Multichannel Retail Marketing: Clash of the Titans

November 10, 2017 John Montesi

retail stores

In the last year, there have been lots of headline-grabbing acquisitions that don’t quite make sense. Bargain volume retailer Walmart buys niche menswear brand Bonobos? Digital bookstore turned global empire Amazon buys organic grocer Whole Foods? Taken at face value, these headlines seem like misguided efforts to reach disparate customer bases through retail marketing. Maybe discerning, fashion-forward men aren’t shopping at Walmart enough, or Amazon wants to be taken more seriously by the kale crowd. In fact, from a multichannel retail perspective, these deals make a lot more sense. Walmart and Amazon are adopting different styles to directly compete with one another for a certain version of world domination. Here’s a look at a few brands transforming the way people shop, and what that means for marketers across channels.

Guideshop to Laptop

Walmart made headlines much of last year with its acquisition of various brands in different commerce channels, from online upstart to men’s clothier Bonobos. It was a curious string of purchases, but one that brought a team of refined marketing teams under one roof, suddenly creating a laboratory of multichannel retail platforms under one of the largest retail companies in the world. Walmart has already seen its business threatened by Amazon, and buying the online retailer was only one piece of its elaborate puzzle to remain competitive. Jet developed a unique, hugely complex real-time pricing structure that creates bigger discounts based on the type and quantity of items customers buy. This model allowed a relatively obscure online retailer to legitimately compete with Amazon, ending in a $3 billion sale to Walmart last year.

And Bonobos has built an entire brand on its “guideshop” model and a sophisticated, AI-intensive backend that custom-tailors its sales funnel based on customers’ previous purchases and fit preferences. The brand built its initial following through superior quality and fit, but quickly realized that growing in the modern retail marketing environment requires more than a quality product. So it used technology to solve one of the largest barriers to entry in the menswear industry—namely, the fact that men don’t care for shopping—to create a revolutionary, painless experience that minimizes individual store inventory and maximizes customer experience. This model is becoming increasingly relevant as we reach a saturation and inflection point with both online and brick-and-mortar retail; people are more comfortable than ever with shopping online, but they also recognize its limitations after years of seemingly limitless growth.

retail sign

Image attribution: Kaique Rocha

Instant Street Cred

A less heralded, but equally important motivator in the recent headline-grabbing acquisitions is street cred—which may sound silly, but is a legitimate cultural currency that is almost priceless. Although, in this case, it does have a price. By purchasing Whole Foods, Amazon became immediately credible in the brick-and-mortar and grocery business, something it began dabbling in last year with beta versions of Amazon Go. When Walmart bought Modcloth and Moosejaw, it brought vintage-inspired womenswear and outdoor giants Patagonia and North Face under its product umbrella. Instead of fighting for years to gain legitimacy in new spaces, Amazon and Walmart both bought their way into new, major market sectors and have allowed their purchases to remain largely autonomous, maintaining their credibility and relationships with valuable customer bases. The alternative is to do what Toyota did with luxury upstart Lexus in the early 1990s, which involved being a loss leader for years with aggressive pricing and over-the-top service experiences in hopes of wooing loyal customers away from established European automakers. In today’s cutthroat retail marketing world, such a strategy likely would not work due to the rapid adaptability of the market in the Internet era.

Retail’s New Life

Even though many retail brands and developers point to Amazon as the number one factor in their declining business, the Seattle-based online retailer made a major investment in a vast brick-and-mortar business when it bought Whole Foods for $13.7 billion earlier this year. While many have argued the purchase was largely data-driven, the reality is that certain shopping experiences, including the experience-driven, whimsical browsing of a grocer like Whole Foods cannot be replicated online. This is about marketing and retail experience. Customer experience and brand loyalty are hard-won aspects of business that date back as far as the idea of business itself, but they are ever more fickle in an age where people might browse a book store then find a better price on their smartphones while standing in the store. Amazon left Whole Foods CEO John Mackey in power, which gives the brand a unique, identifiable figurehead that prevents long-time customers from feeling alienated by the deal.

And Walmart has been careful not to touch Bonobos in any way, instead opting to study its model that seems to embrace the new shopping habit of stopping by a store and then looking for the best deal online. The lack of inventory and ability to deliver any size and style of an item based on in-store fitting allows every Bonobos guideshop to compete with online retailers, while minimizing its square footage requirements and maximizing its visibility in hip urban markets.

Somewhere between the new, cheaper Whole Foods and Walmart’s upscale lifestyle brands and standalone online marketplace, we will see a new style of multichannel retail marketing emerge from this epic clash of new- and old-school retail titans. May the best content win.

For more stories like this, subscribe to the Content Standard newsletter.

Subscribe to the Content Standard

Featured image attribution: Freestocks

The post Multichannel Retail Marketing: Clash of the Titans appeared first on The Content Standard by Skyword.

About the Author


More Content by John Montesi

No Previous Articles

Next Article
How Macy’s Plans to Save Itself (Spoiler: It’s With Marketing)
How Macy’s Plans to Save Itself (Spoiler: It’s With Marketing)

The department store giant is looking to its retail marketing strategy to turn around slumping sales and st...