Summary of “How to win in an omnichannel world”

Summary of the article “How to win in an omnichannel world” by David R. Bell, Santiago Gallino and Antonio Moreno for the course “Marketing Channel Management” (328244) of prof. Inge Geyskens at Tilburg University.

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David R. Bell, Santiago Gallino, Antonio Moreno
How to win in an omnichannel world
The framework • A traditional player needs to expand through quadrants 2, 3 and 4.
• A pure-play online retailer needs to pursue quadrant 2 and 3 strategies and consider
partnerships with traditional (quadrant 1) retailers as well.
Information: Remote vs. Direct access
Offline quadrants → nondigital products
Online quadrants → digital products
• Quadrant 1: well suited to high-touch
• Quadrant 4: well suited to products
products yet highly vulnerable to
containing few, if any, “nondigital”
showrooming
attributes
o Products that have significant
o Products for which customers
“high-touch” elements,
either have a fair degree of
important service requirements
certainty about what to expect
or significant nondigital
or can expect only limited value
attributes
from a live customer-service
• Quadrants 3 can improve performance
experience
outcomes for retailers: mitigation or
• Quadrants 2 can enhance the customer
elimination of showrooming is a vital
experience: uncertainty about
management objective for traditional
nondigital attributes is a key barrier to
retailers
consumers’ willingness to buy online
and is an especially important
deterrent for first-time online
purchases
Fulfillment: Delivery vs. Pickup
Consumer’s point of view
Delivery
Obtaining a product after a visit to a physical
• Advantages
location (store)
o Mitigation of travel costs
• Advantages
o Access to products that would
o The customer does not have to
not necessarily be displayed in a
pay for shipping or wait for
physical store
delivery of the product
• Disadvantages
• Disadvantages
o Waiting time (and delayed
o Travel costs
gratification)
o Shipping costs

Retailer’s point of view
Fulfilling orders via delivery
Orders fulfilled in stores
• Fulfillment can be centralized from a
• Real estate costs
distribution center located in a less
o Stores have to be accessible to
expensive area
customers and large enough to
• Easier forecasting demand easier
hold inventory
o Forecasts made at a more
• Higher supply-mismatch costs (excess
aggregate level, reducing
inventory or lost sales due to products
supply-demand mismatch costs
being out of stock)
o Due to higher demand
uncertainty