Multichannel Retailing Strategy — Opportunity And Challenges
Sales are not linear anymore. People hardly step out of their homes, visit brick and mortar stores and purchase their preferred products and services. Everything is now online. Consumers flock to online stores, social media platforms, websites, instant messengers and other avenues to choose, buy and pay for products and services. While this is profitable from a business perspective, it’s not as simple as it sounds.
With more avenues now available for customers, brands have to go an extra mile in ensuring these requirements are met and explore additional ways to reach them. This is because if they don’t, their competitors will. This new shift in consumerism is what businesses refer to as a multi-channel retailing strategy.
In this post, we will explore in detail what multi-channel retailing is, its advantages, challenges, and how to overcome them through effective techniques and best practices.
Let’s get started.
What Is Multi-Channel Retailing?
Offering customers more than one way to reach businesses or products and services is what is simply referred to as multi-channel retailing. Apart from just having a physical store, when brands focus on setting up social media profiles, messenger-based sales funnels, eCommerce stores, websites, and more, it is called multi-channel retailing.
Multi-channel retailing is a fast-growing concept that is keeping brands and businesses on their toes. Statistics reveal that close to 91% of the businesses out there have more than two social media channels.
Not just that, over 51% of the brands use up to 8 different avenues to interact and engage with their potential customers. Consumers, close to 72%, also share that they prefer to connect more with brands that implement a multi-channel retailing strategy.
Like we mentioned, this is not simple as 11% of the businesses agree it’s indeed daunting to maintain and manage an effective multi-channel retailing strategy and only 9% of them manage to interact consistently with their customers across all their channels.
Multi-channel retailing has great potential to increase your traffic and sales when done right. Considering the struggles involved, we felt it was necessary to shed light on this topic. So, to kickstart our understanding of multi-channel retailing, let’s first explore the advantages of this concept.
Advantages Of Multi-channel Retailing
The Power Of The Internet
Multichannel retailers have a significant advantage over their single-channel counterparts in the fact that the latter can be crushed by the competition. Failure to adapt to trending concepts and technologies is making them obsolete by the day. When customers have newer and more convenient ways to shop, they are bound to abandon traditional ways, ultimately leaving single-channel stores out of business.
With that said, multi-channel businesses face stiff competition, too. However, they can never go out of business or face the heat because consumers always have multiple options and avenues to rediscover their business, get captivated and ultimately make a purchase.
From search engines, recommendations on social media channels, referral traffic, LinkedIn posts, a viral Instagram video, or more, customers can stumble upon businesses at any given point in time. It’s the unpredictability that’s the strength here.
Besides, when marketers deploy advanced artificial intelligence-driven modules and recommendation engines, retention rates can be increased exponentially as channels begin to understand the individual requirements of every customer and cater to them accordingly.
Segmented Targeting Through Customer Journey Profiling
For the uninitiated, not all customers are the same. For instance, you and I could be looking to purchase a laptop but your journey and mine could be completely different. While you could be at that point where you’re comparing two different products or brands, I might still be doing research on the type of laptop that would best suit my needs.
With our journeys and preferences being completely different, businesses have to target us in different ways. You should be bombarded with posts and emails that talk about the advantages of choosing a particular brand and I should receive messages and blogs on the type of laptop I need.
Multi-channel retailing lets marketers target specific types of buyers individually through carefully-created content. This concept can let brands and businesses tap into the current mindset of consumers and influence them to make a decision in their favor. Segmentation and personalization are key advantages of multi-channel retailing and through retargeting across diverse channels, convincing a customer shouldn’t be difficult.
What Are The Different Types Of Sales Channels?
The internet is vast and today, marketers have tons of avenues and channels to reach out to their potential customers. To give you a quick overview of the different types of sales channels, here’s a compilation:
- Social media channels like Facebook, Instagram, Snapchat, Twitter, LinkedIn and more
- Your business website and its in-built shopping cart
- Your dedicated online store
- Shopping engines that allow customers to discover brands, compare products, pricing, and more
- Online marketplaces like Amazon, Walmart, and more
- Search engines
- Dedicated applications and more
How Profitable Is Multi-Channel Retailing?
With more than one way to push sales, multi-channel retailing is indeed a profitable strategy. To back this up with numbers, understand that customers interacting with a multi-channel business -
- Spent 15–35% more in terms of transactions
- Were 10% more loyal to the brands
- And experienced up to 30% higher value when compared to single-channel businesses
The Challenges Involved In Implementing A multi-channel retailing strategy
Targeting The Wrong Sales Channel
Not all sales channels can yield profitable results to businesses. Targeting wrong channels or selling on irrelevant channels can cause ironical consequences, where you incur loss instead of making profits. Selling lemonade on Amazon doesn’t make sense whatsoever and this is exactly what your business should avoid.
Extensive Digital Infrastructure Needed
Multi-channel retailing demands the setup and maintenance of extensive digital infrastructure. This could be a limitation for businesses that are bootstrapped or awaiting funding. From setting up multiple touchpoints and social channels to deploying automation tools and ensuring websites and eCommerce stores are consistently up, there are plenty of infrastructural challenges.
Consistent Product Information Management
Product information should be updated and maintained on every single channel you intend to set up. You should also realize that the format and requirements of each channel would be different in terms of character limitations, image pixel ratios and other technical mandates. From a customer perspective, your products should convey the same information across all channels.
Omni-channel Branding, Messaging and Experience
Extending the previous point, customers don’t know about multi-channel retailing and other concepts. They don’t have to. For them, what matters is the option to check out products and if possible purchase them from any platform and medium. They don’t mind if they make a purchase on Instagram, your eCommerce store or your website. All they need is to complete a transaction and get their product.
This subconsciously dictates a unanimous interaction and experience for customers. The messaging and branding you convey and implement on, say, LinkedIn should be similar to what you put up on your website. Consistency is key and even a minor disconnect could bring in suspicion in the minds of your visitors about the legitimacy of your brand.
Shipping And Order Fulfillment
Order fulfillment and shipping is what everything boils down to. This is the affirmation of the fact that a sale has happened. Now, all you have to do is live up to your promises through seamless order fulfillment. However, that’s where the challenge is. With your channels spread out across different mediums, the way you collect shipping information and other details vary. It’s also difficult to compile them to a single terminal entity to trigger automation sequences like invoice generation, order tracking modules, and more. Managing returns is another struggle as well.
How To Overcome The Challenges Involved In Multi-Channel Retailing
While the challenges seemed daunting, there are easy fixes that you can implement to have a profitable multi-channel retailing strategy. Let’s check out what they are.
- Use a product information management system to ensure consistency of all the details associated with your products across diverse channels. This includes product information, technical specs, pricing, and more. This lets you make changes on one dashboard and reflect the changes across the entire ecosystem.
- Deploy the most relevant tech to manage all your challenges. For instance, you could bring in inventory management software to streamline the procurement, sales, and distribution of your products. You could manage your supply chain, in-store inventory and fulfill orders seamlessly through an effective information management application. Also, deploy recommendation engines and advanced analytics modules.
- Every customer has one specific buying pattern and your multi-channel strategy could tap into that aspect and push sales. Through an order management system, you could understand what avenue an individual customer uses to purchase your product and engage with them more effectively.
- Implement a solid customer journey plan for your business based on your market segment and niche. Work on dedicating a specific type of content to every stage of a customer’s journey to ensure maximum traction, engagement, or conversion. This involves extensive study of consumer behavior and interaction on multiple platforms. When you prioritize customer journey over channel experience, you automatically come up with the best ways to interact with a customer regardless of the channel.
So, this is everything you need to know about multi-channel retailing. If you’re getting started, it’s natural to face a few hiccups. As you keep getting hands-on with multiple channels, you would find out ways to optimize your processes and workflows. To quickly overcome your challenges, have adequate tools and management systems in place as well.
We are sure you would be able to soon offer an omnichannel experience to your customers and generate revenue on autopilot.