Mobile apps are all the rage in 2024. If you don’t have one, your brand is already behind.
However, when I have this conversation with brands, a lot of them are really concerned about cannibalizing their website sales, meaning their new app will, in essence, divert existing customers instead of attracting new ones. You can’t scale a D2C brand by only focusing on retention, so that’s a valid concern.
Channel cannibalization is a tricky subject but I’ll do my best to hit on the most important parts.
In this short post, we’ll dive into channel cannibalization, discuss its role in growing a brand, and understand why successful companies are undeterred by this concern.
What is Channel Cannibalization?
First, for those who are unfamiliar with the term, let’s define channel cannibalization.
Channel cannibalization occurs when a company’s various sales and communication channels compete for the same customer purchases. The fear is that a new sales channel, like a mobile app or even starting to sell on Amazon, might shift existing customers to a different platform without bringing in new revenue streams.
However, when executed correctly, a mobile app will bring customers closer to the brand, improve overall engagement, and increase their lifetime value. I see this every time one of our clients launch an app.
As I talked about on a podcast recently, almost 70% of US shoppers prefer to shop on their smartphones. For the most part, mobile websites can be difficult to navigate, which paves the way for a mobile app to bridge the gap and become a powerful channel for engagement.
What Are The Benefits of Channel Diversification
In marketing, channel diversification involves strategically utilizing multiple platforms to connect with your customers. Modern e-commerce brands often employ a combination of a website, email, SMS, direct mail, social media, Google & Meta ads, pop up shops / in-person events, and increasingly, a mobile app.
When leveraged effectively, channel diversification creates a seamless and integrated approach to customer engagement. This consistent experience can be tailored to deploy the right marketing strategies on the right platforms at the right times. Again, this comes back to your customer’s unique buyer journey. You need to know how they make purchase decisions and build a strategy that dovetails right into that journey.
How Do You Overcome Channel Cannibalization Concerns
It’s hard to not think about and be concerned with channel cannibalization.
The key to overcoming these concerns lies in understanding your customers, building a platform and/or community that resonates with them, and getting them engaged with you, your content, and your brand.
Smart brands that scale are don’t view the sales and marketing channels in isolation. They look at each channel and determine how they can work together seamlessly. They build a budget based on percentage of sales and they execute. If your marketing is increasing your sales, adding an app tailored to your customers’ needs is the very next stage in your evolution.
To wrap up, making informed decisions about integrating a mobile app into your business, aligned with customer preferences, can lead to increased engagement and higher sales.
Instead of fearing channel cannibalization, focus on creating brand ecosystem where each channel adds value to your customers and contributes to the overall success of your business.
If you don’t know where to start, we highly recommend TapCart. They are one of our trusted e-commerce technology partners and can get you live incredibly fast.
Greg is a digital marketing strategist, ecommerce owner, e-commerce marketing agency owner, and recognized leader in the D2C industry.
With 18 years of experience working with small, medium, and large organizations, Greg knows how to build and execute marketing strategies that drive growth.
