Demand Management in the Second Decade : Part 2

The Strategic View - Part 2


Multichannel marketing, multichannel retail, pricing and promotions, are challenging both retailers and brand companies. Web retailing is entering a new phase. So is a store’s format, which must employ successful customer experience approaches to create customer loyalty. New retail technologies, such as self-service, mobile marketing and mobile sales, have all moved beyond experimentation.

This is the second of the three-part Strategic series.


This is the 2nd in the 3-part Strategic series.
For part 1 go HERE. For part 3 go HERE.

In today’s dynamic global economy, a tremendous amount of capital, raw materials, manufacturing capacity, and new wealth are flowing into emerging markets, while mature markets are addressing new consumer demand. Segmentation in customer buying trends is increasing. The upscale buyers are still spending, but in new ways, such as at Gilt or BLUEFLY, challenging the traditional luxury retail format. And budget shoppers can get that same J Crew or GAP product marked down at discount malls, TJX, or even on aftermarket web retailers like eBay. Keeping your customer throughout all the channels, like Talbots has achieved, has escaped much larger firms that are now bemoaning their multichannel approach of the last decade.

Statement: You could fail to cash in on this multichannel retail phenomenon and actually lose your entire business. The art and science of multichannel must be mastered in this second decade!

Web retailing has been with us for more than a decade, yet many firms are falling behind, as a new demographic seeks new products and new customer experiences. The web retailer category is beating the traditional retailer. And traditional retailers that think multichannel is just putting up a web site, or creating a unique warehouse for web-only merchandise, are losing sales and customers.

Statement: Organizations, including retailers and brand or manufacturing companies, are not organized around their consumer markets. They are losing audience and new customers, as well as customer loyalty, because they lose their business data and knowledge due to poor cross-functional workflow and decision making.

Marketing, merchandise management, product managers, as well as the supply chain managers who execute the day-to-day operations of their company, are continuously confronted with making the right decisions in an increasingly competitive, complex, and rapidly changing landscape. They must manage the broader integrated supply chain to achieve constantly increasing levels of performance while fulfilling the needs of customers.

Now that we are entering the second decade of the 21st century, we should take a fresh look at all the major factors governing how we understand our customers: discovering demand; designing and presenting merchandise; creating cost-effective and successful fulfillment; and architecting the flawless customer experience from end to end.

The brand and manufacturer firms – this is an old story – have turned over their marketing communications, to their retailers and channel partners. This causes them to lose customer loyalty.

Mars (candy) is ahead of the game. They create fun and fresh content on the web and create customer loyalty by customizing their products online. Another great example is the ultimate in multichannel reality shows The Biggest Loser, with brands that are well presented directly to a hungry customer base: online, on television, on twitter, Facebook, YouTube, and within the books, disks, and other media products that they promote.

Good distributors, who are loyal to my brand, are needed to represent my products in the market place!It’s an old song. And they are needed now more than ever, since global distributors and resellers represent multiple lines and brands.

Manufacturers must also master the new realities. With internet searches for price comparisons, product reviews and product availability, customers are more conscious of price and value. In an increasingly customer-connected world, trends propagate more quickly through social networks, triggering changes in demand and market perception.

Sites that cater to web shopping habits, such as, pricechoppers, etc., are either new partners or new competitors with our sales strategies. Online buyers’ guides, product comparison reports, and aggregation sites of all types, drive or divert business for us.

Despite these these realities, there remains a lack of integration between one function and the next within enterprises and throughout supply chains. This problem creates lags, fissures, and barriers to operating a continuous and seamless work flow. It also prevents us from capturing data on new markets and customers, and from fulfilling their unique requirements.

The new realities on continuous innovation are keeping many executives up at night, while others never had it so good. It’s time now to understand and master the customer base, in their unique channel, and create a truly great customer experience for them that builds loyalty, end-to-end. What’s the alternative?

Read the other two parts of this three part Demand Management STRATEGIC series:

Demand Management in the Second Decade
The Strategic View – Part 1
Demand Management has never been more important. From Demand Creation to Marketing Automation, Demand Forecasting, Merchandising and Assortment Planning, Collaboration with suppliers, and managing S&O
by Ann Grackin

Demand Management in the Second Decade
The Strategic View – Part 3
Supply Chains are just that – chains. That means that we have to orchestrate across the supply chain. Optimization ensures monitoring and visibility of the collaborative supply chain from retailer, distribution and manufacturing, and is key to successful Demand Management.
by Ann Grackin

We look forward to your comments, questions and contributions to this series.

To view other articles from this issue of the brief, click here.

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