Dual Distribution Strategies: are they right for me?

By May 31, 2011Business

The beauty of marketing is that it’s evolutionary. There’s nothing static about it – nothing at all.

Technological advancements have changed the way we communicate. Today, instead of posting letters, we transmit messages by email, SMS and MMS. We post updates on Facebook, we Tweet, instant message and Ping Chat. Likewise, nearly half of all Australian small businesses now have a website to promote their business.

But it’s not just digital communications methods that have evolved. Over the past 25 years, I’ve noticed distribution strategies also deviate massively from tradition.

To illustrate this, two and a half decades ago I scored a gig, as a Queensland sales representative for Adidas. I was one of four sales personnel whose job it was to sell the global icon’s sporting goods to retailers. These retailers (intermediaries) would then sell Adidas, as well as other successful brands, such as Nike, Puma and Reebok, to ultimate consumers (us).

As wholesalers, we couldn’t sell directly to consumers. This was our retail partners’ domain, and we dare not bite into their sales. Doing so would unquestionably result in our retail customers, well, wiping us like a dirty bottom!

In our case, supplying retailers, as well as selling directly to consumers, was deemed to be an intangible option. It was a ‘no go zone’.

With time, however, comes change. The abolishment of import tariffs, from memory around 1991, facilitated increased direct competition. A flood of imports gave retailers greater choice. And, some of the larger retailers embarked on their own importation programs. Manufacturers and wholesalers had to fight hard for sales, in an increasingly competitive market place.

Around 1995, the internet was commercialised on a full-scale basis. This, fascinatingly, demolished geographic boundaries. Any business, regardless of size, was now able to have a global presence. This placed even more downward pressure on already difficult trading conditions.

In retrospect, it was only a matter of time before manufacturers and importers dipped their toes into the previously unchartered waters of dual distribution.

Nowadays we have a smorgasbord of large and small businesses, each of which supply consumers, not only through their retail partners, but through their own direct distribution channels as well.

Today, visit the corporate websites of Adidas, Nike, and even computer powerhouses, Apple and Dell, and you’ll see for yourself. Direct distribution strategies are clearly utilised and embedded within these organisations logistical framework.

The moral of this story is: For every action, there’s a reaction.

Food for thought: Is your business capable of intensifying its distribution strategy, without cannibalising sales? Or would implementing such a strategy, irreparably harm the continuity of your business?

Apple Dual Distribution Strategy

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