How a holistic brand helps web retailers avoid channel conflict

Despite the fact that more retailers are embracing multi-channel merchandising, channel conflict is still prevalent in many organizations.

To avoid conflict and work in ways that generate more opportunity, retailers should do more to think of their stores, catalogs and web sites as a single brand, Paul Miller, vice president of e-commerce, Williams-Sonoma Inc., will tell attendees at the Shop.org 2005 Annual Summit in Las Vegas next week.

In the early days of e-commerce, many retailing organizations set themselves up for potential channel conflict by establishing their e-commerce initiatives as separate entities. But to minimize potential conflict and avoid obstacles, retailers should consider organizing all of their channels and multi-channel merchandising initiatives around a single brand concept.

At Williams-Sonoma, which generated e-commerce sales of $477.5 million across multiple sites in 2004, the company and its organization are built around several separate brands, including Williams Sonoma, Pottery Barn, Pottery Barn Kids, Hold Everything and West Elm.

“Potential channel conflict can be avoided if managers and workers are compensated and rewarded on how they work to promote the overall brand,” Miller says.

Channel conflict also is diminished once multiple parts of the organization begin to realize the importance the web plays in a multi-channel strategy. “In many organizations, the e-commerce operation may have started as a skunk works that didn’t generate substantial business compared to stores or catalogs,” Miller says. “Now e-commerce is a bigger part of the business and people are beginning to realize the value and how the web can work to drive sales across the brand.”

Channel conflict also can be avoided if a retailing company adopts a more holistic view and sees the web as more than a minor sales channel and cost center.

In fact, a growing e-commerce base can naturally help to end potential channel conflict. “The web can help to build brand equity,” Miller says. “Channel conflict is avoided when the company can see that e-commerce is generating more online sales, helping to promote the catalog and driving sales to stores.”

Miller will be part of a panel discussion entitled “Measuring the Cost of Channel Conflict” at 3:30 p.m. on Tuesday.