The Retail/E-Tail Dilemma


Why are there so few vendors that are successful at both brick and mortar retail and e-tail?


It's a question worth asking: What makes retail so dramatically different from e-tail? It's an especially timely query as we prepare the retail and e-tail best-seller awards for our RetailVision event this month. Of the 24 categories NPD and Everything Channel researched, in only five instances was the best-selling item exactly the same in brick and mortar sales and e-tail.

Most vendors are simply not doing a good job of targeting retailers and e-tailers. It's not just that there are totally different channel skills and programs necessary to be successful in both markets. That's a given, considering the "Retailers are from Mars, e-tailers are from Venus" cultures at work here. The biggest issue is that most vendors simply do not look at the channel holistically. They don't see the market opportunities they are missing out on because they just don't have good channel metrics or channel/business intelligence. And that is particularly important during an economic downturn.

Those vendors that have a holistic view of the channel with a broad and diversified business will weather this downturn much better than those that are myopic -- and they'll be the ones that break out big when the market turns, too.

We've thought long and hard about this holistic concept at Everything Channel. It's why we're committed to delivering a full panoply of events (RetailVision, Midsize Enterprise Summit, XChange), research (Institute for Partner Education and Development), tools (Promo Finder, Exalt), information (CRN, Channelweb.com) and community aimed at accelerating sales in every segment of the channel from consumer to enterprise. It's a big ambition.

What's amazing is what many vendors don't know. Many probably spend 10 times more on their direct sales efforts and get 10 times less return than they get on their channel investments. A careful, cost-accounting analysis that includes personnel, time, resources and dollars spent would be well worth the investment to learn what the return on that spend is compared with their channel businesses.

Vendors that have been successful in both retail and e-tail have a no-holds-barred commitment to channel excellence. Look at Linksys by Cisco, which swept all Best Seller networking categories in both retail and e-tail; APC, which won both UPS categories; Logitech, which took both keyboard categories and even walked away with an e-tail Webcam category victory, and Hewlett-Packard, which ran away with both printer categories.

Those vendors have channel cultures. They value and treasure their channel partners and look at the channel holistically. That's something all vendors would be wise to emulate. That is, if they are interested in growing their sales and market share.