Dual Distribution and Multi-channel Distribution.
Dual distribution and multi-channel marketing are two distinct ways for businesses to reach customers through different mediums. These strategies will sometimes compete with each other for similar customers or bring in new customers.
1. Dual Distribution
Dual distribution involves extending an offering through two or more channels in order to reach customers. For example, a wholesale company might have its’ own brand and a private retailer brand where it sells the same products. Customers that are looking for single units will purchase from the private retail brand whereas retailers looking for multiple units will purchase from the wholesale brand. This can be an effective strategy as it will allow the business to acquire a larger market share. However, this specific strategy can be detrimental to a business as having a private brand will compete with the wholesaler’s retail customer base.
2. Multi-Channel Distribution
Multi-channel marketing is similar to Dual Distribution as this strategy can also result in competing for similar customers. However, Multi-channel marketing involves a traditional marketing reach, which includes a traditional marketing channel such as a brick-&- mortar location or multiple retail stores and an electronic channel such as a website that reinforces acquisition, retention, and customer relationships. The addition of a website can be beneficial at times, but it can also contribute to a stalemate in some cases.
When a business introduces a website as a new channel for customers to access offerings and information they can serve a new type of customers in some situations. Take Victoria Secret, for example, their website receives traffic with a shocking 60% male base. With the addition of their website, male shoppers are able to shop in the privacy and comfortability of their own homes. This enables male shoppers to browse and purchase the sexy collections at Victoria Secret.
Multi-channel marketing can also lead to a stalemate or an unattractive outcome. When introducing a website for your business not only are you opening doors for new shoppers but in some situations, you are also giving existing customers an alternate POS. This means that there is the possibility of cannibalism. This means that customers will drop off from shopping from retail locations to shopping on your website. As a result of cannibalism, as retail sales drop, website purchases will increase. This may or may not be advantageous to the business and will be seen in the numbers.
Today a lot of companies have a customized website and even more new businesses are starting out online thanks to tech companies like Shopify, Squarespace, WordPress, Big Commerce, Wix, Page Cloud, and many more. However, even with the new and affordable option for an electronic channel, some businesses have opted for other channels. Electronic channels don’t strictly consist of business websites, but can also include various online marketplaces such as Amazon, Groupon, Groupon Goods, Groupon Stores, eBay, Jet.com, Newegg.com, and much more. These channels will allow businesses to liquidate inventory online without the cost of a website. With these marketplaces, businesses can avoid the steep cost of a website and opt to only pay a referral fee when an order has been placed.