Question

3. What advantage can bricks-and-mortar players derive from setting up an online channel? How should they use the two channels to gain maximum advantage?

Answer 1

3.

Following advantages can be derived:

A. It will bring efficient utilization of logistics, distribution channels and inventory stock for both types of offline stores as well as online channels.

B. A bigger consumer segments that like to buy online, can also be targeted with the presence of the online channel. It can create an opportunity to buy online or people can be diverted back to the offline stores.

C. The physical stock of goods as inventory for the brick & mortar stores, can also be used by online channels. So, no nay additional investment is required.

D. A bigger geographical area is targeted using the online channels.

They can create the synergy effect between the two channels. It will be done by efficient utilization of the resources available at the disposal of the company. The sales force will pitch not only the offline stores, but also the online channels so that revenue and business development is maximized. Hence, productivity level will improve. Besides, the inventory management will become more efficient and the demand creation either in offline stores or in online stores, can be fed from the one inventory storage. So, it will eliminate the excess funds trapped in the inventory. Besides, the online channel as a direct channel between the consumers and the company, can attract a larger consumer base. So, the company will reap the reward over a period of time.