Knowledge Bank Blog, Channel Execution

Channel Roles – Complement Don’t Compete

In the Mexico Grand Prix last month, Sebastian Vettel recorded the fastest pit stop of the Formula 1 season.

It lasted 2.15 seconds.

That means the car came to a halt, completed the pit stop and was off again, in the time it has taken you to read this sentence.

This is even more amazing when you think about the people involved in a pit stop.  It can be carried out by up to 20 mechanics.   Various tasks are conducted.  Refuelling the car.  Changing the tyres.  Adjusting tyre pressure.  Refining the suspension settings and aerodynamics.  Cleaning the windscreen and removing debris from air filters.  A lot gets done.

A pit stop for 4 tyres and fuel can last 12-16 seconds.  Later in a race a team may only need a small amount of fuel, so it can take as little as 2-3 seconds.  Races can be won by fractions of a second.  So, every fraction of a second counts.

A great pit stop can only be achieved if the team works together seamlessly.  Everyone on the team has a role and they have to perform that role perfectly. You don’t want to be the guy who doesn’t remove the fuel nozzle in time.

You need to do what you need to do and keep out of the way of everyone else.

Why are we talking about this?  Well, there is a lot of discussion about how the retail channel landscape is changing and how we all need to adapt to the new (& future) reality.  As part of this we hear a lot of talk in companies about the need to take an “omnichannel” approach.

What this often ends up meaning is doing lots of things in lots of different places.  Hitting shoppers with activities wherever they may be.  The focus is on doing more things.  But these are not necessarily the right things.  Often all these activities just move sales around the market.  If you sell more online you sell less in supermarkets.  Channels are competing.

When people talk about an ‘omnichannel” approach, what they should be talking about is a “multichannel” approach.  When you take a multichannel approach you look across channels.  You make sure that your strategies and activities are complementary.

So, how can you do this?

Identify the role of the channel for your CATEGORY.  This is about being clear on how the channel can contribute to overall category growth.  Different channels should play different roles for the category.  For instance, you might have a channel that plays a Trial Driving role.  If you are a Personal Care category this might be health & beauty stores like Boots.  You might have a channel that is about Driving Volume.  A channel where shoppers buy regularly used products – e.g. supermarkets.

You might have a channel that is about Accessibility.  Making the category available to buy in a growing channel – e.g. Discounters.  You might have a channel that is about Trade Up.  Places where shoppers are more likely to be open to buying premium products – e.g. specialist stores.

If you don’t identify the roles of different channels for the category, your strategy can end up being “sell everything, everywhere”.  The channels compete.  But, when you identify channel roles, channels can complement.  They do different things to drive category growth.

Identify the role of the channel for your BRAND.  Once you know the role a channel should play for your category it becomes a lot easier to identify the role it should play for your brand.  So, if you have a Trial Driving channel, the role it plays for your brand is likely to be as a launch channel for NPD.  If you have a Volume Driving channel, the role for your brand is likely to be about supporting mainstream products and leading SKUs.

If you have an Accessibility Channel, the role for your brand may be about increasing distribution.  If you have a Trade Up channel, the role for your brand may be about premiumisation.  It may be a channel that can drive brand equity as well as sales.  This last example is important.  Some channels may not deliver lots of sales, but can help you position your brand to deliver sales in other channels.

Identify the role of the channel for SHOPPERS.  This is about understanding why shoppers go to a channel and how they behave there.  Then doing the things that align with that behaviour and the role the channel plays for your category and your brand.  So, in your Trial Driving channel you may focus on information, education, sampling activities.  In your Volume Driving channel you may focus on activities that make the shopping experience (& repeat purchase) as easy as possible.

In your Accessibility channel, you may focus on visibility tactics as you try to build presence in the channel.  In your Trade Up channel you may do experiential activities and give shoppers support to make more considered choices.  Think the Majestic Wine experience vs the supermarket wine experience.  Serve shoppers in the way that they are most likely to want to be served.

Give each channel a role.  Let each channel perform that role.  A role that is complementary.  Not one that competes.

The guy who refuels the car refuels it.  He doesn’t try to change the tyres as well.

Feel free to forward.  Have a great weekend and speak to you next week.

#channelstrategy #channelrole