Continuing in our Introduction to E-commerce, we are going to look at some basic approaches to marketing and sales. The principles covered here are sometimes referred to as 'channel sales and marketing'.
Let’s look at the focus of our sales first. Many businesses focus on consumers, while others focus on businesses, and still others focus on intermediaries, and in some instances all of these are the focus of a singular business. Most businesses who sell directly to a consumer, are known as Business to Consumer (B2C) businesses. Those that sell exclusively to other businesses are referred to as Business to Business (B2B) businesses. Some businesses focus on Intermediate Channel Sales in which they market and sell to an intermediary such as a dealer or retailer who will be selling the product to customers. By the way, the term ‘Channel’, as in “Channel Sales”, or “Marketing Channel”, is a method of bringing products to market so they can be purchased.
Now that we have looked at the focus of our sales, let’s examine the fundamentals of marketing and selling approaches. The Business-school textbook definition of Direct Selling is the direct personal presentation, demonstration and sale of products and services to consumers, usually in their homes or at their jobs. So I ask you, when is the last time the ‘Fuller Brush Man’ knocked on your door? Modern direct selling includes sales made through a variety of marketing channels, and while E-commerce may only be one of these channels, it is also possible that E-commerce is the hub upon which all other ‘channels’ are based. Obviously Direct Sales are focused on both B2C and B2B customers.
Intermediate Channel Sales is not only a focus of today’s E-commerce, but one of the major forms of marketing and selling. When a business relies on intermediaries, such as wholesalers and retailer, to make their products available to their customers, the selling approach is referred to as an indirect channel. Indirect channel sales can include the use of Authorized Resellers, Affiliates, and Resellers.
Multi-Channel Sales and marketing refers to the practice of interacting with customers using a combination of direct and intermediate channels including websites, retail stores, mail order catalogs, direct mail, email, mobile, and others which are all designed to enable customers to buy your product or service, using the channel of their choice. In simple, multi-channel is all about giving the customer choice.
In today’s global, on-line, mobile and on-the-go society, customers are any and everywhere. They may be walking in the front door, or emailing from around-the-world, they maybe logging into your website, or contacting your distributor in Hong Kong. A multi-channel approach to Commerce, even when based upon your E-commerce platform and its various integrations, is designed to put you, and your products, where your customers are.
One of the most important concepts in today’s E-commerce world, and especially in multi-channel sales, is the necessity to have a single view in the mind of the customer, and maintain a consistent customer experience across all channels. Your customers are looking for YOU, YOUR BRAND, and that brand must exist and flow across all channels. As such your digital marketing efforts must always focus on Brand as well as Customer. Since customer experience, no matter which channel of access they use, is one of the most powerful competitive differentiators, it is essential that consistency in message, pricing and product be followed, because your customers are experiencing your brand no matter the access point: storefront, over the phone, website, or intermediary.
Here are the formal definitions for some of the principles we discussed in this article:
Affiliate – A publisher or site owner that forwards qualified web traffic to an online merchant on a pay-for-performance basis in the context of online marketing.
Authorized Reseller – Manufacturer-approved reseller who is allowed to sell (retail) products directly to consumers.
Business to Business (B2B) – Businesses who sell exclusively to other businesses. Often dealing fewer defined customers in larger volumes with a reduced price. Often a manufacturer going to a distributor.
Business to Consumer (B2C) – Businesses who sell directly to a consumer. These businesses have many customers with fewer orders per customer.
Channel (as in ‘Channel Sales’ or ‘Marketing Channel’) – Method of bringing products or services to market so they can be purchased by consumers.
Direct Selling – Marketing and selling of products direct to customers away from a fixed retail location.
Digital Marketing – a marketing approach including capabilities that expand beyond traditional channels to newer channels, including the Web, email, mobile, video, etc.
Intermediate Channel Sales – A method of taking products or services to market via an intermediary such as a retailer or dealer who will be selling the product to customer.
Multi-Channel Retailing – Retailing products through more than one channel: E-commerce stores, online marketplaces (Amazon, eBay), physical stores, catalogs, sales force.
Reseller – A company that purchases goods or services for the purpose of resale not consumption. In web economics, a reseller may also be a form of affiliate marketer, promoting a product or service.
In future articles we will look at other aspects of E-commerce including cost and pricing controls, inventory and supply chain management, and accounting options for your E-commerce operations.