If you work in the world of ecommerce, you’ve no doubt encountered “multichannel retailing.” But what does this term really refer to, and how does it apply to your business?
As elemental as it may sound, this is a question every online retailer and brand should be considering. The trend has changed a lot in recent years — and the implications for your business are significant.
What is multichannel retailing — and how has it changed?
The term “multichannel retailing” is often defined as the practice of making products available to consumers on more than one sales channel. It’s most commonly used to describe the process of expanding beyond an ecommerce website or brick-and-mortar stores to sell on a marketplace, comparison shopping engine, social media platform, or another online channel.
However, this standard definition has evolved a lot in recent years. As the ecommerce industry grows at a rapid pace, so do the options for selling online.
These days, “multi” would be more aptly described as “myriad.”
To put it in perspective, consider the massive growth of ecommerce marketplaces. A few years ago, the typical seller interested in multichannel retailing would start by listing products on Amazon. The company might dabble in some email marketing or paid search ads and perhaps venture over to eBay. But today? That same seller would need to choose from more than 100 marketplaces, dozens of essential advertising options and numerous types of fulfillment.
Similar scenarios have played out across shopping engines, mobile apps and even social media — all of which have expanded to accommodate consumers’ desires to browse and buy at any time from any device, regardless of what else they may be doing.
Today’s shoppers expect to get exactly what they want, the moment they want it.
This means multichannel retailing is no longer a matter of simply making merchandise available for purchase on more than one sales channel. To be successful in 2019, ecommerce companies will need to embrace a much broader scope of marketing, selling, and fulfilling activities across multiple platforms.
For the retailer, this process might involve looking past local inventory ads to embrace Amazon Advertising and Google Shopping. For the manufacturer, it could mean branching out beyond first-party selling on Amazon to open third-party seller accounts on eBay, Walmart, and other key marketplaces.
There are dozens of different ways multichannel retailing can play out, but the implications are always the same. Meeting today’s empowered consumers on their ever-evolving paths to purchase means putting products in more places of prominence. It means choosing the mediums and methods that most meet their needs and offering depth and breadth to the channels you choose.
In other words: The more channels you learn to leverage, the higher your chances of landing loyalty and sales.
And the more channels you pursue, the more challenges there are to prepare for.
3 common challenges in modern multichannel retailing
From ecommerce marketplaces and social media advertising to comparison shopping engines and brick-and-mortar stores, there’s a lot to consider. The main thing to remember is this:
Your consumers are everywhere. Which means you should be, too.
It’s easier said than done, of course — especially when you factor in the sheer magnitude of “everywhere” within the context of multichannel retailing. More than 80% of consumers today check different retail channels on their smartphones before making in-store purchases, and 88% conduct research online before making a decision on where, when, and how they’ll buy.
This tendency to compare prices, delivery options and more is blurring the line between multichannel (leveraging the right channels to ensure consumers are drawn to your products) and omnichannel (ensuring a fluid experience across channels).
Before you can begin to accurately identify your ideal mix of channels and how best to leverage them for a seamless experience, it’s important to prepare for the biggest challenges in each of the three key areas:
The options for ecommerce advertising have grown significantly in recent years. Finding ways to expand your reach without overextending your budget is now crucial to success.
Each sales channel has its own set of listing requirements and data feed specifications, and these requirements change constantly. This makes it difficult to optimize and streamline the flow of customer and product data across numerous channels.
Now that sellers are competing in the era of same-day shipping, success in multichannel retailing means mastering the best fulfillment option for each and every order. This can be especially challenging for the seller that’s long relied on a single carrier strategy.
When you address these three core areas first and build a multichannel retailing strategy around them, it becomes a lot easier to identify the right mix of channels and meet consumers at various stages in the path to purchase.
9 essential retailing channels and choices to consider
Based on our experiences with more than 2,800 sellers and $8.9 billion GMV, ChannelAdvisor’s ecommerce experts have identified several core channels that should be on every brand and retailer’s radar in 2019 and beyond.
For multichannel marketing that gets your products in front of the right consumers at the right time, sellers should get comfortable with:
1. Marketplace advertising
Remember: Consumers don’t want to scroll through hundreds of listings. They want to find a product or promotion quickly. If you really want to boost your visibility through multichannel retailing, marketplace advertising is a must. Key channels in this area are Amazon Advertising and eBay Promoted Listings.
2. Social media advertising
Today’s consumers use social media to actively seek out product information. Seventy-six percent purchase products they discover on social media, either through social commerce transactions or by clicking through to another sales channel. Most of this activity occurs on Facebook and Instagram, as well as Pinterest Rich Pins and other social commerce channels.
3. Comparison shopping engines
When planning or expanding a multichannel strategy, it’s important to leverage the power of search. With search increasingly used for ideas and inspiration, comparison shopping engines like Google and Bing Shopping have become particularly important.
Pro tip: When you’re ready to move beyond the basics outlined above, the next step is to explore Google Shopping Actions.
When determining which sales channels hold the most potential for your products, be sure to explore:
4. Ecommerce marketplaces
At the top of the list are Amazon, eBay, Google, and Walmart. These marketplaces lay the foundation for success in multichannel retailing. Once you have a strong presence on these key channels, consider your options for reaching wider audiences and targeting niche buyers.
5. Your mobile-friendly website
Now that we’re living in a mobile-first world, 45% of users say their mobile devices are quickly becoming the most important shopping tool. Yet the mobile experience is still incredibly lacking for many retailers and brands. As mission control for any multichannel retailing strategy, your website should be fully optimized for mobile users.
6. Brick-and-mortar locations
While consumers do most product research online, many still prefer to make in-store purchases. Even in digital-dominant categories such as consumer electronics, 50% of shoppers say they prefer brick-and-mortar stores as a primary sales channel.
Pro tip: For a truly seamless path to purchase across your online sales channels, retail partners and brick-and-mortar locations, use Where to Buy widgets.
When optimizing fulfillment to compete in the multichannel era of same-day shipping, consider different delivery methods:
7. Diversified carriers
Many sellers rely on one carrier or fulfillment option for simplicity and ease. But as demand for fast, free shipping continues to skyrocket, it’s critical to have access to competitive pricing. If you choose to fulfill orders in-house, using a full suite of shipping options can ensure you always have access to the fastest, most affordable delivery method for each multichannel order.
8. Third-party logistics
If you struggle to maintain control over inventory, orders and shipments across multiple retail channels, consider working with a third-party logistics partner that can provide tools and infrastructure to automate order fulfillment
9. Additional partnerships
As you expand to new channels, it’s important to continually consider all available fulfillment options. Take time to understand the difference between Fulfillment by Amazon and Seller Fulfilled Prime, carefully vet options for dropshipping, and stay connected to your distribution network as it grows.
New channels bring new challenges
Lastly, as you assess options across marketing, selling and fulfilling, keep the following tips in mind:
1. Choosing the right (or wrong) channels
While it can be tempting to expand to every channel, true success comes when you identify the ones most likely to resonate with your target consumers.
2. Understanding additional costs
From advertising budgets to listing fees to shipping costs, each expansion will come with its own set of expenses. Plan accordingly to maximize your profit margins.
3. Staying on top of logistics
Your product performance and customer data offer a treasure trove of insights that can be used when selecting your ideal mix of channels. Use a robust ecommerce platform to get the most important insights at a glance.
Understanding the new realm of multichannel retailing is one of the most important steps for sellers to take in 2019 and beyond. With an explosion of channels in recent years, it’s more important than ever to identify which ones hold the most promise for your products. Expanding too far, too fast can result in choosing channels that are a poor fit for your consumers and unprofitable for you. But take time to carefully vet your options, and multichannel retailing can yield tremendous revenue rewards.