What is multichannel retailing?
Multichannel retailing involves a retailer selling across a variety of channels – both online and offline. These can range from shopping cart solutions, to eCommerce marketplaces, and of course brick-and-mortar stores. Doing so allows a retailer to reach out to a wider base of prospective customers and build brand recognition. Studies have shown that retailers that sell on two marketplaces and a shopping cart solution earn 120% more than those who only have a shopping cart solution.
Whether you’re a brick-and-mortar retailer looking to take your business online, or an online merchant looking to expand your online presence, multichannel retailing will give you the chance to increase your sales.
Online shopping cart solutions
WooCommerce, Shopify, Bigcommerce… the options are plenty. If you’re looking to sell online, having one of these is a necessity. With customizable storefronts and secure payment methods, an eCommerce store is the perfect base from which to build your brand and sell internationally.
Amazon is recognized as one of the biggest online retailers in the world, and selling on Amazon Marketplace allows you to reach out to their customer base. Studies have shown that stores selling on Amazon alone enjoy up to 4x more sales than they do on any other channels – shopping cart solution or other marketplaces. However, the homogeneity of Amazon reduces the opportunity for brand building, and that’s where the online shopping cart solutions play a vital role.
Multichannel retailing has the potential for high returns, however, there are some issues:
Selling on multiple channels usually requires you to separate inventory for different channels. This comes with the danger of overstocking due to the fear of going out of stock, resulting in excess inventory that runs the risk of becoming obsolete.
Worse yet, a mismanaged inventory can result in unhappy customers.
Let’s say you are running an Amazon Marketplace store and a Shopify store. You’ve decided to allot more inventory to your Shopify store since it’s your main platform… but your Amazon Marketplace store is enjoying brisk sales to the point where you’ve sold out on that platform. Even though you still have stock on your Shopify store, Amazon Marketplace displays your product as being out of stock, costing you sales and revenue, along with disappointed prospective customers who then look elsewhere.
Running a business is tiring, and the need to manage inventory across a range of platforms can result in occasional missed stock updates – especially if you draw from inventory reserved for one channel to meet demand on another. This then results in overselling and disappointed customers.
On the merchant side...
Aside from the challenge of managing inventory across multiple channels, there is also the need for more time and manpower to manage inventory across different platforms.
In the past, one of the biggest concerns with regards to multichannel sales was the challenge of managing inventory across different channels. Another challenge lies in the increase of time and manpower needed to manage inventory across different platforms.
In the case of the Lims, who run a home furnishing store, the challenge they faced when they considered adopting eCommerce was the need to set aside inventory for an online store and a lack of a means of consolidating all their sales channels. The Lims used to have a staff of eight to help them manage their inventory – and they weren’t even selling online. Now, with a one-stop inventory management solution, they’ve cut their staff to two… and they’re now thinking of selling online again.
With us, all you have to do is update your products on TradeGecko and the information gets pushed to all your eCommerce channels through our Amazon, Shopify, WooCommerce, and Bigcommerce integrations, ensuring your online shops reflect the latest product details, available products, and the exact stock on hand for each item. Once you sell an item on one channel, stock levels across all other channels will be updated immediately. For more information, check out our page on the perks of integrating multiple retail channels with your TradeGecko account.
With this, you can focus on what matters most: growing your business.
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