How can you choose the best sales channels for your business?

Between the moment your product is created and the moment it reaches the hands of the end customer, different paths can be taken. These are known as sales channels, or distribution circuits. And as a retailer, the paths to choose from are increasingly numerous: physical store, e-commerce, long or short circuit, marketplace...

But which strategy is best for your business? What's the simplest, smoothest purchasing path for your customers? Follow the guide: in this article, we'll help you choose the best sales channel to boost your sales and growth.

1- What is a sales channel?

Distribution refers to the process of bringing products to the end consumer. This process relies on different possible channels: we call them sales channels. These are the means by which your offer is disseminated and made accessible to your target audience.

Today, distribution channels are increasingly numerous, especially since the rise of online sales (e-commerce). Consumers, who are increasingly connected, also appreciate unified customer paths, where they can enjoy a personalized experience... as they move from one channel to another.

For brands, this means the rise of omnichannel. But before choosing one or more distribution channels, you need to know what they are.

2- The different distribution channels

When it comes to drawing up your business plan, every company specializing in the marketing of products has to make a decision: which channel(s) to use to distribute your products?

First of all, you need to understand that there are 3 types of distribution:

• The direct channel: the product manufacturer sells directly to customers. This is a simplified circuit, with no intermediaries.
• The short circuit: the product manufacturer supplies the product to a distributor. This partner becomes an intermediary (also known as a retailer), selling to end consumers.
• The long circuit: the product manufacturer passes through various intermediaries to get the product to the end consumer. In this indirect model, central purchasing bodies often buy large volumes from the manufacturer and supply retailers, who then sell to customers.

 

At the heart of these 3 distribution circuits are different sales channels. For example:

• Physical store (retail): from the store opened by the product's creator (direct circuit) to the hypermarket (based on a long-circuit model). Stores can also be permanent or ephemeral, such as pop-up stores.
• E-commerce site: from single-product sites to multi-product sites, for selling products from a website.
• M-commerce: "mobile commerce" is a fast-growing channel for online sales from an app, phone or tablet.
• Social shopping: social networks are also becoming sales outlets in their own right. 64% of users have already bought from a social network! (Source: Accenture study, 2021). It's also possible to deploy an affiliation strategy with influencers, who become your sales representatives on their own social networks.
• Marketplace: to facilitate the sale of your products on a large digital shopping mall, with the help of an intermediary (like Rakuten France). A marketplace is an online platform that facilitates contact between buyers and sellers. This model is booming: 92% of buyers plan to use marketplaces more and more (Mirakl 2022)! For sellers, selling products on a marketplace is synonymous with visibility and performance. For example, in 2020, despite the Covid-19 crisis, e-tailers increased their sales by an average of +24% on marketplaces (Mirakl study, 2021).

3- Choosing a distribution channel: 5 levers to consider

There are several factors to consider when choosing the best sales channel. Here are 5 of them:

• Your product: what do you sell? Do you have any logistical constraints (such as a perishable product)? And what's your brand image? The answers to these questions will help you make coherent choices, to market your product as effectively as possible. This notion of consistency is essential: have you ever seen a Hermès handbag sold in a discount supermarket?
• Your objectives: what are your profitability targets? And your target positioning? Do you have any additional goals, such as CSR objectives? A good sales strategy is based on clear, precise objectives. Start with these objectives, and choose the sales channel that best meets them.
• Your target: who are your customers? What are their habits, preferences and expectations? It's vital to study your potential customers' buying habits, so you can propose a distribution channel that's right for them.
• Your competitors: Which sales channels are your competitors using? Where are they absent? For what reasons? Your priority is to penetrate the market and get noticed... while setting yourself apart from other brands!
• Your budget: what is your sales and marketing budget? These two elements are essential for implementing your sales strategy. The marketing strategy will be necessary to attract the right customers to the right place, before pushing them to buy. Some channels are less costly than others when it comes to marketing: for example, by choosing to sell your products on a marketplace, your marketing costs are reduced. You benefit from numerous integrated marketing tools, and the marketplace has a loyal base of regular visitors (handy, to limit acquisition costs too!).

As you can see, there are 5 levers to consider when choosing your sales channel. You can also opt for an omnichannel distribution strategy. This strategic choice is a profitable opportunity for companies.

On average, omnichannel customers (who buy products both online and in-store) are considered to have a 30% higher lifetime value than buyers using a single channel, according to Google.

So, for example, why not join a marketplace today, while also having a physical store (which also offers click and collect)?

4- 5 tips before launching a new sales channel

Are you narrowing down your choice of distribution channel? Are you ready to develop one or more new sales channels? Congratulations! Before deploying your sales strategy, here are the last 5 tips from our Rakuten France experts:

Offer a quality customer experience

The quality of a customer experience (whether online or in-store) has a real impact on the decision to buy. And this is true regardless of the sales channel chosen. So don't just concentrate your efforts on deploying one channel... take care of the whole experience around it!

The simpler, smoother and more personalized the experience, the more visitors will want to become customers. And to repeat the buying experience! In fact, did you know that 80% of customers admit they are more inclined to make repeat purchases from brands offering a personalized experience? (Source: Havas Commerce Global Commerce Observatory study).

Careful product offering and categorization

The product experience is the value perceived by the consumer when discovering a product, whether online or in-store. While the customer experience is increasingly decisive in the purchasing act, the product experience is also essential.

If you choose an offline sales channel (such as a physical boutique), are the products arranged in the right place? Are they easily accessible and well displayed?

If you choose an online sales channel (such as an e-commerce site or marketplace), have you created a memorable product page? Find out all our tips for creating an outstanding product sheet that will enhance the value of your offer.

Prioritize customer review management

88% of consumers consult customer reviews before making a purchase (Source: IFOP). And this applies across all sales channels. Peer opinion counts, and buyers rely more on their own feedback than on what brands say. So, have you thought about making the most of your customers' opinions at your various points of sale?

As well as posting reliable reviews on your e-commerce site, social networks or in-store marketing materials, think about managing them too. Who will handle and respond to customer reviews internally? On your various sales channels, the company's response is crucial: 96% of customers read companies' responses to reviews, especially when they're looking for a local business! (Source: Brightlocal)

Adopting an exclusive, selective or intensive strategy

In addition to choosing your future sales channel, think about the overall sales strategy to be deployed. Single-channel or omnichannel? Exclusive, selective or intensive distribution?

Exclusive distribution means selling your products in a single location: the brand's points of sale. Just think of our Hermès bag example...

Intensive distribution, on the other hand, is recommended for products in high demand on a regular basis. In this way, your products will be delivered to as many points of sale as possible, to multiply the points of contact.

Finally, selective distribution is preferable if your products occupy a specific market position. In this case, you need to be selective with your distributors or resellers, to avoid damaging your brand image. If you choose this strategy, using a marketplace recognized for its reliability is a good option!

Surround yourself with experts to boost growth

You can't always go faster or further on your own. Our final piece of advice? Surround yourself with the right people, and aim for the best results!

Whether it's creating your e-commerce site, choosing the members of your field sales team or putting your trust in a marketplace... After choosing the right channel, choosing the right people is essential.

At Rakuten France, using our marketplace for e-commerce sales and logistics means surrounding yourself with experts available to support you. An Account Manager is on hand to advise you over the long term.

5- How can I sell on Rakuten France as a Pro?

Would you like to boost your online sales with the number-one partner platform for retailers? Welcome to Rakuten France!

Creating your Rakuten account is easy: just fill in the form by clicking here. You'll then need to complete just 4 steps to start selling:

1- Put your products online

2- Customize your delivery options

3 Set up your e-shop

4- Activate online payment

 

So, are you ready to join the 8,500 professional sellers on our marketplace? Our 12 million customers are waiting for you: