A distribution channel entails the flow of business between a manufacturer and a consumer. The current distribution flow involves actors that fasten the distribution of goods from manufacturers to end-users using different channels. Product distributors, brokers, sales representatives, and retailers or a combination of the intermediaries facilitate distribution. Men, unlike women, shop for products out of demand or persuasion. The level of product knowledge, technical competence, and specialization has increasingly prompted the need for manufacturers to adopt modern, fast, and reliable distribution channels. Men's footwear has a growing demand. However, it takes the effort of an effective distribution channel to meet the demand. This discussion explores the use of the Internet as a modern product distribution channel for men's footwear. It further discusses how profitable footwear industries use the Internet as their distribution channel against footwear's traditional channels. It will also explain the extent of losing and gaining customers in the new medium and the SWOT analysis.
Ideal Product Distribution Channel for Men’s Footwear
The Internet is a new distribution channel that has revolutionized traditional practices of distribution. It is a global network of interconnected networks. The use of the Internet primarily entails the e-commerce distribution strategy, where there are internet channels, including online marketplaces (encompassing websites of a specific product). There are also third party e-retailers and direct online sales. With the growing nature of access to information through the Internet and homogenization of time, the Internet remains an ideal distribution channel for men's footwear. The Internet provides a worldwide electronic directory where users find detailed information regarding a product (Schmidt et al., 2020). A potential customer of men's footwear can identify an internet source with the product, inquire about the price, determine other options and contact the seller through the Internet. In doing so, the distance or time spent visiting a store's physical location reduces.
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Top American Footwear Manufactures Distribution Channels
The Footwear Distributors and Retailers of America (FDRA) represent and serve 95% of America’s footwear distributors and retailers. According to FDRA’s 2020 report of profitable footwear members, at least seven members recorded successful industry reports. FDRA’s report included Nike Corporation, Adidas, PUMA, Geox, Sketchers, Crocs, and Ecco as the most profitable members (Footwear Distributors and Retailers of America 2020). A review of the distribution channels used by Nike, Adidas, PUMA, Sketches, and Crocs revealed a shift in conventional methods of distribution. Reddy (2017) conceptualizes that technological advancements are slowly killing the presence of physical retailers. He adds that instead, retailers are adopting digital business, which had a significant impact on consumer decision making, as he explores the case of Nike's footwear retail store in South Africa.
Nike, Adidas, PUMA, Sketches, and Crocs remain successful and profitable due to the adoption of e-commerce distribution channels. In 2019, Nike introduced an online distribution strategy for its footwear, and the results showed a 35% increase in digital sales, with the company's consolidated revenue increasing by 7% (Oberoi 2020). Additionally, Adidas's digital focus had revolutionary aspects that include devising the Adidas App that allows consumers to make purchases virtually through their phones using the Adidas App (Adidas 2019). Adidas reported the utilization of the app as a turning point to the company footwear sales in 2019. Over the years, Adidas continue to develop methods of making consumers enjoy their app, further enjoying their purchase experience digitally. Similarly, PUMA and Sketches' success from 2019 reports shows the success of online presence in the distribution channels, which resulted in increased sales and higher consumer insights and demand.
Non-Traditional Distribution Channels versus Current distribution Channels
The Internet is the primary non-traditional channel that has evolved over the years, further revolutionizing the new setting's distribution sector. Most footwear manufacturers gear at improving their online platforms and increase their distribution. Nonetheless, the traditional distribution methods, including direct sales, wholesales, and sale agents, are not entirely drawn away. Their presence in the market is slowly diminishing as the digital space occupies a significant part in distribution. Whereas the distribution aspect to end-users remains the same, there are striking differences in using the Internet and the conventional retailers distribution.
The current use of retailers and wholesalers as distribution channels for men's footwear tends to focus primarily on distribution, where a customer gets the product as demanded. Other customer needs get ignored. This is different from the modern e-commerce form of distribution. Using the Internet allows the consumer to identify the product,view features like size, color or model then order the product. The difference occurs in the after-sale services to consumers. Using online apps, for instance, to make a purchase, allows customers to give reviews of the product. If the shoe fits well, one can provide a five-star rating or a comment on the website or app. Online distribution channels are engaging, where most of them have CRMs(Customer Relations Management systems) that account for complaints and reviews, then act accordingly. Consumers gey a chance to participate in the creation process, where manufacturers consider them co-creators (Pereira 2019). Undoubtedly, customer satisfaction for footwear using online distribution channels constitutes 100% feedback.
Partnerships are easily created when using online distribution channels, unlike the single pathway in retail distribution. Men's footwear, like garments, follow trends. Thus, partnerships with customers and other organizations help gather research information on product improvement and modification. Such partnerships are possible using the Internet. Customers are easily convinced to buy a product online, unlike retailers (Matarazzo et al. 2021). This follows the procedure taken by footwear companies before posting their products online. The aspect of the product's value remains chief among the considerations, unlike in the retail distribution.
The Internet as a modern distribution Channel; Extent of gaining new customers and loosing old ones due to Change
The digital era of using the Internet as a channel of distribution is indeed a change from the conventional methods. Although most footwear companies report better sales and customer experience, it goes without mention that aspects of rigidity play a part in either retaining or adding customers. To a greater extent, it is easy to gain customers using the Internet that lose them. Currently, about 75% of the world's population uses the Internet. It is worth mentioning that such a population is unlikely to miss out on a new product launched or a footwear price cut. When manufacturers utilize using the Internet for distribution, they will attract more customers. Additionally, positive reviews on a product on the company's website would imply that the company attracts other customers through existing ones. Companies need to give the right products and attract positive reviews that retain and add customers.
There are fewer chances of losing customers using internet distribution. Customers may fear additional online distribution costs that include delivery charges or shipping costs (Wagner 2020). It is unlikely that such issues affect sales and distribution insignificantly. One thing that stands out that such prices remain discounted from the actual costs of traveling to the stores or using retailer services.
SWOT Analysis and Position on the New Distribution Channel
The growing popularity of internet distribution awakens thoughts that the Internet will remain, at least for a long time. This further implies that businesses consider a SWOT analysis of using the Internet as a distribution channel for men's footwear before adopting it. In this regard, an analysis of using internet distribution for men's footwear is articulated below;
S-Strengths : The Internet is a popular platform that is globally interconnected individuals. A business's presence implies that the business's activities, products, and sales are observed globally. Thus the strength of having limitless customers prompts the need to adopt the e-commerce distribution channel.
W-Weakness: There are costs involved in using internet distribution. A website alone is costly, with fees applicable to gain mass viewership. There are also incidences of online fraud and insecurities which threaten the use of internet distribution.
O-Opportunities : Internet distribution provides users with a chance to grow a vast network of consumers, which widens the market and creates room for rapid growth.
T-Threats : Most manufactures are shifting to the use of internet distribution. This informs of widening competition for distribution of similar products. Users must design useful and appealing products to win customers.
In the view of the SWOT analysis of using the Internet as a distribution channel, a shift to using it would not harm. The practices of distribution get improved over time, which means that learning and re-designing new methods becomes a norm for a men's footwear manufacture.
Overall, this discussion explores the importance of using the Internet as a means footwear distribution channel. Insights and research from profitable footwear companies like Nike, Adidas, PUMA, Crocs, and Sketchers show the growing demand for men's footwear and the Internet's extensive usage for better results. Compared to the traditional wholesale and retail channels, using an online distribution channel saves time and allows the consumer to give a review of the product and assist in the co-creation. Additionally, using online distribution gives room for partnerships, which help in improving outcomes. The standing comparison between the two further suggest that it is more comfortable gaining and retaining customers from internet distribution than losing them. Using SWOT analysis, the research suggests adopting the Internet as a men's footwear distribution channel for better outcomes. It is essential to keep improving on the methods and the product.
References
Adidas . (2019). Retrieved from Adidas Annual Report 2019: https://report.adidas-group.com/2019/en/group-management-report-our-company/corporate-strategy/sales-and-distribution-strategy.html
Footwear Distributors and Retailers of America . (2020, November). Retrieved from Footwear Distributors and Retailers of America: https://fdra.org/about-fdra/members/
Matarazzo, M. P. (2021). Digital transformation and customer value creation in Made in Italy SMEs; A dynamic capabilities perspective. Journal of Business Research, 123 (1), Journal of Business Research.
Oberoi, M. (2020, July 25). Analyzing Nike's Distribution Channels and Retail Strategy. Market Realist , pp. 1-4. Retrieved from https://marketrealist.com/2019/10/analyzing-nikes-distribution-channels-and-retail-strategy/
Pereira, D. J. (2019). NikeiD: a case study on footwear customization (. Dissertation.
Reddy, G. (2017). Digital marketing impact on the consumer decision making process in Nike's customer retail operations in South Africa. Pretoria: University of Pretoria.
Schmidt, V. K. (2020). Trajectory dependence, lock-in effect, and cluster decline: A case study of the footwear cluster in Sinos-Paranhana Valley. Latin American Business Review, 21 (4), 371-391.
Wagner, G. S.-K. (2020). Online retailing across e-channels and e-channel touchpoints: Empirical studies of consumer behavior in the multichannel e-commerce environment. Journal of Business Research, 107 , 256-270.
