Multichannel retailing is the buzzword of the day, however single channel focus will deliver superior customer value in the long term.
Sydney, Australia (PRWEB) February 27, 2012
It might sound like a crazy rhetorical question, however, it was the basis for the establishment of what on the surface looks to be an impossible business - delivering garden sheds direct to a customers door. "In the process of establishing Sheds4Less, we discovered there were numerous ways to deliver real customer value, while at the same time optimizing the logistics chain to deliver a truly low retail price. No other shed retailer had focused on the entire length of the distribution chain from factory to the customers door," said Alex Cochran the founder of Sheds4less. Flying in the face of current marketing thinking that a multichannel approach yields best results, the company chose a single channel approach. "Focusing on one channel to market was imperative if we were to optimize the product and distribution chain to deliver real value to the customer," he went on to say.
No compromise is the key.
Multichannel retailing is the buzzword of the day. Industry commentators are presenting multichannel retail, or even omni-channel retailing, as the panacea of the floundering bricks and mortar retail industry. This is may not be he case.
Any combination of bricks and mortar and online retailing will result in compromise. "We could not optimize our retail channel for both online and bricks and mortar sales channels at the same time, they require very different product attributes for channel optimization, these competing demands always resulted in a sub-optimal process, so we had to choose," said Cochran. "Designing the product packaging, storage methods and physical handling attributes gave us an opportunity to delivery true customer value," he went on to say.
"The key decision that today’s retailers need to make is what channel will deliver the best value to their customer and the best long term return to their stakeholders. Sheds4less has taken this approach. "There is no doubt that there will be casualties for those who make the wrong strategic decision," said Cochran.
He said, "Garden sheds must rate as one of the most challenging products to present to the consumer from a retail point of view. They are a low interest, logistically difficult product that requires a degree of specialist knowledge in the sales process and are possibly only purchased once in a customer’s lifetime. Arguably the perfect product for a pure online or pure bricks and mortar play, but the worst for a multichannel approach. Designing a garden shed range so that is fits within the constraints of both the online and bricks and mortar sales channels involves compromises that result in the destruction of customer value."
One product, two systems just does not work.
Tomorrows successful retailers will be those companies who critically evaluate what constitutes customer value in their industry and then choose the channel to market that delivers maximum customer value.
To read more about the Sheds4Less project visit the following link:
Alex Cochran is a veteran of the Australian retail industry and the founder of Sheds4Less. Sheds4Less is a project business designed to demonstrate that you can deliver real customer value in the competitive Australian retail landscape by challenging the industry norms and focusing on and optimizing a pure play channel to market.
Contact Alex at alex(at)alexcochran(dot)com(dot)au and visit the Sheds4Less website at http://www.sheds4less.com.au