SALES CHANNELS: EVOLUTION THANKS TO ARTIFICIAL INTELLIGENCE

Which is the right one to make your company take off?

Sales channels are the process of introducing products or services to the market and making them available to customers. In other words, they represent channels from the manufacturer or supplier to the ultimate purchaser.

A sales channel can be: direct if it involves a company selling directly to its customers without commercial intermediaries, or indirect if goods and services are distributed through third-party channels. Commercial intermediaries can be affiliates, distributors, or retailers. Depending on the number of intermediaries involved, the channel is classified as long or short.

The characteristics of each type of sales channel:

  • direct sales channel: the producing company has complete control over the distribution system and can maintain quality compared to the competition, which is crucial for products requiring high-level support. It requires significant marketing investments to reach customers and gain recognition through extensive geographic penetration without third-party support. This system comes with a high cost but also offers the potential for higher direct profits.
  • indirect sales channel: thanks to commercial intermediaries in the distribution chain, it is easier to achieve deep market penetration, increasing awareness of market trends compared to the competition. The manufacturing company has less control over product quality and must continuously monitor intermediaries to ensure it.

This important choice should be made during the Business Plan development phase and will vary primarily based on the product offered, the target customers, the goals to be achieved, and the marketing strategy as part of the marketing mix.

Whatever sales channel is chosen, dealing with the web is inevitable today, so it is essential to understand Digital Marketing through a course and understand how artificial intelligence applied to sales and online marketing can bring advantages.

Traditional Sales Channels

The prevailing sales channels in the market are numerous. Nothing prevents a company from choosing a single sales channel to start and then adding others, whether they are B2B or B2C sales channels, or completely disrupting and changing them. Of course, the more careful the choices, the better; Otherwise, loyal customers may not see your product in the ways they were used to, which can lead to dissatisfaction and lost sales.

sales strategy

Each sales channel has its advantages and disadvantages, and in addition to having a clear understanding of the product or service on offer, it’s important to know all of them in order to choose the right one for your business and the right one for your target customers.

Here are the most popular sales channels, along with tips for determining the best ones for your product.

Physical stores

Due to its immediacy, the physical store is still the preferred choice of many customers. There, customers can not only see but also touch and, in the case of clothing and shoes, try on the merchandise. Leaving the store with their purchase generates immediate satisfaction. The physical store perfectly caters to the needs of people who don’t shop online due to a lack of electronic savvy or simply because shopping is a leisure activity for them. Of course, the option should be evaluated based on the typical customer profile, also known as buyer personas.

The cost of maintaining and managing the point of sale is not necessarily a drawback if well-managed. It all depends on the method. The most important advantage of a physical store is the immediate connection with customers, who are not only buying but also experiencing when they walk into the store It is the team’s job to ensure that they have an experience good by providing good service.

Caring for Sensory Marketing and Visual Merchandising is essential to reinforce the experience and ensure that customers always want to come back. Furthermore, if the company also offers online distribution, it can use the store as a pickup point, a convenient option for online shoppers who cannot be at home to receive their delivery or offer the option to purchase a missing item in the online store from a device available in the physical store and have it delivered to their home or picked up in-store. These are just some of the reasons why physical stores will never disappear.

 

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Distributors

Distributors are primarily wholesale companies specialized in selling to retailers, not directly to consumers. This prevents the hiring and training of the sales force, bypassing the need to maintain a sales force, and acquiring new international customers.

On the other hand, there are drawbacks on the construction company. While the distributor has no price constraints on the product/promotion and can simultaneously distribute competing products or even start producing low-cost imitations, the manufacturing company takes no labelling actions and has no direct insight into market trends, changes in consumer preferences, or shifts caused by new competition policies.

Generally, companies must be willing to sell to distributors at a significant discount; therefore, this type of sales channel may not be ideal for low-priced products or those with a narrow audience.

Affiliate Sales

Affiliates are companies that sell goods on behalf of other businesses, helping them reach larger and diversified customer bases, in exchange for high commissions for their services. However, to avoid fraudulent practices such as deceptive advertising, it’s always wise to thoroughly evaluate any potential affiliate before choosing them to sell your product.

Affiliate marketing online to understand how to integrate it into your online sales channel.

Outsourced Sales

It’s not unknown that many small business owners are short on time, so they often choose to outsource their sales needs to other companies. One advantage of this sales method is its flexibility. You can choose to outsource a particular aspect or the entire sales process, such as “growing a contact.”

An effective online technique is Inbound Marketing and Lead Generation to support a specific event or product launch. The inherent disadvantages include budget constraints and a loss of control over sales strategies.

Value-Add Resellers (VAR)

Value-add resellers (VAR) purchase a company’s products, modify them, and then resell them. More common in the technology sector, the modifications add value to the product, which is subsequently sold to customers. A good example is a computer manufacturer buying processors to produce their PCs.

Since VARs often perform technical activities beyond a customer’s capabilities, they can significantly expand your product’s audience. However, some VARs may deny companies access to their customer information, and businesses may encounter channel conflict issues if they work with multiple resellers.

Printed catalog

Considered obsolete by some entrepreneurs, catalogs are still an effective sales channel for targeting specific markets with physical products. Catalogs not only provide an attractive and tactile alternative for customers to view products but also allow you to attract more traditional buyers who may not want to or cannot visit your physical store.

However, the sales path of printed catalogs presents interesting alternatives in online strategies, such as e-commerce. Still, it is not without pitfalls. On one hand, there’s a risk of distributing cheap, low-quality brochures that tarnish the brand’s years of built-up quality perception. On the other hand, there’s a risk of burning significant budgets on glossy catalogs full of expensive advertisements and trendy but equally expensive images.

Telemarketing

Telemarketing is an ancient but effective sales channel when used correctly or in conjunction with e-commerce or printed catalogues. However, it’s crucial to avoid irritating potential customers with too many calls or being too pushy. This is a job for sales professionals who know the right techniques to close sales.

It’s also very effective as an alternative to online purchasing, without outbound calls, as done by some ferry companies.

Online Sales Channels

According to recent statistics, e-commerce sales worldwide amount to 39.4 billion. This is a revealing sign of how the use of online sales channels and e-commerce should be one of the top priorities in your business.

If you decide to create your e-commerce store, you need to act quickly to leave no room for competition, Use some small tricks to enhance conversion:

  • add high-quality product photos: it becomes easier for potential customers to imagine using the product or enjoying the unique features of having that product. The clearer the images are in their mind, the easier it is for them to decide to hit the “Buy Now” button. That’s why professional writers try to use mental imagery words when writing, because they know how important it is for potential customers to visualize the benefits of a product.
  • display product ratings and customer reviews: these can psychologically influence potential customers to make a purchase. In the book “6 Principles of Persuasion,” Robert Cialdini explains the principles of persuasion (Reciprocity, Scarcity, Commitment and Consistency, Authority, Liking, and Social Proof). The Principle of Social Proof states that a decision is based on collective approval. The fact that customers can perceive that other people are buying a particular product through reviews and ratings increases the likelihood that they will also buy it. It’s no coincidence that even Amazon includes these conversion optimization elements on its product pages.
  • add an item with limited availability: a technique related to the Principle of Scarcity, showing the stock quantity of an item on your site is crucial because it compels your audience to act immediately to avoid missing the purchase opportunity.

sales channels persuasion principles

Here are the online sales channels:

  • your website

Making your e-commerce platform is a costly project, but with the right strategies, it could become a great deal. You don’t necessarily have to have complete production, warehousing, and distribution channel management. A low-cost option that is very popular today allows you to minimize risks and avoid costly mistakes, known as dropshipping.

Nothing prevents a company from having its e-commerce strategy and relying on other channels to reach as many customers as possible.

  • online marketplaces

Online markets are virtual places that include platforms like Amazon, eBay, Zalando, Privalia, Spartoo, and many others. These are popular digital sales channels used by businesses of all sizes. The marketplace is an indirect sales channel. A small business is likely to have access mainly to customers in the immediate vicinity. By selling through an online sales channel, you could reach a broader network of potential customers who might not otherwise be aware of your products. As an additional benefit, using this channel can help reduce marketing costs.

New distribution channels

New distribution channels emerge from the need to quickly adapt to new consumer habits and trends. Not all models are suitable for every type of business, but they are certainly options to consider. Among the new sales channels are:

  • pop-up and mobile stores

Mobile pop-up stores appear in a temporary location for a limited period. It’s a very creative idea that usually features highly imaginative constructions in the form of boxes, containers, and other eye-catching designs.

  • virtual stores

This type of store is a very innovative channel. It’s a physical place where you can shop online, accessing product descriptions, video content, and reviews. The added value will be the support of salespeople who are there to advise customers and provide assistance when needed. Some choose to keep limited repairs to showcase the quality of the offerings.

  • kiosks

Kiosks are more common in malls and are more visible because they are generally located in high-traffic areas. They are useful for selling small-sized products or offering services. It’s possible to imagine an integration with the virtual store to expand the offering.

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Tools and strategies to support sales channels

There are more suitable and effective sales channels for gathering the highest number of sales by targeting quality and volume for our business. Solutions certainly vary and depend a lot on the type of company you want to start, but if you want to keep up with the competition, and especially if you want to stand out.

The increasing adoption of digital has placed more emphasis on e-commerce. For many companies, it makes sense not only to sell their products and services, but also to sell them online. Internet usage, especially smartphones, is increasing worldwide, and consumers want to do everything online, from researching to making the final purchasing decision.

Now, over 80% of consumers research online before making both physical and digital purchases. If they find a better deal online, they often prefer to buy online rather than in a physical store if it means significant savings.

Today, the web is a powerful communication medium that supports both offline and online businesses. The new buzzword is Omnichannel e-commerce, a synergistic integration between offline (physical) and online business activities aimed at creating a single and effective sales system.

Therefore, it’s essential to understand how users act throughout their entire purchasing process, the Customer Journey, to make any necessary adjustments to your strategies and identify the best marketing techniques to increase final conversions.

And it’s precisely Omnichannel e-commerce that allows us to do it best, synergistically conveying both the growth of your online store and that of your physical point of sale.

Selling today means the company uses more than one sales channel simultaneously, both physical and electronic, to reach as many customers as possible. Below, you’ll find a list of some tools to support online sales channels.

Artificial Intelligence (AI)

Artificial intelligence is now a fundamental ingredient in all areas, including sales activities, and often we don’t even notice it.

We have all firsthand experience with buying on Amazon. According to recent statistics, about 40% of Amazon’s revenue is generated by its recommendation engine, which is powered by artificial intelligence. This is a huge figure for an organization that enjoys steady annual growth. It demonstrates the power of data analysis in predicting what the customer wants and then offering it to them.

Increasingly, Artificial Intelligence (AI) is lending a hand to all sales channels and marketing professionals, reducing manual workloads and enabling them to make rapid, large-scale personalization decisions to improve their targeting.

Thanks to AI-based predictive analysis, past customer behavior is tracked and recorded, allowing marketing channels to personalize messaging and double down on what has worked with similar customers. The better the artificial intelligence, the better the marketing personalization: thus, messages are more relevant and targeted, resulting in higher performance, lower spending, and less waste.

sales channels marketing

It’s important to keep in mind that, on average, salespeople spend 80% of their time building and enriching leads, and only 20% on selling, which is a rather serious imbalance. With AI-enabled CRM, salespeople can return to what they do best: building great customer relationships and closing deals. AI will not only relieve staff of mundane tasks like sending emails, making phone calls, etc. but also give them newfound freedom to focus their time on closing operations.

The ability of artificial intelligence to sift through millions of leads in a very short time is perfect for sales teams. Identifying those who can benefit from a follow-up email or another specific step becomes an almost automated and natural part of daily sales processes. And AI can certainly help improve any sales tool, especially online sales channels.

Thanks to the increasing Internet of Things (IoT), we are communicating with physical objects such as vehicles, appliances, and wearables that are connected to the Internet, so they can transmit important data online (from the industrial gas cylinder that signals when to replace it to the heart implant that allows the doctor to remotely monitor the patient to the refrigerator that announces when it needs replenishing).

IoT applications for both businesses and consumers continue to proliferate, and thanks to a growing number of connected devices, customer data can be recorded and collected from countless external sources. As such, real-time customer behaviour can essentially be analyzed by automated CRMs to refine their algorithms to improve audience targeting or personalized clusters.

Narrative Science claims that 44% of executives believe the most important advantage of AI is decision-making. By targeting the audience with microscopic granularity, organizations, and their sales channels can give their customers exactly what they want.

 

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Price comparisons for e-commerce

Comparison engines are a powerful support for online sales channels that can be leveraged to increase sales. Based on Custom Search Engine (CSE) technology, price comparisons aggregate product and price information from a variety of suppliers and display the results on a single web page. This allows buyers to quickly and easily compare product descriptions, prices, and shipping options, and make a final purchase decision.

Google Shopping is one of the largest and most well-known CSEs. Retailers list their products on the service, which is integrated with Google Search. This means your products will be seen by a broad and untapped audience of users and potential customers, and you will only be charged when a user clicks and lands on your product page.

Here are some examples of the best price comparison sites:

It’s important to note that with some comparison shopping engines, you may be tempted to lower product prices, thinking it will keep you competitive. Therefore, those offering particularly unique products with special features with which they are confident they can stand out in the market may feel excluded. In reality, this can easily be avoided by rotating proposals, selecting ad hoc groups of products, and offering them to the right CSEs to assess which one will offer the best ROI.

Although it may take some time to find the right formula, the advantage of using a comparative shopping engine lies in the opportunity to showcase your products to reach the right audience at the right time.

Social Media

Word-of-mouth (WOM) marketing is a powerful tool that businesses can use to bring in numerous warm leads through word-of-mouth, also known as Buzz marketing.

In the past, consumers’ ability to share their opinions about a product with the community was limited at an individual level. Today, everything is much faster and direct. People can transmit their approvals or positive reviews of a company within seconds through their social media accounts. In short, WOM marketing has become even more accessible to entrepreneurs nowadays through the power of social media.

That’s why social media is one of the best supports for sales channels to generate leads and capitalize on the potential impressions of around 2.3 billion social media users worldwide.

Social networks allow you to:

  • use paid ads + choose the right social media network: if your target audience is on LinkedIn, it’s unnecessary and uneconomical to use paid ads on Facebook! In essence, it’s crucial to discover which social media platforms your target audience frequents and use your paid ads there.
  • use influencer marketing: involving and promoting influencers in such a way that they leverage their audience to create new leads, increase interactions, and enhance the company’s awareness.

 

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Company blogs

Company blogs can be a simple and cost-effective method to increase traffic to your website and acquire more customers.

The key to blog success is relevance. If you produce an article that reaches your target audience, anticipates their needs, or answers any questions, that piece of content will boost your brand’s reputation and establish it as an authoritative source of information. Regardless of your product or service, it’s important to avoid overt selling in favor of content closely tied to selling points, product uniqueness, and therefore valuable content: this will make your audience more likely to trust and purchase.

“About 70% of consumers claim to be more likely to buy from a company that provides customer content.”

A useful place to start with creating high-quality blog content is the ‘how-to‘ article format. Regardless of your industry, whether your article is titled “How to Wash Lettuce” or “How to Cook Bear with Blueberries,” this type of content should be highly informative to become a perfect sales vehicle to subtly promote your brand.

Whether you have the resources to produce a blog post once a week or once a month, it will help increase your business’s search ranking and provide interesting and unique content that can be promoted through social channels to further increase visibility and generate more sales on your website.

Online Ads

There are different types of online ads you can use to grow your business:

sales channels display advertising

With the growing number of Internet users (over 4.3 billion in 2018), there are many advantages for entrepreneurs to use online ads as one of their main marketing channels.

The key here is to find out which type of online ad to use and which strategies to use to reach target customers and lead them to conversion. Here are some insights:

  • search the sites visited by the target audience. Instead of simply typing the keyword into search engines, it’s very helpful to use Google’s advanced search queries to quickly identify niches with low competitiveness percentages and therefore easier to capitalize on.
  • check the site
  • contact competitors if they have a decent number of monthly visitors.
  • contact the Display site to understand which advertising rates and options are best for your company. Newsletters, banner advertising spaces, sponsored posts.

Video content

For any business, especially for those with an e-commerce function, video content is now an essential component of effective customer engagement and conversion (it’s no accident that YouTube is the second-largest search engine in the world with over 3 billion searches per month). It is the ideal creative medium through which you can share informative product videos or brand stories to engage your audience.

Who hasn’t seen the video from the technology brand LG created to showcase the extremely realistic colours in their new monitors? In that famous video, the elevator occupants felt like they were falling into the void simply because, unbeknownst to them, the floor had been built with monitors projecting a 3D freefall. That video was not only an innovative product demo that garnered over 26 million views on YouTube, but it also significantly boosted the brand’s visibility.

Today, it’s easier than you think to create exceptional video content on a limited budget, whether you use a basic camera, an iPhone, or a desktop. There are countless applications or software you can use to make the editing process as painless as possible. And once you’ve incorporated a compelling call-to-action, you’ll set the stage for a positive impact on your sales channel.

Email marketing

When it comes to generating a return on investment, email marketing has always been a reigning sales channel with a high ROI.

Due to its permission-based nature, email marketing serves as a powerful conversion channel, mainly because the audience you’re communicating with has consciously chosen to learn more about that brand and its products and services. It’s a direct channel that allows you to promote a more personal relationship with customers, which you can leverage to increase sales. With this in mind, it makes sense to try to grow your subscriber list as much as possible by optimizing your website with important calls to action to encourage visitors to sign up for high-quality content.

By repurposing blog articles and video content, the company could easily coordinate a periodic newsletter that demonstrates its value leadership to the customer. Building your reputation by offering newsletters with quality content consistent with your audience, customers will be infinitely more inclined to purchase.

Mobile

As digital sales channels inspire advanced levels of interconnectivity, the rise of mobile commerce has been somewhat inevitable. Over 80% of mobile device searches for local commercial information result in a purchase. This means that all businesses now have the responsibility to consider and integrate mobile into every aspect of the customer experience.

Mobile provides your company with the opportunity to interact directly with customers anytime, anywhere. You can send special offers, discounts, and personalized messages based on their location, in an attempt to get them to buy immediately or at their convenience.

To harness the ability to convert customers entirely through mobile devices, the company’s website must be fully optimized for mobile devices. Choosing the Mobile-first model means that the site will automatically adapt, optimized for the mobile device on which it’s viewed. It’s essential to always ask yourself whether your site makes it easy to fill out a contact form, find a specific product, or whether the checkout process is genuinely seamless.

If some of these critical but fundamental actions are difficult to complete, it’s necessary to build the website with a mobile design, thus making the Customer Experience more pleasant and natural. So, to maximize conversions and fully leverage the online sales channel, it’s necessary to avoid poor design, complicated processes, and limited payment methods.

Native mobile apps

Native mobile apps differ from Mobile-First websites in that they offer richer features, such as camera usage, microphone, GPS, security mechanisms, and more. These functionalities open doors to new engagement modalities, such as Proximity Marketing.

Simple responsiveness is no longer sufficient; sophisticated users expect to be able to perform complex activities directly from their mobile devices, making it even more essential for any online sales channel to have a complete mobile experience. But beware, the app becomes a second platform to manage, and this must be done with the same care as the website, otherwise, you risk spending money on the development of a mobile app that is not used by users because it does not offer a positive experience.

Guest checkout

Guest checkout is a Lead Generation tool disguised as a digital sales channel. It helps expose list prices and show available inventories without forcing the user to create an account or log in. As new customers find the site through organic search and digital marketing, a single order can become the gateway to a new customer or even an entirely new market. In a way, guest checkout often becomes the proof of concept for the shopping experience.

checkout on sales channels

An efficient checkout experience is capable of providing new leads to sales, as well as encouraging new buyers to learn more about the company and the solutions offered.

Conclusion and advice

Now that you have a grasp of the details of various sales channels, you have more elements to conduct a thorough analysis of your company’s strategy and strive to optimize it to gain market share and reach a larger number of customers, providing them with the best possible shopping experience. We have also outlined tools and strategies to enhance sales while offering customers excellent service.

To achieve success, everything must be in perfect harmony, so take the time to study every detail, and if necessary, request personalized strategic consultation.

 

If you desire to engage in a more in-depth conversation with an industry professional, request a free strategic consultation