What Is Multi Channel Retailing?

When it comes to retail, it’s hard to stick out from the crowd. If you want to have the best chances of reaching a big audience and generate the most sales you can, it’s worth considering a multi-channel retailing strategy.

Multi-channel retailing can benefit businesses with ambitious growth plans, but implementing a strategy can seem a daunting task. In this article, we’re going to explore what multi-channel retailing is, the advantages it can bring to your business, as well as some disadvantages and pitfalls you should be aware of.

Defining multi-channel retailing

Multi-channel retail is the selling of goods and services through multiple sales channels. The purpose of a multi-channel strategy is to meet customers where they are through implementing as many touch points as possible.

A single-channel strategy involves selling in one place, such as through a website or storefront such as Etsy. A fully-fledged multi-channel retailer would sell across a website and a host of other channels, including online marketplaces like Etsy, Amazon and eBay, and social channels such as Instagram and TikTok Shop.

Multi-channel vs omnichannel: what’s the difference?

Multi-channel retailing often gets mistaken for omni-channel retailing. They’re similar, but there’s a key difference when it comes to data collection and inventory management.

In multi-channel, data is collected within each channel but is not necessarily shared or integrated with other channels. This can lead to a disjointed view of customer behaviour and preferences, and makes it harder to manage stock levels.

Conversely, in omni-channel, data is shared and integrated across channels, providing a holistic view of customer data. This allows for more personalised and effective marketing and customer service, while enabling you to manage inventory across all channels in one place.

Benefits of multi channel retailing

Multi-channel retailing offers many benefits, such as increased reach, sales and brand awareness for businesses. Let’s take a look in more detail.

Reach and sales

By being present on multiple channels, businesses can tap into a wider range of audiences and demographics. It gives businesses the opportunity to reach customers across a variety of ages, interests, personalities, and habits.

Furthermore, being present on multiple channels increases the opportunities for sales. Furthermore, customers who find it convenient to shop or engage with a business in their preferred channel are more likely to make repeat purchases, increasing average customer lifetime value.

Customer insights

Businesses can use data from these sales channels to get a better understanding of their customers and how they shop. This data can help improve marketing and product development efforts as well as provide insight for inventory management tactics to optimise profits.

The customer experience

Multi-channel retailing offers several advantages for customers. For one, it allows them to shop around and compare prices across different channels before making a purchase.

Additionally, it gives them greater flexibility in terms of how and when they want to shop – whether it’s online, in store, or through a mobile app.

And finally, it provides a more personalised shopping experience, as customers can receive targeted recommendations based on their previous shopping behaviours.

Risk mitigation

Relying on a single channel for sales and customer engagement can be risky. If that channel experiences a downturn or disruption, the business can suffer significantly. A multi-channel strategy spreads this risk across various platforms, ensuring that if one channel underperforms, the business can still engage customers and generate revenue through other channels.

Drawbacks of multi channel retailing

While selling on multiple channels is an effective way to generate more sales, it’s not without its drawbacks, especially if you approach it with a lack of preparedness. Here are some potential drawbacks and pitfalls to look out for.

It’s difficult to keep track of inventory

The biggest challenge of running a multi-channel strategy is keeping on top of inventory data across your different channels. That’s because inventory levels aren’t automatically synced across each of your channels.

For example, let’s imagine you have 100 hats in stock, and are selling the unit on your Shopify store, as well as on Amazon and Etsy. If a customer makes a purchase on Etsy, you’ll have 99 units left. That’ll be reflected in Etsy, but not Amazon or Shopify. Those channels will still think you have 100 units left – unless you manually update them.

This is a basic example, but you can see how it could become a real problem if you’re managing tons of SKUs across multiple channels. It quite easily results in situations where customers make an order because an item isn’t marked as out of stock, when in reality it is. That’s not great for the customer experience, and will have your customer service team working overdrive.

This problem is why many eCommerce brands instead opt for an omnichannel approach, which enables you to sync inventory data across all of your platforms.

It’s a significant investment

Getting the most out of multi-channel retailing requires a significant amount of time and money. While testing the waters with one or two channels won’t be too costly, you’ll find that additional costs quickly add up as you look to grow on new platforms.

There’s costs associated with set-up, marketing, and finding people to manage these new accounts on an ongoing basis. With that in mind, it’s important to start small, and only begin to scale and add new channels when you’ve got data-backed evidence that things are working.

Implementing a multi-channel strategy

Scaling up a multi-channel approach can be daunting, especially if you’ve never done it before. The most effective way to run, grow, and optimise multi-channel retailing is to outsource your fulfilment to a third-party logistics provider (3PL).

In addition to taking care of picking, packing, shipping, and returns, a 3PL will enable you to sync your data across multiple channels with a Warehouse Management System (WMS). Through an integration with a 3PL’s WMS, your stock levels will stay up to date across all your channels automatically, meaning you can scale each channel with confidence and effectively turn it into an omnichannel solution.

At J&J, we’ve helped hundreds of eCommerce businesses implement successful multi-channel strategies, and provide the tools to help you optimise costs and give customers the best experience, regardless of where they buy from you.

To learn, call us on +44 (0)1604 968 820 or book a callback via our online form.

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