Marketing Channel Strategy

OMNI-CHANNEL STRATEGY
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EXAMPLE: A PROTOTYPICAL OMNI-CHANNEL SHOPPER (USA)
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Neal is a 19-year-old college student, shopping for a moderately priced, sporty-looking, but dressy 
watch. On Amazon Prime Day, he searched the site and found a nice Bulova watch at a fabulous 
price that he ordered promptly. But when he received it, Neal found the watch too heavy on his 
wrist, so he returned it. The experience left him hesitant to buy another watch online without 
trying it on first, so he visited a local Costco store, but nothing in its limited range of offerings 
appealed to him. Recalling that his family has long been loyal to Macy’s, he took a trip to the mall 
and found a Seiko watch at the department store that he liked. While still in the store, he brought 
up the Amazon app on his smartphone and found the same watch, but for $120 less. He turned 
to the Macy’s salesperson and asked if the store would offer a price match, but the counter staffer 
indicated it would not and advised him to buy the watch from Amazon. He did so.
Even if both manufacturers and retailers recognize the importance of distribut-
ing through multiple channels, to add to their value proposition and expand their 
ability to reach customers, they often grow by adding channels in a disjointed 
fashion, without any consideration of creating a seamless customer experience.
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Consider T-Mobile, for example: it offers phones and service plans through its 
website, company-owned stores, and third-party retailers. At T-Mobile company 
stores, customers must pay a $20 service fee to purchase a phone, a charge not lev-
ied on customers visiting T-Mobile’s website.
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 Such a multi-channel organization 
encourages each channel to focus on optimizing its own efficiencies, rather than 
the overall results, which creates mismatches in the data, pricing, and inventory 
available across channels.
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The apparel maker Levi-Strauss generates one-third of its sales through its own 
website and company-owned retail stores, but two-thirds come from its partner-
ships with leading department store chains including JC Penney, Macy’s, and 
Kohl’s.
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 Therefore, Levi’s must manage its relationship with channel partners, 
which account for the bulk of its sales, but at the same time, it must make it easy for 
consumers to find and purchase its products directly from Levi’s company-owned 
channels. To manage these dual demands, Levi’s focuses strategically on creating 
consistent omni-channel experiences in any channel that customers might choose 
to access. Of course, each customer experience comprises many phases (e.g., infor-
mation acquisition, research, purchase, payment, delivery or pickup, returns),
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and Levi’s can exert more control over the customer experience on its own web-
site and company-owned retail stores. But it also seeks to build strong partnerships 
with its retail partners to encourage them to support and help it create consistent 
omni-channel experiences. It does this by investing in sophisticated information 
systems that can track the customer journey, inventory, and returns, and enable it 
to work closely with retailers to forecast in-store demand and leverage offline and 
online data to provide them with an integrated view of the customer.
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OMNI-CHANNEL STRATEGY
347
A successful omni-channel experience also means that the company starts with 
and continues to gather deep, rich data to understand what consumers want, sup-
ports meaningful engagement modes with consumers, designs effective and efficient 
retailing and e-commerce capabilities, and maintains successful partnerships with 
channel partners. Ultimately, a successful omni-channel strategy means consumers 
can buy easily, in the mode and manner they prefer.
EXAMPLE: STARBUCKS (CHINA)
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Starbucks counts China as its second largest market, behind the United States, where more than 
3,400 restaurants dot the landscape in approximately 140 Chinese cities. In 2017, the largest 
Starbucks in the world opened in Shanghai. Unlike the nearly saturated U.S. market, China prom-
ises substantial room to grow, such that Starbucks plans to double the number of stores. The 
effort will not be without hurdles, though; Starbucks faces tough competition from the Chinese 
startup Luckin Coffee. Launched in 2017, Luckin offers beverage delivery services, ordered via 
mobile apps, from its 660 stores throughout China. It took Starbucks nearly 12 years to open 
that many stores.
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 Many Luckin stores only offer delivery and solely accept mobile payments,
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but its app allows customers to watch a livestream of their drink being prepared. In addition, 
its drinks cost approximately half of what Starbucks charges.
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Without a well-developed deliv-
ery system, Starbucks had to collaborate with the retail giant Alibaba to deliver beverages to 
Chinese consumers, though this partnership also has created a new potential channel, such that 
Hema supermarkets, run by Alibaba, may soon start hosting Starbucks delivery kiosks.
K E Y C H A L L E N G E S O F T H E O M N I - C H A N N E L 
A P P R O A C H
The challenges associated with delivering a seamless omni-channel experience to 
customers vary somewhat across the different types of sellers attempting to establish 
it. For example, for 

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