Introducing multichannel into your eCommerce business model means expanding beyond the singular path to purchase, through which most online retailers still operate.
Beyond selling items on multiple sites, multichannel retailing unleashes native checkout options across the various touchpoints consumers now live within. A successful definition of multichannel also involves the expansion of a company’s approach to marketing.
The ultimate goal: create a multichannel funnel, letting customers purchase directly from all the available platforms they already use.
As a simple example, a brick-and-mortar retail store may decide to send out mail-order catalogs to its loyal customers to drive eCommerce sales or phone orders. Alternatively, if an eCommerce merchant decides to list items on multiple marketplaces (such as Amazon) or on social platforms (namely, Instagram and Facebook), this would be another example of multichannel retail.
Brands that advertise and sell on different social networks, search engines, or online directories are all using multichannel marketing to some degree.
Finally, multichannel operations also refer to the shifts that must be made internally as the company begins evolving its approach to marketing and sales. Here, multichannel is all about ensuring essential data and information is updated in real-time and stored in a centralized location that can be accessed by all necessary team members.
Still, as we’ll discuss throughout this article…
By definition, multichannel isn’t just about being present on multiple channels: it’s about creating a cohesive customer experience.
Multichannel retailing involves taking in, processing, and fulfilling orders from a variety of channels.
In contrast to the “traditional” way of selling (e.g., marketing on various platforms while funneling customers into one location, multichannel selling allows you to actually conduct business on those platforms.
By today’s standards, businesses have a variety of sales channels to choose from—from their own storefront and website to third-party platforms such as Amazon and niche marketplaces — even certain social media channels.
By selling on multiple platforms, you allow your target audience to purchase from your company in a way that’s most convenient and comfortable for them. Because they can make a purchase without having to navigate away from the platform they were already on, they’ll be much more likely to move forward with their decision.
Boiled down to a single word, the central benefit of going multichannel is growth.
More specifically, a successful shift to multichannel sales can lead to increases in:
Regarding sales numbers, this just makes sense: the more channels you use to promote your brand and your products, the more potential customers you’ll reach. From a simple “wide-net” perspective, selling on more than one channel will allow you to reach individuals you might never have been able to engage with otherwise.
Multichannel buyers account for 73% of all online consumers today — and they also spend more than their single-channel counterparts. Harvard Business Review found that multichannel shoppers spend an average of 4% more on every shopping occasion in the store and 10% more online than single-channel customers.
Creating a clearly defined multichannel strategy will inherently attract consumers who are more likely to do more business with your brand on a more frequent basis.
Moreover, adopting a multichannel approach also allows you to deepen your relationship with your target audience members altogether.
Since you can use each different channel to provide unique experiences and value to your customers, they’ll become more engaged with your brand as they use each channel throughout their journey.
As consumers increasingly use new channels and technology to find, access, purchase and explore new products, it becomes necessary to accommodate these new behaviors by evolving your overall multichannel strategy.
If you can provide for your customers’ needs regardless of the channel they decide to use at a given period in time, they’ll have no reason to look beyond your company when they’re in need of your services.
As with anything in business, there are drawbacks to multichannel selling. Although this strategy can increase your sales and brand exposure, anticipate common mistakes:
More products in more places mean more suppliers, more geographically dispersed warehouses, more staff needed to fulfill orders, and additional shipping costs.
Cannibalization is a term used to refer to sales loss caused by a company’s introduction of a new product or sales channel that displaces its own older products (or pre-existing channels) rather than increasing the company’s overall market share.
Adding a new channel to your processes means ensuring your processes are optimized specifically for that channel.
This means managing inventory, fulfilling orders, and guaranteeing delivery times — often through various third-party logistics partners (3PL) — for each channel. Furthermore it means managing customer relationships and streamlining customer experiences throughout each channel your audience uses.
The issue of complexity is sometimes misunderstood by organizations as they dive into a multichannel initiative. It’s not enough to simply throw more money or resources at these new initiatives and simply operate as “business as usual.”
Rather, the organization needs to evolve their overall processes in innovative ways that allow them to provide more value to their customers. This requires …
No definition of multichannel would be complete without discussing the importance of adopting a single source of truth (SSoT) and an attribution model to measure performance.
According to data-management expert Lionel Grealou, SSoT is…
The practice of structuring information models and associated schemata, such that every data element is stored exactly once. From a business perspective, at an organisational level, it means that data is only created at source, in the relevant master system, following a specific process or set of processes.
“SSoT enables greater data transparency, relevant storage system, traceability, clear ownership, cost effective re-use, etc.”
That may sound daunting, so let’s simplify it:
Single source of truth (SSoT) creates a unified view of all your data, both from sales channels as well as suppliers.
eCommerce businesses store data in one of two ways: via the cloud or on-premise. The latter is how traditional businesses have been running for years, but this is now incompatible with an SSoT approach. Worse, it’s time-consuming and inefficient.
A cloud-based approach that aggregates data from native integrations, various checkouts, and multiple APIs is essential for eCommerce businesses running multichannel sales.
Cloud-based storage allows for instant global updates, providing every business partner and stakeholder with up-to-the-second information from the SSoT. The cloud also allows for unlimited scalability as you bring on new suppliers and sales channels.
Why? Because in an organization that uses a cloud-based SSoT, when one record is changed, it will be changed everywhere. In turn, your team will have the most accurate, up-to-date data and information on hand when making critical business decisions.
Since your various teams will have access to a vast collection of data on each of your customers, this will allow them to provide exactly what an individual customer is expecting at any given time.
Among the many other abilities having a SSOT unlocks for your team, doing so will allow you to:
Multichannel attribution models allow multichannel organizations to keep track of the effectiveness of each channel they use.
Multichannel attribution involves analyzing audience engagement across channels and assessing how a specific touchpoint affects (1) the customer’s experience and (2) your company’s bottom line.
In doing so, teams can determine which channels their customers are most likely to use — and which they tend to avoid. Going a step further, this information uncovers new marketing opportunities that previously may not have been obvious.
There are a number of multichannel attribution models that can provide further insight into your audience’s needs and expectations along their path to purchase, including:
Each of these models is based on a different set of rules, but will ultimately provide a clearer idea of where your multichannel marketing strengths and weaknesses lie.
With data in hand, you can then become laser-focused on making immediate improvements in the areas that matter most.
Start making multichannel sales and supply chain modernization a reality for your business in order to create a competitive advantage.