What is Multi-Channel Retailing?
Multi-channel retailing refers to the retailing of products through more than one channel. These channels can be catalogs, physical stores, e-commerce platform or an online marketplace such as Amazon and eBay. The more channels being utilized by a company, the higher its conversion will be. A good blend of multi-channel retailing comprises of at least one physical location and one online presence. When the product will be made available through both physical and online modes, the rate of conversion and profits both will increase.
Definition of Multi-Channel Retailing
Multi-channel selling can be defined as a marketing strategy which provides the customer with various choices for buying products. In its true essence, a multi-channel strategy includes purchasing from a store, purchasing through a website, interactive television, mail orders, telephone ordering, and comparison shopping websites. The aim of a multi-channel retailing strategy is to increase the loyalty level of customers as well as profitability by offering customers convenience and choice.
How Multi-Channel Retailing Works
Multi-channel retailing is a hybrid approach which includes a blend of different options. On one hand, customers have the choice of buying products from an outlet and on the other side; they have the option to make online websites their marketplace to buy favorite products. Multi-channel retailing maintains its focus in utilizing the distinct distribution channels than that of only one. The underlying reason behind this is that marketing has been conflated with advertising in the previous decades. Multi-channeling involves a blend of both retailing and marketing strategies and significant reorganization and investment are required to make the process successful.
Types of Multi-Channel Retailing
No matter how hard you invest in efforts, a company cannot lure every customer over its side if its marketing efforts are not directed towards the buying pints and preferences of customers. In such a situation, multi-channel retail marketing is vital. The four different types of multi-channel retailing are as follows:
In this approach, companies sell their products from a physical outlet. The customers can interact with the product physically. In this multi-channel form, payments are made through cash transactions or through card/mobile payments. The risk of purchasing the wrong product is none and the customers have confidence in the product quality.
In this approach, catalogs are printed and delivered to potential buyers who can place their order anytime. These catalogs include all details related to offers and its prices. Catalogs can be dispatched through postal mails or emails. Catalog is important in enhancing business exposure as well as brand building. This type of channel communicate your brand information through visual means and ease your customers’ decision making process.
Internet Channels (Amazon, eBay)
Internet channels like Amazon and eBay are those online marketplaces where products are displayed for online audiences so as to enhance their purchasing decision. As a matter of fact, online availability is very important and companies should be very competitive in this aspect. Today customers buying decision is dependent on the availability of information about the products and services your offer in the market place. Internet is the first choice to know all the information before they proceed to retail store.
Social Media (Facebook, Instagram)
Some businesses have developed their business around social media platform through utilizing advertisement channels provided the likes of Twitter, Facebook Instagram. Now shopping online has become very convenient for customers to buy products without having to leave the social media website.
Advantages and Disadvantages of Multichannel Retailing
Advantages of Multi-Channel Retailing
Multi-channel retailing provides several benefits which include:
Acquiring new customers: Several shoppers like the convenience that is provided through online channels in comparison to physical store whereas; other people prefer buying from online marketplaces like Amazon and eBay. The more avenues customers have to find and buy your product the more new customers the business will receive.
Lower entry barrier than that of physical store: Previously business expansion meant to open up a new physical store. Through the internet, it has now become easier and cheaper for businesses to go up and running.
Establishing new revenue streams: The more customers you reach the more your potential for revenue will grow.
Disadvantages of Multichannel Retail
Selling the Irrelevant Channels. Using multiple mediums to reach your audience is important. But promoting your products and service to irrelevant audience can harm your revenue generating stream.
Infrastructure. Those retailers using multiple marketing channels need a proper infrastructure. There are many activities to handle like listing, inventory management, processing orders and customer services can really hurt your retail business if don’t have a strong systems inplaced.
Multi-Channel Retailing Examples
Frito Lay’s: Direct to Customer
Not every multi-channeling innovation is necessarily done for profit. In 2018, lays required for reaching its charitable audiences which the manufacturer of chips hoped to get interacted for helping in Operation Smile which offers surgical care to children around the world that are affected by the cleft condition. The aim was to raise $1 million but the question was how to stand out?
Amid the bustle of Times Square, Lay’s opened a funhouse in New York City where you can find life-size Mr. Potato Head along with celebrity ambassadors Jordin Sparks for laying all ground works for promoting. After this, for nearly two months in store, the specially packed pack of Lay’s was made available and a certain percentage of every transaction is dedicated towards Operation Smile.
Challenges to Multi-Channel Retail Marketing
Multi-channel retailing may not be perfect and presents a whole new set of challenges which include:
Differentiation of Marketing Channel: When customers are provided with various choices and chances, messaging only is not enough. In order to make customer engaged. Messaging needs should be tailored which suits the preferences of customers and takes into account different factors such as behavioral, demographic and transactional history.
Targeted Marketing Campaigns. Retail Management should conduct market research to know the target customer base. By doing this, it will help you to reach your customers through different marketing campaigns and convince them to visit your sales point or make online sales.
Real Time Stock Management. Keeping track of every sales channel can be confusing and time taking activity. It is the responsibility of management to make sure the availability of stock through every channel. In order to cope up with the situation, a real time stock management is crucial. It will help you to keep track of every sale made.