Consumer buying habits have changed. With the rise of the “connected consumer,” products can be researched and purchased almost anywhere in the world on any device. Given this evolution, vendors have more opportunities than ever to get in front of customers and grow their brands. One of the most obvious ways to grow a business is to sell on more than one channel, also known as multichannel retailing.
What is multichannel retail?
Multichannel retailing is an ecommerce strategy that allows vendors to sell their products through numerous channels — online stores, brick-and-mortar stores, marketplaces, retailers, distributors, social apps and more. By developing a multichannel model that is supported by a cohesive brand strategy, companies can increase brand awareness and drive brand loyalty across all shopping channels used.
Supplement your bread and butter sales channels
If you have a successful online store (running on Shopify, for example), or if you have great sales on Amazon, you may not be motivated to sell to other channels — for now. But what would happen to your business if an unforeseen issue were to interrupt your bread and butter sales channels? Or if your competition were to start selling on a new channel taking a portion of your revenue? Would your sales suffer?
Like any good stock portfolio, vendors can benefit by diversifying. In this industry, that equates to going multichannel. By enabling more sales options, vendors can protect themselves in case of a disruption, a plateaued growth or when competitors start expanding their sales channels. As the old adage goes, don’t put all your eggs in one basket. Similarly, don’t run all your sales through one channel.
Interested in multichannel retail, but don't know how to get started?
Having a good multichannel strategy is important, but there are many things you need to take into consideration prior to taking action.
- Choose the right retailers for your products
- There are big box retailers and online marketplaces (Target, Walmart, Amazon, etc.) that will sell virtually any type of product, but general marketplaces like these are more the exception than the rule. Many channels are more curated and targeted at a more narrow vertical, such as Toys R Us or Dick’s Sporting Goods, which could help drive sales better than simply selling through a big box retailer. Know your products, your customers and the channels target audience to determine which channels you should be selling on.
- Don't stretch yourself too thin
- Multichannel strategies seem easy — the more channels you engage, the easier your product will be to find…right?. Unfortunately, it’s not that simple. More channels can cause more headaches if you’re not prepared to support them and can be costly without the right infrastructure. Ensuring that you have enough resources such as people and warehousing space, whether in-house or outsourced, is critical to supporting sales channels. Choosing the best sales channels for your company and supporting them with sufficient resources will deliver more positive results than launching a bunch of channels with limited resources. For example, it’s smart to confirm that your warehouse and fulfillment provider can scale to accommodate higher order volumes, and to inform them if you predict any big changes. Not all fulfillment providers are created equally. If you want to expand globally and your fulfillment provider isn’t built for it, you should spend your time looking for a new fulfillment provider before you pull the trigger on anything else.
- Develop a marketing/sales strategy
- Once you identify ideal sales channels, you need to develop relationships with those sellers. Retail buyers and merchandisers often have trouble deciding which SKUs to carry, and vendors can influence them by proposing a strategy for marketing a product to that vendor’s customers. If you can show a buyer that you have credible sales and projected growth numbers or that your product is featured in a viral video on YouTube, buyers will become more confident in your your product, making it easier to gain their favor. Your work doesn’t stop there, though. Keep putting in the work to build relationships.
- Have the right third-party supply chain solutions
- Using third-party solutions to support your operational needs can do a lot for your business. Multichannel sales are most successful when every part of your supply chain is in sync. After all the work it takes to get your products on the right channels, you don’t want to run into connectivity or system issues between your sales channels and your fulfillment partner. If you want to expand globally or anticipate a high growth volume period and your operation can’t scale, your sales channels may suffer. It’s important to vet your logistics solution provider thoroughly and make sure they can support your current needs and future ambitions.
If you are interested in selling multichannel or are dissatisfied with the multichannel fulfillment capabilities of your current provider, give us a call. To learn more, check out our case study with Little Unicorn, which highlights some of the benefits we offer to multichannel vendors like you.