“Despite their prevalence and importance to firms, multi-channel distribution systems remain poorly understood. This book provides an original and much-needed framework for examining such distribution arrangements. It does a masterful job of blending academic research, both classic and emerging, with cutting-edge industry examples and case studies. The book is packed with original insights; in particular I found the discussion of performance metrics to be outstanding. It will be an invaluable resource to a number of audiences, including academics, marketing and sales practitioners, and regulators. Professors Ailawadi and Farris clearly got multi-channel distribution right.”

Jan Heide

Professor, University of Wisconsin School of Business

“The digital revolution has fundamentally changed the way that distribution channels work. Along with the opportunities to reach consumers through many different routes comes much greater potential for conflict between manufacturers, retailers, and the other intermediaries in the marketplace today. The insights, frameworks, and in-depth case examples in Getting Multi-Channel Distribution Right effectively separate the signal from the noise. The book is comprehensive and timely, and also an enjoyable read. You'll find yourself referring to it often as you navigate your physical and digital distribution channels.”

Barbara Kahn

Professor, Wharton School, Author of The Shopping Revolution

“Every marketer should read Getting Multi-Channel Distribution Right and have it on their bookshelf. Distribution is arguably the most fundamental dimension of marketing, yet mysterious because few have exposure to the business-to-business “blocking and tackling” which undergirds distribution partnerships. This book is a gift from two researchers, experienced with distribution practice, who are responsible for the marketing literature's richest distribution insights. Kusum Ailawadi and Paul Farris move us from designing a distribution channel from a small set of well understood components to assembling a channel ecosystem with business models that did not even exist a decade ago. In this accessible presentation of modern routes-to-market, they guide suppliers through the triple objective of expanding distribution in the different channels where consumers search for or buy their products, while reducing conflict among channel members and preserving the equity of their brands.”

Leigh McAlister

Professor, McCombs School of Business, UT Austin

“A lot is written about omnichannel retail, and rightly so. But if you are a supplier, you need to figure out how to choose and manage the multiple independent channels, both physical and online, through which you sell your products. That is the challenge Professors Ailawadi and Farris tackle in this timely and thoughtful book. With up-to-date metrics and frameworks applied to live case studies, they pull together a physical and online distribution strategy toolkit unlike any other available today. If you are a supplier looking to bring your route-to-market in line with how consumers shop today, or if you are a retailer, e-tailer, or other intermediary operating in that value chain, or if you are managing a digitally native vertical brand, or if you train any of these aforementioned executives, then this book is an essential read.”

Das Narayandas

Professor and Senior Associate Dean, Harvard Business School

“This book addresses a pressing need in marketing today: the challenge of expanding into and managing multiple channels of distribution. Experienced marketers as well as those new to marketing channels will discover how classic frameworks must be expanded and adapted to manage digital as well as brick and mortar distribution systems. The authors deftly integrate metrics with strategic issues such as understanding consumers' search loyalty, the application and preservation of power, the limits of the direct-to-consumer channel, and policies that achieve the right physical and digital coverage while keeping conflict manageable. The value of the metrics and strategic frameworks is vividly illustrated in cases and examples that span both digital and physical products.”

John Quelch

Vice Provost, University of Miami and Dean, Miami Herbert Business School

“As P&G's former CEO A.G. Lafley said distribution is the “first moment of truth.” If you fail in getting the product to the customer and getting the right support and appeal at the point of purchase, you fail. Ailawadi and Farris provide a comprehensive coverage of multi-channel marketing and its evolution in today's world. With the advent of e-commerce, m-commerce, what Jim Lecinski, Google's former VP of Customer Solutions has called the “zero moment of truth,” and new forms of distribution, a re-boot of how we think about distribution is essential. Few aspects of marketing, if any, have changed more over the last couple of decades than distribution. With real life case examples, Ailawadi and Farris make the issues come alive. They have nailed how to manage your distribution strategy.”

David Reibstein

Professor, Wharton School, Coauthor of Marketing Metrics

“Ailawadi and Farris draw on their extensive consulting and academic experience to provide a compelling account of multi-channel distribution. The book skillfully blends academic insights with relevant examples and provides actionable frameworks and metrics. A must-read for manufacturers and retailers that want to thrive in the multi-channel environment.”

Jan-Benedict Steenkamp

Professor, Kenan-Flagler School UNC Chapel Hill, Co-author of Retail Disruptors

“Digital disruption and the resulting need to manage distribution and demand across channels are critical issues for the leading corporations sponsoring the Marketing Science Institute. But as Professors Ailawadi and Farris note, “getting multi-channel distribution right is about much more than going digital.” Beyond a focus on omni-channel—offering customers a “seamless” experience across touchpoints—the authors demonstrate the equally important need to optimize multi-channel relationships between upstream suppliers and downstream channel partners. Combining rigor and practical relevance, this book provides managers with clear strategic frameworks for implementing multi-channel distribution.”

Earl Taylor

Chief Knowledge Officer, Marketing Science Institute

“Multi-channel distribution is the most important, complex challenge facing manufacturers today. Kusum and Paul explain it using recent examples in plain English. Most importantly, they show how to make realistic solutions work in practice. Getting Multi-Channel Distribution Right is the clearest and most useful book in its category.”

Kenneth Wilbur

Professor, Rady School of Management, UC San Diego

Kusum L. Ailawadi is the Charles Jordan 1911 TU'12 Professor of Marketing at the Tuck School of Business at Dartmouth College. She received her BSc (Honors) and MBA degrees from Delhi University and the Indian Institute of Management-Bangalore, respectively, and her PhD from the University of Virginia. She has been on the faculty at Tuck since 1993 and currently serves as the chair of the marketing department.

Professor Ailawadi's research expertise is in managing the partnership and the power balance between suppliers and their distribution channel members. She has published extensively in the major marketing journals on topics such as the manifestation of brand equity in marketplace performance; the impact of promotions and private label brands on the performance of manufacturers and retailers; and consumer, competitor, and channel response to major marketing policy changes. Her work has won accolades and awards from the Journal of Marketing, Journal of Marketing Research, Journal of Retailing, and Marketing Science for best contributions to marketing theory and the practice of marketing research, for best collaboration between academics and practitioners, for overall best papers, and for long-term impact. She has also written on these topics for practitioner audiences in publications like the Harvard Business Review, Wall Street Journal, Forbes, and Advertising Age's CMO Forum. She teaches a highly subscribed and highly regarded MBA course on multi-channel distribution and consults on these topics.

Professor Ailawadi is the president-elect of the INFORMS Society for Marketing Science and an academic trustee of the Marketing Science Institute and of AiMark. MSI and AiMark are organizations in the United States and Europe, respectively, that bring together academics, senior practitioners, and data providers to facilitate research and idea exchange. She is currently an associate editor for three major marketing journals—Journal of Marketing, Journal of Marketing Research, and Marketing Science—and has served on the editorial boards of several others.

Paul W. Farris is the Emeritus Landmark Communications Professor of Business at the University of Virginia's Darden Graduate School of Business Administration. His doctorate is from the Harvard Business School, where he taught before his appointment at the University of Virginia. His MBA is from the University of Washington and his undergraduate degree is from the University of Missouri. He has also served in in the U.S. Army, worked in marketing management for UNILEVER, Germany, and in account management for the LINTAS advertising agency.

Professor Farris has published twelve books and over eighty articles. He has co-authored award-winning articles on distribution and marketing metrics, retailer power, dynamics of marketing strategy, and marketing budgeting. He is a current or past member of the editorial boards for the Journal of Marketing, the Journal of Retailing, Journal of Advertising Research, Marketing: A Journal of Research and Management, the International Journal of Advertising, and also served as an academic trustee of the Marketing Science Institute. Marketing Metrics: 50+ Metrics Every Executive Should Master, now in the fourth edition, was selected by Strategy + Business, as “2006 Marketing Book of the Year.” His 2015 co-authored paper on clarifying marketing ROI was the Marketing Science Institute's most frequently downloaded paper.

Professor Farris has consulted for many international companies, including Google, Apple, Kroger, Best Buy, and Procter & Gamble. He has provided expert witness testimony in a number of lawsuits involving marketing and distribution practices. Professor Farris has also served as a director on the boards of six companies, including retailers, manufacturers, and distributors.

Over the past many years, the two of us have worked on a number of research articles, industry assignments, case studies, and teaching materials related to the measurement and management of distribution channel performance. Some of this work was together and much was with other colleagues from industry and academia. For this book, the challenge that we set ourselves was to quilt together our own and others' writing and our experiences interacting with executives from a variety of companies and distill what we believe thoughtful managers would find useful.

Jim Weber, president and CEO of Brooks Running, shared details of the revival of the Brooks brand and the company's strategy and has been so generous with his insights and his time in meetings and conversations over almost a decade. Jim, we appreciate it more than we can say!

Jesse LaFlamme, CEO, and Paul Turbeville, Vice President of Marketing, at Pete and Gerry's Organic Eggs offered an inside look at their distribution expansion and their data and patiently answered all of our many questions. Robert McDowell, Chief Commercial Officer of Choice Hotels, made time, multiple times, to discuss the travel industry with us and give us his insights. Michael Campbell, CEO of Leather Italia, allowed us to tell the story of his company's early years. You all have made this book possible.

Many other friends from industry made time for conversations and interviews – Elyse Kane, Jamie Russo, Doug Laue, Aniruddh Pandit, Erik Kiewiet de Jonge, Sarah Searls, James Black, Bill Bean, Charlene Eisenberg, Rick Paschal, Jim Lecinski, and Jim Walker. The nuggets of information and insight you shared have been so helpful.

Our colleagues Erv Shames, Scott Neslin, and David Mills read the first few chapters and provided both encouragement and critiques in equal measure, for which we could not be more grateful. Bill Branch and Leandro Guissoni helped us with hard-to-get data for several examples. The very same was true of Walt Salmon, late Professor at the Harvard Business School and world famous retailing expert. His encouragement helped one of us get a research foothold in distribution. Leigh McAlister, John Quelch, Earl Taylor, Elyse Kane, Jan Heide, Robert Spekman, JB Steenkamp, Raj Venkatesan, and Sandy Jap gave us the psychological boost we needed to cross the finish line.

Diksha Gautham, Kesav Vasudevan, Georgios Mexis, Rong Guo, Bob Burnham, Ajay Kumar, and especially Anne Givens, helped with industry background research and the data compilation for several charts. Anne, thank you so much for your patient help through the many iterations of some of the Figures. Jeanne Levine helped us navigate the process of selecting our publisher.

Kirk Kardashian worked tirelessly with us to edit the chapters more than once, asking us questions along the way that helped us make our points clearer and our writing crisper. Kirk, thank you for always meeting the deadlines we imposed, for the fun pictures and news pieces you often sent us, and for your valuable editing.

We owe thanks to our respective schools, the Tuck School at Dartmouth and the Darden School at UVA, for supporting and appreciating our research through the years and for providing the intellectual environment without which we would not have been able to embark on this endeavor. Our students have motivated and shaped this book with their class discussions and projects, and with their questions over the years. A special thanks to the students in Kusum's Multi-Channel Route-to-Market course who served as a test market for early versions of many chapters and were instrumental in making improvements.

It is a lot easier to start a book than it is to finish one. Our spouses, Anand Natrajan and Kate Farris, have not only tolerated us being on Skype and on the phone on evenings, nights, and weekends for longer than we care to admit but have also been our biggest supporters. What would we do without their love and their patience?

The research and writing have been rewarding, and often even fun! In the same way that we enjoy working together and learning from each other, we hope readers of this book will find their time well spent.

We have written this book to provide guidance on how a supplier can manage the multiple distribution channels—physical and digital, independent and company-owned—through which its products reach end consumers today. Multi-channel distribution is sometimes conflated with omni-channel marketing but the two are very different. Omni-channel is primarily a retail concept. It represents efforts by a retailer to integrate its different touchpoints with consumers so that the consumer's overall experience with the retailer is “seamless.” A consumer might want to get advice from a salesperson in the retailer's brick-and-mortar store, order a particular color and size for same- or next-day delivery on the retailer's app, and perhaps exchange or return part of the order back in the store. The retailer, who owns all of these interfaces, tries to coordinate the whole series of transactions and the relationship with the consumer—the same as you would experience if you were conversing with a friend in person, over email, on the phone, or by text. The memories, the relationship, and the flow of topics of conversation all remain uninterrupted. Omni-channel is harder to execute than it appears at the surface, and most retailers are still struggling to perfect it.

Now consider an upstream supplier who sells its product line to and through different types of retailers (even if it also has a direct-to-consumer retail operation). The retailers are independent firms that compete with one another, and the supplier does not have ownership control over them. Can the supplier create a seamless omni-channel experience for consumers across all those retailers? Browsing at one retailer, purchases at another retailer, returns at a third? Most likely not. Should the supplier even make that an objective? The same products, the same services, the same prices everywhere? In some instances, perhaps. In many others, probably not. The supplier's perspective, certainly by necessity and often by choice, is one of multiple channels and multiple channel partners. Of course, the supplier's multi-channel distribution is driven by where, why, and how consumer segments shop, and it requires coordination. But the coordination is focused on the supplier's various independent channels as it strives to optimize market coverage and selling effort while minimizing conflicts among channel partners. Satisfying the requirements of omni-channel resellers needs to be part of a supplier's toolkit, but that is only one of many important considerations in multi-channel distribution.

Consider Brooks Running, a company we will come back to frequently in this book. As a performance running shoe manufacturer, it wants to meet runners where they search and where they buy, so it distributes its full product line through multiple channels, from specialty running stores to omni-channel general sporting goods chains and some pure-play online retailers, and it has its own direct digital channel. Companies like Brooks must develop a set of metrics by which to measure distribution coverage and channel partner efforts and consider whether they should reward some channels for being used as showrooms, even if purchases, especially repeat ones, are made elsewhere. In contrast, many other suppliers don't want to sell the same products at the same prices in all channels, especially online. Burberry decided to sell a few products through Amazon.com in exchange for Amazon's cooperation in weeding out unauthorized sellers but it keeps most of its product line for its own stores and for selected retail partners. In both cases the goals are the same—to reduce channel conflict and preserve the equity of their flagship brands while still having sufficient distribution coverage—even if the approaches are different.

The web and mobile have occupied center stage in most descriptions of how distribution channels are evolving, but this is far from the whole story. Even companies that were “born digital” have discovered that they need to be present in, if not master, traditional distribution channels. Walmart-owned clothing marketer Bonobos not only has its own web and brick-and-mortar “guide shops” but is also using independent retailer Nordstrom. Jessica Alba founded the Honest Company as an e-commerce business (proclaiming that supermarkets are not where consumers should have to shop for diapers, detergents, and the like) but the company is now working hard to get its products on the shelf in the grocery channel. Like brands that are rooted in physical distribution and are now navigating digital channels, these suppliers too must figure out which channels they need to be in and why, how much coverage is right, and how to attain and keep it.

Technology and the prospect of greater profits have encouraged more suppliers who traditionally relied on third-party channels not just to open up but increasingly emphasize the direct-to-consumer route. Nike has clearly stated its goal of accelerating its direct-to-consumer business and becoming “more personal at scale.” Competing with their customers creates the obvious but difficult problem of channel conflict. But, in addition, some suppliers find they need other middlemen to provide special services or must invest in those services themselves, while also having to expand their product line and marketing budgets to attract consumer traffic to the direct channel. Hotel companies like Hilton and Choice Hotels have invested heavily in loyalty programs and advertising campaigns, but they also need meta-search platforms like TripAdvisor to route traffic to Brand.com. Meanwhile, the Marriott-Starwood merger was motivated at least partly by wanting the scale to build up the direct channel. So was AT&T's acquisition of Time Warner. These companies must (a) consider the full set of costs, not just the benefits of going direct, (b) ensure that the consumer still receives all the services she expects along the path-to-purchase and beyond, and (c) figure out the long-term strategic role of their independent and direct channels.

The consequences of many of these multi-channel distribution decisions are hard to foresee. With the plethora of choices available today, it is even more important to select and organize channels in a way that delivers the experience shoppers demand, while generating the volume and margins for everyone in the channel that are needed to sustain the business. Keeping the breadth and depth of distribution in line with the evolving nature and location of demand is not only a question of having a clear strategy, but also one of careful measurement and monitoring. Along with distribution channels, product lines, pricing, and channel incentives also trend toward more complexity. Wishing it could be simpler does not make it so. Instead, we believe that managers must accept the challenge of managing the increasing channel complexity with clear objectives, good frameworks, and the right metrics. Our goal with this book is to help managers, MBA students who will soon step into those roles, and the professors who train them, meet that challenge.

—Kusum L. Ailawadi and Paul W. Farris