5. Channel Performance Assessment
Puma has established strong distribution networks through the multibrand store front and Puma stores which are located in major cities across the world, from which customers can access its products in over 120 countries around the world. Wholesale is the main distribution channel for Puma. Puma is focused on expanding its distribution channels even more by opening more retail outlets throughout the world.
The distribution channels have not achieved the full sales potential as evidenced by the drop of Puma’s currency in 2013. The omnichannel for instance has had some challenges and conflicts that have impacted on the brand’s performance negatively. The first internal conflict is; the conflicting role of Puma’s wholesalers as partners and clients too. Additionally, it is hard striking a balance between sales and marketing. It is even harder to get the wholesale and retail channels working in harmony while balancing the marketing and brand needs, with the complexities that come along with administering multiple channels. Harmonizing the business interests to work together and complement each other is quite a task (Embodee | Virtual Product Experiences for Business 2013).
Secondly, embracing multi- channel synergy has proved to be an uphill task since traditional brands like Puma that have grown as traditional wholesalers are reluctant on adapting to the changes happening in the current retail world (Embodee | Virtual Product Experiences for Business 2013). The rules that were made and worked for the last six or seven decades ago are being broken and cannot be applied anymore since they are being changed within months as the speed of digital world is constantly increasing. The new distribution channels like the rocket internet are effective distribution channels compared to the traditional wholesale distribution.
Thirdly, the information on Puma products is not exclusive and sufficient. The content, regarding photography, digital assets, copy is wanting and needs improvement. The presentation of Puma’s products is not effective. Puma has no control over the presentation of their products in their partners’ stores or marketplaces, based on the presentation of its products on Google Puma Suede. Puma should, therefore, focus on finding a way of showcasing their products in the best lens possible in their stores. The products on online stores are also not well assorted based on features like; product depth, size, color and make of material and customers lack awareness about the products. This has been one of the reasons customers have not utilized the online stores, but this could rectified by addressing the identified issues (Embodee | Virtual Product Experiences for Business 2013).
6. Problems and Prospects
Puma has classified its distribution channels into three categories; wholesale, Puma's owned and operated retail stores and its e-commerce business. The distribution networks serve over 120 countries in the world. The channels cannot be said to have explored the full sales potential as some problems and gaps are existing. Puma has exploited its e-commerce business exclusively. This is because one; inventory management is currently poor due to small-sized stores (Tandon 2015). As a result, cases of customers making orders online and not getting what they ordered have been prevalent, which has led to the loss of potential sales. The problem has further been aggravated by the lack of home delivery services for the online shoppers because it has lost out on customers seeking for convenience. Puma is, however, planning to introduce home deliveries within 24 hours to capture such clients. Puma is also revamping its Omni-channels to integrate mortar-brick stores and online stores. Proper inventory management will be adopted to address the problem of insufficient stock in the stores.
Secondly, Puma's similar products are priced differently in stores and online. The price difference makes customers shy away from the channels that seem expensive or from the whole Puma brand altogether. The issue is, however, being addressed as Puma intends to price its products exclusively in all its channels (Tandon 2015).
The time taken before the products reach the final consumers has not been effective; it can be argued that it takes longer than the necessary time before the final consumers get Puma products. The problem is, however, going to be addressed by the introduction of Puma's Forever Faster channel where faster deliveries videos have been used to imply the improved speed of delivery of Puma merchandise from delivery men to final consumers (Faw 2016). The strategy will present Puma as the fastest moving brand.
Puma has established stores and online stores to distribute products in its countries of operations. However, there is still need for a second trip for countries to pick up the shoes from some of these stores, which may be perceived as an inconvenience to them. Puma is, however, addressing the problem by opening up more and more retail stores to increase its distribution channels.
The gaps identified in Puma's distribution channels can be addressed by first; the information content about Puma products must be exclusive regarding photography, digital assets and copy. Puma should also focus on creating a user-friendly shopping experience for online customers.
There are some prospects for Puma, based on the strategies it is planning to employ. The online and e-commerce channel has not been explored fully, and Puma could start by stocking the online stores and brick and mortar stores sufficiently to capture the e-commerce growing countries like India. The potential of increasing retail outlets is appealing to increase Puma's presence in the existing countries of operation.
List of References
Embodee | Virtual Product Experiences for Business. 2013. PUMA: challenges in an omnichannel world. [Online] Available at: http://www.embodee.com/blog/puma-challenges-in-an-omni-channel-world [Accessed 4 May 2016].
Puma Adds New Channels To Its 'Forever Faster' Campaign. [Online] Mediapost.com. Available at: http://www.mediapost.com/publications/article/232889/puma-adds-new-channels-to-its-forever-faster-cam.html [Accessed 4 May 2016].
Tandon, S. 2015. How Puma is getting an omnichannel makeover. [Online] http://www.livemint.com/. Available at: http://www.livemint.com/Companies/Dk0DiGz5AFyGtFPZOutxuL/How-Puma-is-getting-an-omnichannel-makeover.html [Accessed 4 May 2016].
