Why read this? : We share which activities are must-haves in bricks and clicks commercial planning. Learn why you need marketing, customer service and supply chain plans before you talk to a retailer. Read this to be better prepared for bricks and clicks commercial planning.
Bricks and clicks are one of the most popular online retailer channels. These retailers have both physical stores and e-Commerce sites. See our articles on the grocery, fashion and alcohol categories for examples.
They’re a popular option in e-Commerce planning because they attract lots of shoppers. You can drive a significant amount of online sales if you get your presence right with them.
You may well already have a commercial agreement with them to sell through their physical stores. But when they start to sell your products online, there are 3 extra factors you’ll need to cover as part of your commercial planning :-
- online marketing support.
- customer service.
- supply chain.
Online marketing support
First, you have to plan how you’ll use marketing to drive your sales on their site.
As part of your bricks and clicks commercial planning, you identify what activities will drive sales, how you’ll do them, forecast their impact and cost, and evaluate their Return on Investment (ROI). The priorities are normally around :-
Customers need to know your product is on the retailer’s site and be able to find it before there’s any chance of a sale.
You’ll need to work with the retailer to plan who does what to make customers aware of your pages.
In general, retailers care about the total number of visitors to their site, rather than to specific pages. The onus will be on you to make your pages stand out.
Digital display advertising
For example, say you run display adverts linking to your product pages on the retailer’s site. What does that mean for other display adverts you run to drive traffic to your brand website? What does it mean for your online selling with other retailers and channels?
You’ll likely need to run multiple digital campaigns pointing to your website and to different product pages on different retailers.
Commercially, you’ll need to look at how much you spend, and how you evaluate each campaign’s reach and effectiveness.
As part of your marketing commercial planning, you’ll also need to look at how much you spend advertising on 3rd party sites versus how much you spend on the retailer’s site.
Many retailers boost their income by selling advertising space on high-traffic parts of their sites. On the home page, on category entry pages, and even letting brands create their own bespoke product pages.
Buying media with the bricks and clicks retailer is usually part of your commercial planning negotiations with them. Your adverts get a specific number of impressions and placements based on how much you spend. Many retailers now have their own in-house media teams. But often, you have to buy fixed packages or use your media agency to negotiate with them.
Most retailers also run regular seasonal promotions at peak times like New Year, Easter and Black Friday. (See our packaging for e-Commerce article for examples). You need to plan your level of involvement and spend in these. This affects your forecast and your profit and loss with that customer. The more you spend with them, the more you need to sell, and the more you expect to get from them in return. If you choose not to promote, you need to work out how much, if anything, you will lose to competitors who do.
Similar thinking goes into your SEO planning.
In general, you want brand-specific terms to drive traffic to your brand website. But you have to decide where you want to drive customers who search on buying-related terms. e.g. where to buy brand X, best price on brand X, how to order brand X.
Some retailers will do paid search in these areas depending on the category. But others will expect you to do (and pay for) that.
In particular, you should plan how to handle searches like “brand x and retailer y”. Those should get picked up by the retailer’s organic search set-up. But you’ll need to work out whether you need paid search over and above that.
Some of these posts will be simple. For example, launching an innovation and telling people where they can buy it or publicising new store listings are common brand social media posts.
You should plan how these posts fit into your overall social media presence. For example, how often you run them. Which specific retailers you mention. How you ensure they have the right tone of voice. How much you spend to boost them. If you do something on social that drives traffic to the retailer’s site, you expect to get something in return for that.
Brand website links
Lastly, in terms of traffic-driving activities, there’s what you do to drive traffic to the retailer from your brand website. For example, do you have “buy now” buttons that take customers directly to product pages on each retailer? Do you give one retailer more prominence over another?
If you have a particularly high traffic site, could you use this as a lever in your commercial planning negotiations with them? For example, if you send traffic to a specific retailer, what will they do for you in return?
Overall, it’s in both your interests to drive traffic to your product pages. The commercial planning focus here is usually around what you agree to pay for, and what you get back from the retailer for doing so. The goal is to make your products visible and easy to find on their site.
Here, the focus shifts from awareness to driving consideration and trial. In simple terms, you want to make your products look and sound good, with accurate and engaging information so you drive your fair share (or more) of conversions.
You have to understand your obligations in maintaining this. Usually, it’s on you to ensure the accuracy of the images and information. However, you’d want to align with the retailer on how frequently the information should be checked, and how quickly it should be updated when changes occur. You should also agree on what happens if inaccurate information appears, and you’re unable to access their systems to change it.
Your commercial agreement with them should also specify who is legally responsible if any wrong or misleading information appears. It’s “your” product information, but it’s on “their” (the retailer’s) website. For example, what if inaccurate allergy information is included on a food product and someone falls ill? Your online retailer agreement has to make clear who is responsible in those circumstances. (In most cases, it’ll be you, unless you can show the retailer was at fault).
Data and insights
Due to data privacy laws, you’re unlikely to get specific customer-level data from them.
However, they can often share aggregated segment data, where you can research or target customers with similar profiles. For example, those living in certain neighbourhoods (e.g. inner-city inhabitants vs. suburban types) or having certain lifestyle traits (e.g. young families vs. retired couples).
You should also work with the retailer to agree on what level of sales data they’ll share. For example, do you only get your own sales data or can you also get category sales? Do they only share an aggregate sales total or can it be more broken down by store and or by timing?
This can be very helpful to work out the impact of your advertising and promotions.
Similarly, you should discuss how you share insights with them.
You know more about what drives the customers in your category than they do. These insights can help drive sales.
But the retailer will know more about online shoppers in general than you. In particular, they can help you understand which of the 3 main drivers of what online shoppers want (convenience, range and price) matter most in your category.
In general, any issues relating to the product are usually your responsibility to fix. Anything relating to the order to delivery part of the customer journey is usually the retailer’s responsibility.
However, there are grey areas, In most cases, the retailer will try to push complaints and refunds your way if there’s any ambiguity.
For example, what happens if a customer buys your product, but isn’t happy with its quality when it arrives? Is that your responsibility or the retailer’s to resolve? The retailer will normally handle refunds (as they handle payments). But if the fault was on your product, they’ll try to claim the money back from you. (Including the delivery cost).
So part of your commercial planning agreement with them should identify under which circumstances you’ll cover refunds. You’ll need to identify scenarios and agree on customer service processes to fix issues.
These should also cover who pays if your product needs special packaging for online deliveries. For example, if it’s fragile or has to be transported under specific temperature conditions. Someone has to pay for that. The retailer will expect it to be you unless you agree otherwise. (See our role of packaging in e-Commerce article for more on this).
Generally, if the product was in good condition at the retailer’s warehouse, anything that happens to it after that is down to the retailer to manage. However, you’ll need to make sure this is clear in your commercial planning agreement, so they don’t charge you for extra damages and refunds.
Finally, in terms of your bricks and clicks commercial planning, you’ll need to align on how the whole supply chain works. From your warehouse to the shopper’s doorstep.
The retailer will expect you to fit into their supply chain set-up for online sales.
That will be different depending on whether they manage online orders from a central warehouse or pick online orders in-store.
So, you’ll need to get to grips with how these supply chain systems and delivery costs work. You don’t want to get hit with unexpected costs or problems. For example, who pays the transport costs to move products around? When and how are those costs allocated and paid? When does the retailer actually pay for and take “ownership” of your products?
You also need to understand how the online retailer will manage stock levels. For example, how fast do you need to re-supply when they sell products? Should they limit the number of items per purchase, so your stock doesn’t get drained? How do you manage returned products? Do these go back into the system or are they destroyed? If they’re destroyed, who pays for that? And who pays, if they’re sent back to you?
These supply chain costs have a big commercial planning impact. Someone has to pay for them. You’ll need to agree who that’ll be with the retailer, otherwise, they’ll expect it to be you.
Conclusion - bricks and clicks commercial planning
Though selling via bricks and clicks retailers is clearly popular, it’s a mix of opportunities and challenges.
On the plus side, they’ve lots of customers already. Chances are you’re already selling with them. And of course, they’re set up to handle the whole order to delivery system for you, so one less thing for you to worry about.
However, in terms of commercial planning, there are challenges you’ll need to work through with them.
For example, how the marketing will work. How you’ll handle customer service side. And the many challenges of getting the supply chain right. In each of these areas, the big commercial question boils down to who will drive it and who will pay for it. If you don’t agree these up-front with the retailer, they’ll expect it to be you.
Packages inside a courier van : Photo by 🇨🇭 Claudio Schwarz | @purzlbaum