Dealing with fragmented channels

Jean-Paul Evrard

Most of our clients face challenges when dealing with fragmented, “on-trade”, or traditional channels. It is true that these channels are difficult to reach, but they also offer great opportunities in terms of consumer reach and potential value. The key to successfully reach these channels is to master the RTM (route-to-market).

The complexity of the route-to-market in fragmented channels speaks of the difficulties and intricacies related to reaching customers through diverse and dispersed distribution channels. In fragmented channels, products and/or services are distributed through various means, such as multiple retailers, wholesalers, online platforms, or niche marketplaces, creating a fragmented landscape that poses unique challenges for businesses trying to reach their target audience effectively.

Some of the contributing factors to RTM complexity in fragmented channels include:

Channel diversity: The presence of multiple channels, each with its own requirements, dynamics, and consumer behaviors, can make creating a unified strategy challenging.

Logistical challenges: Coordinating logistics across fragmented channels can be complex. Each channel may have different shipping, inventory, or fulfillment requirements.

Information management: Gathering, analyzing, and utilizing data from various channels to understand customer preferences, buying behaviors, and market trends can be difficult when dealing with fragmentation.

Consistency and branding: Maintaining a consistent brand image and messaging across diverse channels is essential, but it can be complicated due to differing audience perceptions and channel-specific requirements.

Competitive landscape: In fragmented markets, competition might vary across different channels; requiring businesses to adapt their strategies to each channel to stay competitive.

Resource allocation: Allocating resources effectively across multiple channels, while ensuring a sufficient return on investment, can be a balancing act.

To effectively navigate the complexity of fragmented channels, businesses should consider:

Segmentation and targeting: Identifying the most profitable channels and customer segments to focus efforts and resources.

Technology integration: Using integrated systems and technologies that streamline operations and data management across channels.

Flexible strategies: Adopting adaptable strategies to accommodate the unique needs and characteristics of each channel.

Collaboration and partnerships: Forming strategic partnerships or collaborations with key players in various channels to enhance reach and efficiency.

Constant evaluation and adaptation: Regularly assessing performance metrics and market trends to adjust strategies accordingly.

Ultimately, successfully navigating fragmented channels requires a deep understanding of the diverse landscape, a flexible approach, and strategic decision-making to effectively optimize the route-to-market.