and-mortar stores. Online shopping grew to fill the void, and then some, with e-commerce sales increasing from $571.2 billion in 2019 to $815.4 billion in 2020, then to $870.78 billion in 2021.

It is not just consumers whose behavior changed though. Retailers and manufacturers had to adapt to this new world of consumption, as well—bolstering their e-commerce offerings and in some cases ditching third-party retailers to sell directly to customers themselves. In so doing, they have entered into more direct competition with sellers that have been direct-to-consumer—DTC—from the start, like the glasses company Warby Parker or AllBirds, which sells comfy, sustainable shoes. But these innovative upstarts now confront competition from companies with greater brand recognition, as they enter the DTC business. For example, Nike cut back substantially in the amounts of physical product it provided for Foot Locker, Amazon, DSW, Zappos, and other third-party retailers to sell. Instead, it moved the inventory to bolster its DTC offerings, in a move the company claims helped offset the decline in its wholesale business early in the pandemic.

According to Nike’s Chief Financial Officer, some 24 percent of Nike’s total revenue in the fiscal year that ended in May 2022 came through digital channels, including its website and smartphone app. As this calculation indicates, DTC is not limited to the web. Accordingly, Nike has plans to build out its DTC offerings even further, including a Jordan-only concept store to open in 2023, as well as more Nike Live stores, which are membership-based boutiques that offer unique merchandise and special experiences.

Along with Nike, food and beverage companies like Pepsi have entered the DTC market in recent years. Across these markets, the lines between the manufacturer, retailer, and distributor categories have grown more fuzzy.

But even as these big-name brands jump on the DTC train, it might be jumping the track. Some very recent figures suggest a big slow-down in online shopping. Warby Parker is the latest DTC brand to enter into downsizing mode, laying off 15 percent of its corporate workforce. Other DTC brands like Allbirds and Glossier, as well as Walmart’s DTC arm, have shrunk recently too. The reasons for this contraction might be the heightened competition in the market, or it could reflect the increased costs of Facebook ads and shipping costs. Alternatively, maybe the projections were wrong, and the customer bases for DTC products remain relatively small. In response, some companies have reoriented themselves yet again, away from selling directly to consumers and toward a stronger embrace of the wholesale route. Everything old is new again.

Discussion Questions:

  1. Why might Nike open its own DTC channels instead of selling its products to third-party retailers?
  2. Do you expect to see more or less DTC retailing, in the coming year or decade?
  3. Are some types of brands better equipped to handle the challenges of DTC than others?

Source: Akiko Matsuda, “Direct-to-Consumer Sales Are Fueling Supply-Chain Tech Growth,” The Wall Street Journal, August 6, 2022; Tim Gaus and Bill Lam, “Consumer Connectivity: Creating Customer-Centric Supply Chains,” www2.deloitte.com, August 2, 2022; Sara Bloomberg, “Shogun, a Direct-to-Consumer E-commerce Startup, Lays off Dozens,” The Business Journals, August 10, 2022; Gary Drenik, “Will Retailers Follow Nike’s Playbook? Why More Brands Are Moving to DTC Operations and Away from Wholesale and Marketplaces,” Forbes, July 12, 2022; Mayumi Brewster, “Annual Retail Trade Survey Shows Impact of Online Shopping on Retail Sales during COVID-19 Pandemic,” census.gov, April 27, 2022; Nicole Silberstein, “Nike to Double Down on DTC Following Q3 Gains, Plans Standalone Jordan Stores,” Retail TouchPoints, March 23, 2022; Jessica Young, “US Ecommerce Grows 14.2% in 2021,” Digital Commerce 360, February 18, 2022; Cara Salpini, “How Nike Is Using DTC and Data to Expand Its Empire,” Retail Dive, March 23, 2021; Alex Kantrowitz, “The Direct-to-Consumer Craze Is Slamming into Reality,” CNBC, March 14, 2022; Daphne Howland, “Warby Parker Lays off 15% of its Corporate Workforce, Citing Changing Consumer Behavior,” Retail Dive, August 9, 2022; Caroline Jansen, “DTC Brands Have Long Been Vocal about the Importance of Sustainability. Is That Enough?” Retail Dive, June 27, 2022

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Best Buy Touts the Environmental Benefits of Outlet Stores

20 Wednesday Jul 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

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best buy, Multichannel Marketing, Retailing

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Some analysts predict 2022 is going to be a rough year for Best Buy. The Motley Fool sees a “growth …

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Influencers, Live on Your Stream, Ready to Sell You the Products You Want

22 Thursday Apr 2021

Posted by grewallevymarketingnews in Chapter 03: Social and Mobile Marketing, Chapter 17: Retailing and Multichannel Marketing

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Influencers, Livestreaming, Multichannel Marketing, Retailing, Social and Mobile Marketing

Lo-res_119759522-SIn ongoing attempts to be present in any channel that shoppers might use, retailers are embracing the potential of livestreams and their ability to provide a sort of in-person vibe that helps consumers engage with brands. These channel shifts and efforts also reflect the growing sales potential offered by influencers, whose live broadcasts already attract hundreds or thousands of viewers. Finally, the increasing uses of livestreaming retail reflect the expansion plans of various tech and social media firms to be all things to all users.

On Amazon Live for example, individual influencers constantly post videos that review and introduce various products that viewers can purchase with a click. Multiple streams run simultaneously, so visitors can choose whether they want to learn about a single brand of hot sauce from someone sitting in his car, waiting in line to get a vaccine outside Dodger Stadium, or if they prefer to encounter a wide range of products, presented in a professional, journalistic-like style, by “The Deal Guy.”

These influencers and salespeople generally earn some varying percentage of the price for any products sold through the link on their livestreams. For example, the Deal Guy earns a higher percentage for luxury products than for grocery items. Influencers who attract more views and clicks earn priority placements in video menus, as well as quicker technical support if something goes wrong with their feed.

But whereas Amazon Live allows a few dozen livestreams at the same time, services in China host hundreds of them. China is a big market for livestreaming, such that it accounts for about $63 billion in sales, equivalent to 9 percent of the country’s online market. Many retailers host their own shows. A Chinese college even has added an ecommerce livestreaming degree to its curriculum.

Taking lessons from China’s far more advanced livestreaming examples, one consultant suggests that U.S. retailers cannot simply assume that adding videos to ecommerce sites will appeal to fans of livestreaming. Rather, the channel requires novel, appealing, engaging content. To provide it, retailers might consider limited-time offers, as well as exclusive products that people cannot find elsewhere.

Retailers also might take lessons from an older technology: home shopping channels. In these environments, popular and appealing hosts (similar to influencers) introduced a range of products to shoppers through their televisions (parallel to digital screens), often in virtually real time. Just as today’s users can comment during livestreams, shoppers could call in to chat with a host, establishing a strong connection and sense of engagement. As may come as no surprise, the parent company that owns famous home shopping services such as HSN and QVC already hosts livestreaming sessions on Roku, YouTube TV, and Facebook Live.

Discussion Questions:

  1. What do retailers need to do to leverage livestreaming options?
  2. Which kinds of influencers might be the best options to hire to conduct livestreaming sessions?

Source: Jackie Snow, “Livestreaming, Still Niche, Grows as a Tool for Retailers,” The New York Times, March 14, 2021

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New Format for Luxury Shopping: Social Retail By Burberry in China

06 Tuesday Oct 2020

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

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Burberry, China, Multichannel Marketing, Retailing

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Visitors to Burberry’s social retail shop see representations of pure luxury: richly appointed interiors, tastefully stocked with traditional and modern …

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Something for Everyone: Shopping through Facebook Shops

08 Wednesday Jul 2020

Posted by grewallevymarketingnews in Chapter 03: Social and Mobile Marketing, Chapter 17: Retailing and Multichannel Marketing

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e-commerce, Facebook, Multichannel Marketing, Retailing, Social and Mobile Marketing

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Platforms rely on the active participation of different kinds of users, each of which must benefit from its participation. With …

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What’s the Deal with Whole Foods and Amazon?

17 Thursday Aug 2017

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

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Amazon, Multichannel Marketing, Retailing, Whole Foods

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Amazon.com has redefined all aspects of the retail market. The e-commerce giant’s online presence has forced many brick-and-mortar stores to …

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Pin It or Buy It: The Addition of Buy Buttons to Social Media Sites

07 Monday Sep 2015

Posted by Grewal Levy Marketing in Chapter 03: Social and Mobile Marketing, Chapter 17: Retailing and Multichannel Marketing

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Instagram, Mobile Marketing, Multichannel Marketing, Pinterest, Retailing, social media

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After years of watching users express their deep desire to purchase and obtain products highlighted on their sites, the social …

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When Old School Methods Shine on New Tech: What Sets Kohl’s Successful Mobile App Apart

14 Thursday May 2015

Posted by Grewal Levy Marketing in Chapter 03: Social and Mobile Marketing, Chapter 17: Retailing and Multichannel Marketing

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kohls, mobile app, Mobile Marketing, Multichannel Marketing, Retailing

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Cutting-edge technology companies and hipsters might not give a lot of credit to retailers as innovators. But when an international …

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The Odd Grocery Upstart: How Trader Joe’s Leveraged Its Entertaining Atmosphere into a Serious Competitive Proposition

22 Sunday Jun 2014

Posted by Grewal Levy Marketing in Chapter 09: Segmentation, Targeting and Positioning, Chapter 11: Product Branding and Packaging Decisions, Chapter 17: Retailing and Multichannel Marketing

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Multichannel Marketing, Retailing, Trader Joe's, Whole Foods

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The employees are wearing tropical shirts, the product labels feature puns and silly rhymes, and the manager goes by “Captain.” …

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  • Chapter 01: Overview of Marketing (76)
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