The value delivery system Choose the Value Provide Communicate Capture Customer insight Capability assessment Co-create solutions to buying problems Use value-adding partners Proclaim the value proposition Develop a shared vision Understand the cost-to-serve What is the channel margin and who receives it? Source: Lanning, M.J. and Michaels, E. G., ‘A business is a value delivery system’, McKinsey & Co., Inc., June 1998

Key issues for channel strategy Effectiveness How well do our channels cover the market? How well do our channels meet out customers’ needs? Are our channels building a competitive advantage for us? Efficiency Do we understand the true cost-to-serve of our different channels? Are we surrendering too much channel margin? Have we explored all the opportunities for cross-channel synergies? CHANNEL STRATEGY Environment How are customers’ expectations changing? What new opportunities for value creation are emerging? Where might we be vulnerable to future channel disruptions?

From single channel to omni-channel D.C. STORE Multi channel D.C. HOME D.C. STORE Omni Channel HOME D.C. STORE D.C. = Distribution Centre CLICK & COLLECT