Blog » What Is Multichannel Retailing?
Multichannel retailing is the practice of using multiple sales channels to reach and engage customers. Understanding how the strategy works is key for expanding your business onto new platforms. In this article, we'll explore the benefits, challenges, and strategies for successfully implementing multichannel retailing in your business.
What Is the Difference Between Omnichannel and Multichannel Retailing?
After seeing the definition of multichannel retailing, you may wonder what the difference is between multichannel and omnichannel retailing. While both strategies involve selling products across multiple platforms, they have different approaches and goals.
Omnichannel retailing’s primary goal is connectivity and coherence across channels. The strategy aims to integrate all sales channels to deliver a seamless and unified experience. For example, with omnichannel retailing, a customer can check product details on an eCommerce website, purchase an item at a physical store, and then receive customer support through a mobile application. Successfully implementing an omnichannel strategy allows customers to switch between channels without any disconnect or discrepancy in information.
In contrast, multichannel retailing is about availability. Its main focus is to make your products accessible to customers across different channels. These channels can include eCommerce sites, social media platforms, third-party marketplaces, or physical stores. While a multichannel marketing strategy often looks to create a connected customer experience, such an objective is not the primary concern. You can implement multichannel retailing without a seamless connection across channels so long as customers can buy items at different touchpoints.
Benefits of Multichannel Retailing for Business
Multichannel retailing can produce a range of notable benefits. Here are some of the most significant advantages of multichannel retailing for product-based businesses.
1. Diversified Revenue Streams
Dependency on a single sales channel can limit your business. It also puts you at risk of a financial downturn if your single channel loses effectiveness. Multichannel retailing removes this risk by opening up different revenue streams. For example, if sales on your online store drop, your business can bolster its sales revenue through third-party market sales. This diversification makes you better equipped to deal with market fluctuations and seasonal trends.
2. More Customer Insights
Multichannel retailing can improve the insights you have into your audience. Selling on multiple channels not only gives you more data, but you also get more diverse insights as each channel provides unique data on customer behavior. For example, your eCommerce website can reveal detailed information about customer behavior, such as:
- Popular product pages and categories
- Average time spent on the site
- Cart abandonment rates and patterns
- The effectiveness of promotions or discounts in driving sales
In contrast, a comparison shopping site like Google Shopping can provide high-level demographic data, such as:
- The geographic location of customers interacting with your products
- The types of devices shoppers use to browse your products
- Insights into specific product interactions, such as click-through rates and impressions
These combined insights help you understand what your audience is buying, and how and where they prefer to shop. You can aggregate and analyze these insights to better execute marketing and personalization strategies.
3. Connect with Customers on Their Preferred Channels
Consumer preferences can vary widely. Some people prefer the immersive feeling of in-store shopping, while others prefer the convenience of online shopping. In addition, the path to purchase is rarely linear. Shoppers often engage with businesses through multiple touchpoints before completing a transaction.
Multichannel retailing gives you a presence across different touchpoints allowing you to reach buyers at every moment of their purchasing journey. When it comes time to place an order, they also have the flexibility to transact through the channel of their choice.
4. Harness the Power of Third-Party Platforms and Their Audiences
Third-party platforms like Amazon, Google, and Facebook give your business a ready-made audience of millions of active users. Incorporating these channels lets you tap into their built-in infrastructure to expand your reach much faster than what is possible by selling strictly through your direct-to-consumer (DTC) website.
These platforms also have well-established credibility, which can help reduce friction in the buying process. For example, a consumer unfamiliar with your business may feel more comfortable buying your products off Amazon as opposed to your website. Additionally, these third-party sales channels have advertising platforms baked into their ecosystem. This can boost campaign efficiency as you can easily target specific customer segments with precise product offerings.
Disadvantages of Multichannel Retailing
While multichannel retailing offers many benefits, there are drawbacks to consider before fully embracing this strategy. Understanding the common challenges in multichannel retailing can help you implement more effective strategies.
Operational Complexity
Managing multiple sales channels adds complexity to business operations. Each new platform requires more work, including tracking inventory levels, maintaining product listings, and processing orders. Streamlining these processes across multiple platforms can be daunting, especially when each channel has its own unique requirements you need to adhere to.
Channel Conflicts
Multichannel retailing can lead to potential channel conflicts. While you may intend to keep everything in sync across channels, you are often affected by other market players. When selling on third-party channels, you need to price your products with competitors in mind. This may lead to price differences between platforms, which could potentially confuse and dissatisfy customers.
Inaccurate Sales Attribution
Accurate sales attribution is a common challenge of multichannel retailing. Determining which channel your analytics should credit for a sale isn’t always straightforward when customers engage through multiple touchpoints during their buying journey. For example, a customer might discover a product through an Instagram ad, research it further on your website, and ultimately purchase it on an online marketplace. In this situation, inaccurately attributing sales to the wrong channels can lead to poor resource allocation decisions.
What are the 4 Types of Retail Channels?
Businesses today can use a variety of retail channels to connect with customers. Each channel offers unique benefits while playing a unique role in a well-balanced strategy. Here are four key types of multichannel retailing channels shaping modern commerce.
ECommerce Website
An eCommerce website is a retail channel that lets you showcase products through a medium you control. It often acts as the central hub for a retailer’s online presence. With an eCommerce site, you dictate every part of the customer experience, from how you display your detailed product information to what recommendations visitors see.
Social Media Channels
Social networks like Instagram, and Facebook are powerful retail shopping channels. They boast a wide range of commerce features including shoppable posts and dynamic product feeds. Social media’s visual nature and viral potential make it ideal for driving awareness and fostering customer loyalty.
Comparison Shopping Engines
Comparison shopping engines, such as Google Shopping, give customers a convenient location to compare products and prices across multiple retailers. You can use these platforms as a low-effort way to increase product visibility to highly relevant audiences.
Online Marketplaces
Marketplaces like Amazon, eBay, and Etsy provide access to a vast and diverse audience. They give buyers built-in trust and convenience which tends to result in higher conversion rates compared to DTC eCommerce sites.
Top Tips for Multichannel Retailing Success
Successful multichannel retailing requires a well-thought-out strategy. Here are some essential tips to help you achieve success in multichannel retailing.
1. Ensure Consistent Product Information Across Channels
Consistent product information is the first step to successful multichannel retailing. Using a Product Information Management (PIM) system like PIMinto can help synchronize product details across all sales channels. The platform gives you a central hub from which to push data, eliminating the risk of discrepancies and enhancing the customer experience on every channel.
Additionally, PIMinto offers the flexibility to use unique data for each channel. It can transmit and receive various data types, allowing you to customize information for each channel based on its requirements or your particular needs. For example, you may want to use different formats for product titles and descriptions when selling on online marketplaces. Or, you may need an efficient way to list different prices from those on your website. With PIMinto, each channel can have its own details while all your core product information remains stored and organized in your single source of truth.
2. Provide Excellent Customer Support
Outstanding customer service should be available across all platforms. You want to handle all inquiries promptly and accurately. Doing so will help customers feel supported no matter where they shop.
3. Understand Your Target Audience
A deep understanding of your customers is key to any eCommerce strategy. Take time to analyze purchasing patterns and identify your customers' preferred shopping channels to create a multi-channel retailing strategy that best serves their needs.
4. Monitor Performance Metrics
Tracking key performance indicators (KPIs) such as sales, conversion rates, and return on ad spend (ROAS) for each channel allows you to evaluate the impact of your efforts. These insights will help you refine your approach to make better decisions about where to invest time and resources.
5. Leverage Cross-Channel Promotions
Cross-channel promotions are an effective way to encourage customers to engage with your brand throughout the buying journey. They also help you incentivize action no matter a shopper’s preferred channel. Adopting this approach makes it more likely that customers will interact with your brand through multiple avenues.
6. Integrate Inventory Management Systems
A unified inventory management system assists in keeping accurate stock levels across all your sales channels. It also facilitates smoother order fulfillment as all stock levels will automatically update without the need for manual inputs. This reduces the risk of inaccurate inventory, or worse, selling unavailable products.
7. Maintain Consistent Branding
A strong and consistent brand identity can help establish trust with your audience. It also makes it easier for customers to recognize your business on different platforms. You can convey a consistent brand identity using messaging, visual elements, and tone that are uniform across channels.
8. Focus on Your Own Platform Before Expanding
Before spreading your efforts across multiple channels, ensure that your own eCommerce site is running efficiently. A solid foundation on your website will give you the starting point needed to launch and manage other channels successfully.
What Is an Example of a Multi-Channel Retailer?
Walmart serves as a great multichannel retailing example. The company seamlessly integrates various channels to provide a convenient shopping experience. Their website lets shoppers browse and purchase products, while their physical stores offer in-person shopping and the ability to pick up online orders.
The retailer also leverages social media platforms such as Pinterest for product discovery and Google Shopping for reaching high-intent searches. This strategy helps Walmart reach a wide audience while maximizing sales opportunities across different channels.
Conclusion
Before you expand into multiple channels, you must first set up a system to maintain accurate and consistent product information. PIMinto simplifies this task by giving you an easy-to-use single source of truth for all types of product information.
Try our Free PIM today to start delivering a world-class customer experience across all platforms
Modified on: 01/23/2025