The Intelligence-LED E-Commerce Battle of the Brands
To Be A Premium Brand ...To be a premium brand, you need to gain and maintain reputation with customers, partners and shareholders. Reputation and premium status are inextricably linked. You need premium status to “attract” customers and to charge a premium; higher margins increase profitability.
E-Commerce is a battleground with significant threats posed by others who want to exploit your hard-earned reputation, status and associated revenue. There is a range of threats exacerbated by the internet—counterfeit, gray market, supply seepage of genuine product—these threats are posed by unauthorized resellers. In military parlance—the enemy—the ‘Red’ forces. Some enemies have to be removed from the battlefield; some may be reconcilable. They may have identified demand that they can meet that authorized resellers do not, so why not meet that demand by bringing that unauthorized reseller into the fold? Unauthorized reselling of everything from genuine products to gray market to counterfeits, is the primary threat to a premium brand and that brand’s reputation, status and value.
Unauthorized resellers (of both genuine and non-genuine products) have a significant impact on the revenues of authorized national operations and resellers. And consumers, believing they have genuine products from genuine resellers, are disgruntled when they discover they cannot get service/repairs for their products—or worse, when they discover their product is apparently fake—impacting the manufacturer’s reputation.
Then there are the friendly forces—the partners—the “Blue” forces. Of course you want to keep an eye on your partners and ensure that they are doing what you want them to do. Policies and control measures can be put in place for friendly forces/partners, such as MAP/UPP in US and Selective Distribution in Europe. It is a control mechanism. But here is the twist. If you focus on controlling friendly forces (because it is easier), you bury your head in the sand and ignore the build-up of enemy forces that are intent on attacking you, potentially destroying you. Equally your Blue partners can see the Red enemy and are wondering what you are doing about them. If you do nothing, they will. They will lower prices to compete—and Blue-bashing does not help: it addresses the symptom not the cause, and it can destroy otherwise good relationships.
To use another analogy, you are stepping over the dollars in your efforts to pick up dimes.