Multichannel Retail — Benefits, Challenges, Examples
The internet has changed the way we go about our lives including buying and selling. For buyers, it provides them an expansive list of options to opt from. Modern buyers engage in product research and consultation online.
This is evident in the fact that 82% of consumers research products online before making a purchase in-store. This suggests that Customers are keen to make conscious buying decisions.
Essentially, businesses must find ways to stay in front of customers’ faces and reach them wherever they are. Contemporary businesses must acquiesce to the modern customers’ needs or concede defeat to competitors. Note that this is different from the omnichannel approach.
What is multichannel retail?
Multichannel retail is a means by which businesses reach their target customers through different distribution channels. This is as opposed to single-channel retail where you use one channel to sell to customers.
With multichannel marketing, you can reach customers you would have missed using a single channel. You get the opportunity to persuade customers through different avenues when you use a multichannel approach.
Types of multi-channel
Brick and Mortar
It refers to a physical store with a physical address. These are the traditional retail locations operated by businesses where you interact face-to-face and in-person with customers. They usually serve as the main distribution channel for the business organisation, while online stores assist.
Ecommerce ( direct to customer)
Businesses sell directly to customers via a website or an app. In this case, customers can visit a business website to purchase a product. The other alternative is to develop a branded app that helps customers buy in-app. For example, you can only book a Bolt ride only if you download their app.
Social media
Social media used to be a place to drive traffic to your online store. Ecommerce businesses used it to advertise their products. Today, social media accommodates in-app purchases. Social commerce and conversational commerce have become major features of social media. Shoppable pictures and videos allow you to make direct purchases. Some of these social media platforms have to check out features that enable customers to pay directly without leaving the app.
Phone orders
Consumers can make a call from the comfort of their homes or offices that puts them through businesses’ brick and mortar stores. Especially if customers experience a system or network glitch when they try to make an order. They resort to making phone calls to hold items for pickup at a later time or get them delivered to them.
Online marketplaces
Online marketplaces are 3rd-party vendors. They make available to consumers a centralized buying experience by providing a wide selection of products and services to them. SpottR is an example of an online marketplace. It helps businesses to quickly get found by customers close to them. It does that using the google map.
Catalogues/mail order
This isn’t common practice in this part of the world. The advent of the internet has made this method less popular in places where it used to be popular. Just a few businesses still use this method.it was an effective way to reach people in rural and urban areas. Consumers would look through a list of products and their descriptions alongside a catalogue. Afterward, they mail back their payment and product selection.
Challenges of multichannel retail
Pricing
Product pricing may differ among sales channels. It could be due to several reasons like the extra running cost of using a particular sales channel. Customers may begin to prefer that single channel that provides a relatively low offer. Ultimately resulting in a smaller net profit margin.
Logistics
When you adopt a multichannel approach, you should expect that your business will grow significantly. It behoves you to handle logistics adequately. You need to have centralised control over all the fragments of logistics. Adopting inventory tools can help you stay organised. Inventorising product availability and purchase at brick and mortar stores and third-party retailers is highly necessary.
Data Monitoring/ social listening
Actively Monitoring data is a lot of work but essential for a multichannel retail approach. You need to track sales and ensure that your most bought products stay in stock. Unpopular products can then be reduced or removed. You also need to be an active listener.
Listen to your customers and competitors to see what you should adopt or shouldn’t into your business model. All of these can be really challenging to keep up with if you are new to online selling channels. Adopting analytic and social listening tools can ease out some of the difficulty you may face.
Advantages of multichannel
Customer engagement
The multichannel approach helps you engage customers. Customers can find you by their convenience to research your product or buy from you.
Brand affinity
When customers see you on different channels, they become aware of your brand. Gradually, they begin to connect with your brand.
Good for expansion and profitability
Through multichannel retail, you can reach more people. This implies that more people buy from you leading to increased profitability.
Customer flexibility
Multichannel retail provides the flexibility and convenience that traditional retail doesn’t. Customers do not always need to come down to your store to buy or make an inquiry.
Customer data
Third-party online marketplaces help you with the data of consumers. Sellers get detailed reports and data feeds to help them evaluate customer behaviour off their websites.
Social proof
This helps buyers learn from the experience of other buyers. Positive reviews and testimonials help to recommend your products to people. It can increase sales both offline and online. Customers who come online to research a product can visit your physical store to make a purchase. Online and social platforms allow you to get reviews and display reviews from happy customers.
Now that you have an idea of what multi-channel marketing is all about, let’s explore some brands that are doing well at it.
Examples of Multi-channel
Chicken Republic and Domino Pizza are amongst the leading brands in the retail food industry running a multi-channel method of selling.
They have a website where you can make a direct purchase and can be found on third-party online marketplaces like Jumiafood. In addition, you can reach any of their brick-and-mortar stores closest to you via a phone call.
They both have social media pages optimised to receive call orders or make inquiries. All these channels are put in place to fully maximise the multi-channel retail strategy. It has made them relevant in the scheme of things, giving them a competitive advantage over their competitors.
If you haven’t considered this approach for your retail business, now is the time to give it careful thought. You need to consider the channel that suits your target customers and how best to engage them.
Afterward, you can begin to roll out gradually, one platform at a time. It helps you stay organised and maintain your service policy. Lastly, to achieve consistency across the board, harmonise your brand voice.
