SHARK TANK MULTI-CHANNEL

Why multi-channel for sports retail doesn’t work.

A white paper by Julius Geis, © 2015

* © Shark by: Okan Benn Noun Project

*

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CONTENT

00 Prologue

01 Why multi-channel does not work

02 Multi-channel in use

03 The importance of brand awareness and how the term "omni-channel" can be used as a promising strategy!

04 Summary

05 Glossary – Shark Tank multi-channel

06 Appendix

07 About Julius Geis

*See terminology in the glossary – Page ! von ! –2 18

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oo PROLOGUE

There were many complaints during this year's ispo in Munich. The sports industry unanimously complained bitterly about the bad winter, the bad sales figures, and the impending future of their market. Throughout the fair halls, on the podiums and in the specialized trade magazines the "crisis" and new concepts were discussed. There is an ongoing search for concepts for a new upsurge in trade, as well as answers to the price war in the industry and the dominance of the online pure player. Multi-channel strategies were also high on the agenda this year. Multi-channel was discussed as a concept and solution to conduct trade and lead manufacturer's brands to growth and success. I am of the opinion that multi-channel cannot fulfil the hope of most market traders and manufacturer's brands, as it rather resembles a shark tank. My reasoning is as follows:

To properly understand why an opening to multi-channel could be dangerous for many businesses, we must first take a closer look at the motivation that lies behind entrepreneurs turning to multi-channel. In the industry, multi-channel is proposed as a strategy to prevent declining sales, but also to respond to the changing buying behavior of the target group. In addition, multi-channel serves as another strategy to curb the growing competition of online pure players.

Entrepreneurs hope to counter-act against the market trend by opening up to multi-channel ideas. The advocates of multi-channel argue that the target groups are again reached in their familiar surroundings by opening the core business and core market. They are convinced that the lost business can be won back at this point. This belief is mostly based on studies demonstrating that audiences, now from every age group, access product information online or mobile, compare prices and an increasing percentage also buys online. Although the numbers and results of the studies are accurate, the multi-channel concept is the wrong strategy approach for sports retailers and many manufacturers' brands to address the above mentioned problems. Using the example of specialized trade, I would like to demonstrate why:

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01 Why multi-channel does not work

The market economy is a circuit based on the laws of supply and demand, thus determining market

activity. Rendered in a graph – which is by the way valid for all markets – this results in the following

parameters: the trade represents the offer (subbly=trade) and the consumer determines the demand

The picture shows: Trade A) offers a variety of products from different manufacturers' brands at a

certain price. Customers A) have a certain demand and search within these criteria.

Multi-channel has the ability to substantially increase the scope of action within the market in which the

products are offered. You can see that customers A) no longer find deals exclusively in shop windows

while strolling through town, but also on Facebook or by using search engines.

Let us briefly go back to the current problem of the market and the motivation of the specialized trade.

We are looking for a strategy to regain control over declining sales, to observe new target groups and

their purchasing behaviour, and to keep the online pure players as competitors in check.

What does a seriously applied multi-channel approach mean in practice?

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© JULIUS GEIS – BRAND AESTHETE

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© Julius Geis – Brand aesthete 2015 – Seite ! von !18 18

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