Going multi-channel with your retail strategy
Did you know that multitasking is actually a myth? The human brain is not capable of doing more than one thing at a time. Scientists have repeatedly found that we are wired to be mono-taskers.
When we think we are multitasking, our brain is actually just switching very quickly from one thing to the next. It is one of the many reasons why texting and driving is a bad idea.
Luckily, retail isn’t a human brain. And multi-channel strategies can be extremely effective when implemented correctly.
If you are not familiar with the term, multi-channel shopping simply refers to customer sales through retail stores like brick and mortar stores, pop-up stores, and online portals like ecommerce sites, mobile apps, and existing marketplaces like Amazon. The lines are becoming even more blurred these days with more and more retailers encouraging customers to shop online first.
In recent years, the options available for multi-channel retailing have significantly increased. Websites like Pinterest are now selling "Buyable Pins" which means customers can make a purchase buy without ever leaving the web. Facebook marketplace, Google’s shopping tab – the BUY ME encouragement is everywhere.
But multi-channel retailing isn’t just about getting your product listed on as many places as possible. It’s also about effectively targeting customers to maximizing their shopping experience and getting them to convert through the most suitable delivery channels for them.
According to McKinsey research, up to 12 sites and applications are used by customers before they action the “Add To Cart” button.
The thing is, the buying process is happening long before a financial transaction happens. So why not optimize your chances for conversion?
The proof is the financial pudding.
Customers who have gone through a multi-channel journey are more likely to spend more money, according to an IDC Retail Insights report.
Key findings include:
- Higher transaction rate of 15-35 per cent
- Higher customer loyal productivity by 5–10 per cent
- Lifetime worth of 30 per cent greater than single-channel shoppers.
The ROI of a successful campaign is well worth it. But where do you even start?
The price must be right
Have you ever checked hotel or flight prices (ah, remember travelling?!), one day, and then the next day, it’s changed? Travel bookings depend on demand so the more people shop on popular dates the higher the price.
There are also differences in network pricing. Many hotels (oh, those sweet days) advertise cheaper deals than on their websites on sites like Expedia and Hotwire. They are telling their clients to buy from these websites and leave with a lower booking margin.
For Direct-to-Consumer brands who go the Amazon route, this often causes a higher demand, but a reduction in profit margins because of the revenue sharing agreements.
There is a way out of this, though.
Using a Product Information Management System (PIM), you can centrally monitor those discrepancies. This technique lets you monitor the product data that is distributed to your channels. The PIM can also help reduce labor costs, increase employee productivity and reduce the number of items that are returned.
Think about all the tech
Moving offline to online or vice versa is also a major challenge, as many customers, (yes, millennials, too) still prefer purchasing goods in-store.
There will almost certainly be a shift of sorts thanks to the COVID-19 pandemic (not always out of choice), but that doesn’t mean that bricks and mortar is dead.
Some examples of ecommerce going back to traditional retail include apparel brand Bonobos and Amazon’s building of showroom discount outlets.
DTC brands with fewer resources can still adopt this strategy, even if it might feel a bit risky.
Strange as it sounds, this might be a good time to take advantage of reduced rental costs to test the waters for a physical presence.
If you opt to branch out, an Inventory Management System (IMS) will be vital. This is the easiest way to connect online and brick-and-mortar store. An IMS system monitors and handles product availability, inventory management, point-of - sale transactions, and shipping or delivery.
Three of the main advantages to an IMS system are:
- Streamlining logistics
- Helps with unexpected demands because of sales or seasons or, ahem, pandemics
- Mitigates the risk of inventory shortages that can happen with multi-channel retail
Learn the logistics
With a multi-channel sales and marketing approach, catering to consumer purchasing needs is easier. Internal networks, however, might not combine multichannel data back into a single channel.
If that's the case, and your sales grow exponentially from $1,000 to $100,000 a month, or if those sales are split between your website, your physical location, and Facebook… whew, things get a bit tricky.
To protect your business from sudden increases in cross-channel sales, your IMS must integrate with your order management (OMS) system.
By doing that you can extract marketplace and other third-party sales data and analyze which channel produces the highest value for customers.
Data is everything here. The best combination systems should include information on products with the highest purchases of repeat or lifetime value.
Your admin panel on your ecommerce should break it down in a single glance. If it does not, you might need to drill down deeper into your reporting – or considering switching to another ecommerce platform.
Go forth and multiply
Multi-channel retailing gives a better customer experience by catering to their needs individually.
While it can come with marketing and operational challenges, considering your multi-channel infrastructure back-end will ensure the user experience is silky smooth out front.
If it hasn’t been said before, we’re saying it now: all we want is party in the front, business in the back.
We may earn an affiliate commission through some of the links on our site.