Nowadays your business must stand out, as there are many ways available for customers to shop. Sticking to the old traditional way is not just enough now. Multi-Channel Retailing could be the first step to transform your business.
Multi-Channel Retailing – Definition
Multi-channel retailing is the process of using multiple channels for selling similar products on different platforms. Platforms may be online or offline. It is the approach of businesses reaching customers according to the choice of the convenience of customers. Final purchasing may be from any of the channels. Providing various channels helps to facilitate buying decision process in multiple ways.
For example, Apple uses a multi-channel strategy. It consists of offline stores, online sales channels, and third-party channels like Amazon. Customers can pick any one of these sales channels to purchase an Apple product. Some customers like to research apple’s official website, use the website to locate a store nearest to them, and then finally purchase a product from one retail store.
Types of Sales Channel
- Social Media Channels
Influencers share their experiences on social media. It drives traffic; social media is an excellent way for people to discover new products.
A web store is essential to channel for all retailers because it leads you to personalize the shopping experience.
- Comparison Shopping Engines
Price and benefits from the product are the most influential factors in purchasing decisions. It gives fast pricing information to shoppers.
It is best for buyers, and they can decide for purchase as they have a brand or a product already in mind.
Benefits of Multi-Channel Retailing
- Better Revenue
If you have spent a lot of money on advertising and marketing to make brand awareness, but your customers have only one way of buying your product, it does not increase your revenue. By spreading your business across various platforms, you can get more attention from customers. It will give time to customers to browse your store, compare prices, do their research which is essential for them to make a purchase decision. Improved revenue is the most prominent advantage of Multi-Channel Retailing.
- Collect Valuable Data
Multi-Channel Retailing allows you to collect a lot more data on customer purchases compared to a single channel. After doing this, you can understand which sales channel your customers seem to prefer the most. With only a single sales channel, you would not be able to compare your sales with other channels since you are stuck with the one you have. Comparing several channels gives you a broader perspective. When you start using several channels, you see that you are selling 10X volume of goods on one channel, whereas, on another channel, you are selling only X volume of goods. You learn which channel is best for you and which channel is best for which product.
Challenges of multi challenge retailing
- Difficult to co-ordinate inventory across various channels
The biggest challenge for multi-channel retailing is managing inventory across all the different sales channels. It is because its channel is independent of others. So change in one channel is not going to reflect in the other unless it is done manually.
For example, suppose a multi-channel retailer has three different channels. They are a physical store, eCommerce platform, and third-party marketplace like Amazon. If there on out of stock for a specific product, they immediately mark it as out of stock in their eCommerce platform. But forgot to mark it as out of stock in their third-party marketplace like Amazon. Now, if the customer places an order for that specific product in their third-party marketplace, then the retailer will either have to turn the customer away or keep him waiting. Both of which are embarrassing and not good for business.
- Investment is costly
Multi-channel retailing is costly when you plan to set up a lot of channels. Because each channel requires another round of expenses, like a setup cost, customization, hiring employees to manage it. Marketing and advertisement add more expense again.