The Retailing Highlander: Only One Channel Can Survive

Alex Cochran, founder of Sheds4Less, has a long history in the retail industry. His most recent enterprise has afforded new insight on what makes a great online business and it makes for excellent advice for anyone starting out online, or in need of tweaking their current offering.

Sheds4Less provides a range of garden sheds for consumers to purchase – a product that he had to combine with some innovative thinking in order to sell online.

Cochran explained his retail philosophy in a press release entitled ‘Can you fit a garden shed in your letterbox?’

“Multichannel retailing is the buzzword of the day,” Cochran said. “Industry commentators are presenting multichannel retail, or even omni-channel retailing, as the panacea of the floundering bricks and mortar retail industry. This is just not the case.”

It is Cochran’s belief that the future of retail lies in the hands of pureplay online retailers, an argument that isn’t popular among established figures in the industry, but is beginning to gain more and more traction nonetheless.

“Multichannel retailers serve many masters, but none of them are the customer,” Cochran pointed out. “Pure online or pure bricks and mortar retailers have an opportunity to optimise their offers in order to deliver true value to the consumer. The key decision that today’s retailers need to make is to choose which channel will deliver the best value to customers and the best long term return for stakeholders.”

“There is no doubt that there will be casualties for those who get it wrong,” Cochran said.

When Cochran decided to sell garden sheds through an online store, his foundation team put a lot of scrutiny on the supply chain. It is here, in logistics, that Cochran believes an online retailer should first look to streamline. In following this process, Cochran realised that the same product couldn’t be delivered in the same manner, and for the same price, if his company was trying to also sell through a physical outlet.

“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,” Cochran said.

“You cannot optimise product design, package design, range width and depth, logistics support, and customer service to serve two masters. One product for two systems just does not work.”

This notion may not come as a surprise to those who have struggled to tackle multichannel retail in the past. However, it will come as bad news for those retailers who are currently seeing some success in this area. The prediction is clear, only one channel will survive. Which one that is depends on the given business strategy and the customer.

“The successful retailers of tomorrow will be those companies who critically evaluate what constitutes customer value in their industry and then choose the channel to market that best delivers it,” said Cochran.

Seeking more information on how to get an online retail venture off to a flying start? See our complete A-Z guide, Power Up: The Online Retail Entrepreneur’s Guide.

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