Advantages of Multichannel E-Commerce
When you expand your business beyond a single channel, you give potential customers new ways to purchase from and interact with you. When you manage channels in a single platform, you also streamline internal operations and increase your business resilience for future growth.
Optimized Customer Journey
With so many options at every click, consumers can chart increasingly complicated paths to purchases. Nearly any online experience could be a potential opportunity to spur a transaction within a few simple clicks. The shortened path from inspiration to a decision to purchase indicates that now, more than ever, consumers can rapidly transition from a variety of online activities to a purchase. Additionally, the proliferation of mobile browsing — even while in a brick-and-mortar store — means consumers are always shopping. But one theme remains constant throughout all of these shifts in buyer perspectives: consumers still expect brands to meet their demands wherever they shop.
A multichannel approach allows you to not only give your customers more options, but also meet them where they are. As you expand to a new channel, your audience grows to incorporate the users of that channel.
Experimenting with new channels and new ways of connecting with consumers is a solid growth strategy, but it often comes with a trade-off. For example, it’s challenging to create an optimized customer experience on all of the marketplaces and retail sites where your consumers shop. The costs of listing, marketing, storing and fulfilling for each channel become prohibitive beyond a certain scale and can easily overextend your business.
Brands must take a more tactical approach.
Increased Business Resilience
In business, heavy concentration on one revenue stream, without cultivating the potential within others, increases risk over the long term. And as a brand with products to sell, you don’t want to rely entirely on one or two channels.
Most brands see a multichannel strategy as an avenue for growth, and rightly so. But channel diversification is also a great way to protect your business from disruptions.
The COVID-19 pandemic exposed the weaknesses of some brands and retailers. In particular, sellers who relied heavily on a limited number of channels, fulfillment partners or supply chain sources experienced sudden, debilitating challenges. Some sellers were able to recover by quickly pivoting selling strategies. However, many were not so fortunate.
To effectively weather disruptive forces beyond your control, you should consider building a resilient e-commerce business based on four key pillars of diversification:
- Channel Diversity — List and advertise your products across multiple channels, including marketplaces, retailers, search engines, your website and more.
- Fulfillment Diversity — Expand your shipping capabilities so you’re not dependent on a single method of delivering products to your customers (both B2B and B2C).
- Geographical Diversity — Tap into new sources of demand in multiple markets, usually through international partnerships with distributors, retailers or marketplaces.
- Supply Chain Diversity — Mitigate risk by creating backup plans for sourcing or manufacturing your inventory.
While diversification requires dedicated time and resources, it could be what makes a difference when disruption arises.
Streamlined Internal Operations
Diversifying your marketing, selling and fulfillment strategies, while initially requiring substantial work, eventually yields lasting benefits such as improved internal communication, direct attention to and resolution of ongoing logistics challenges, data-driven knowledge of specific sales channels and more.
Successful brands tend to be operationally agile and understand the importance of:
- Cross-team communication and transparency. The actions of your marketing team have a direct impact on your selling efforts. Likewise, your marketplace team may be aware of recent selling trends that can inform decisions about your ad budget allocation. Therefore, it only makes sense that the objectives, KPIs and actions of each department are aligned with the teams they impact the most.
- Logistical preparedness. Every time you expand your operations to a new channel, the challenges your team faces grow exponentially. The brand’s entire product catalog must meet the unique content standards of every channel. Pricing must remain consistent, yet competitive. And inventory levels must remain up to date across every site so that you’re not unknowingly selling out-of-stock products. The bottom line is that you’ll be wasting a lot of time and resources if your team isn’t prepared for multichannel selling.
- Channel expertise. Mountaineers attempting to climb Everest for the first time rely on a sherpa to guide their way for many reasons — familiarity, efficiency and expertise. Likewise, you need a dedicated individual or team that can help you navigate the unique challenges presented with each new channel your brand sells on. It’s truly the best way to ensure that you’re aware of every requirement, update or new offering a channel may present.
Named #1 Channel Management provider by Digital Commerce 360 since 2013
ChannelAdvisor, a CommerceHub company, helps brands and retailers list their products across hundreds of channels, stand out with effective advertising, easily syndicate product data, provide a better path to purchase for customers, and make better business decisions with retail analytics.