Consumers are shopping in more locations than ever. 56% are likely to shop at a retailer that offers a “start anywhere, finish anywhere” cart experience. Shouldn’t your products be present where consumers are? If so, consider a multichannel distribution system.
What is a multichannel distribution system?
Multichannel distribution system is a method or structure in which a single company sets up two or more sales and marketing channels to reach one or more customer segments—through a brick and mortar store, an online marketplace like Amazon or eBay, a large retailer, wholesale, direct marketing or resellers.
Think about Starbucks, which started with a physical store in Seattle. Over the years, they’ve sold their products across 29,000 stores and groceries worldwide. And up until 2017, Starbucks coffee was available for purchase through a subscription or their website.
Or imagine a manufacturer like Goodyear, which develops, manufactures, markets and distributes tires (and rubber-related materials) for various applications. It sends products to their supplier partners, auto service centers, and retailers like Walmart and Sears.
Nowadays, consumers have a lot of places to shop from—both online and offline—using up to 12 channels and devices.
A shopper like Marcus, for example, starts his search on Amazon then moves on to Google, prioritizing convenience and location. He visits coupon sites in search of a good deal, then back to Google for a promo code before making a purchase.
Channel loyalty has disintegrated over the last few years; it’s a thing of the past.
Related blog: What is multichannel retailing?
Consumers expect products to be available in more than one place, making investing in a multichannel strategy worthwhile. Merchants can experience benefits, including:
Greater control over your brand’s future: Wouldn’t it be nice not to fear Amazon’s changing algorithm or pay-out structure? With a multichannel strategy, you’re not reliant on a single platform. You’re free to optimize your supply chain on your terms, get creative with your marketing, and have complete access to your customer base. How to build a good pre-order strategy
As with anything in business, there are drawbacks to multichannel selling. Although this strategy can increase your sales and brand exposure, be prepared to face:
Don’t let the fear of complexity stop you from expanding your business. Here are three best practices on how to setup the optimal multichannel distribution system:
With each new channel you enter, there’s a risk of the increasing complexity of your systems, and a higher risk of compromised data integrity due to duplicate records or inconsistent data entry. Employees could be entering bits and pieces of information in multiple systems.
For example, a VIP vendor of yours may have two different email addresses in your ordering (Shopify) and accounting (Xero) platforms. How do you know which value is correct? How does one system supersede the other?
To effectively manage a multichannel distribution system, agree on a cohesive underlying data. So instead of asking, “which value is more correct,” consider changing your mindset to ask, “how can we unify our data just to have one value?”
Frictionless sales relationships are made possible by quick responses and access to rich information–from sizes, color variety, high-res images, stock levels, etc. Automation is the easiest, least resource intensive way to make this more possible. Automation can be utilized across many facets of the supply chain, including:
In a digital age, businesses need to optimize their workflows to maintain a competitive edge. Supply chain automation enables you to do that. Investment in the right tools, processes (i.e., APIs), and resources can also significantly cut down on operational costs in the long run. Such investment doesn’t require a massive investment in a legacy ERP software or a small army of IT staff to implement it.
To manage the data coming in from all of these outlets, native integrations, APIs, and suppliers, you’ll need a single source of truth or a “golden record.”
QuickBooks Commerce could be your ally in future-proofing your business. Our software can help you anticipate issues, course-correct, get ahead of trends, and make smart decisions. A single, integrated platform will improve your revenue and speed to market, and reduce operating costs.
Whether you sell through multiple physical locations, your own website, or one or more global marketplaces, QuickBooks Commerce aims to make the experience of managing a multichannel and multi-location commerce company as simple and painless as possible. QuickBooks Commerce is a powerful tool that will also help your business use data analytics in predictive and prescriptive ways.
Start your FREE trial today.
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