Gone are the days for single-channel retailers, in today’s era it’s important to make your business stand out from the others. The customers wish to possess the ability to shop whenever they want, from wherever they want, and however they want, single-channel retailers have failed to cater to these consumer needs leading to the emergence of multichannel and omnichannel retail.
What is Multichannel retail?
Multichannel Retailing is the practice of engaging customers through multiple options to interact and purchase with your brand. The brand remains a centerpiece in this retail model, while other channels act as independent silos. It may include selling through traditional outlets such as brick-and-mortar stores, catalogs, mails, and telephones or nontraditional electronic and mobile outlets like websites, emails, apps, social networks, and E-marketplaces.
Thus, marketing, sales, communication, and shopping experiences are different for different channels.
For example, a brand ‘X’ is selling its fashion products via its Brick and Mortar store, Facebook page, Instagram Business Account, Amazon store, eCommerce website, etc. at the same time, but with different shopping experiences.
The multichannel approach is a way to reach a lot of customers by targeting those channels that give the maximum return on investment.
Benefits of Multichannel
Multichannel retailing is an evolving concept. More and more companies are expected to adopt the multichannel approach of retailing to be able to serve their customers better and drive more profits. Multichannel retailing offers the following benefits:
1. Increased Revenue:
Even after you invest a lot of money in advertising and marketing and establish brand awareness, if your customers have only one channel to interact with you, it may not necessarily increase your revenue. But by spreading your business across multiple channels, you could pop up more often into a prospective customer’s view and therefore receive more attention. This will give them the time needed to browse through your store, compare prices, and do their research which is necessary for them to buy from you eventually. Improved revenue is by far, the most prominent advantage that multi-channel retailing displays.
2. Increased Visibility and Reach to Customers:
Most customers hesitate to buy from any business they randomly come across. If they get to interact with your business just one time and through a single channel, then the possibility that they’ll come back to your business or search for it, is impossibly low. A single sales channel would force all your customers to buy from you using just that channel. This approach is okay for the customer who have purchased from you and trust your brand, but it may not attract new customers who are looking around for similar brands. Thus the multi-channel retailing approach, offers your customers multiple ways to interact with your business and select the most comfortable and convenient channel. To put this in simple words, multi channel means more customers and more sales.
3. Improved Analytics and Insights on Consumer Behavior:
Multi-channel retailing allows you to collect vast amount of data on customer purchases compared to a single channel. By analyzing this data, you can gather insights about which sales channels your customers prefer and which ones they don’t, so that you can concentrate your efforts towards those specific parts of your business to work on and promote your business. You do not need to compare different channels’ overall performance instead you can compare how different products perform on different channels and understand which product should be promoted on which channel.
4. Enhanced Brand Image:
Nowadays, customers tend to purchase from the brands that are easily and readily accessible from anywhere at anytime. 24/7 availability of your brand and support services to the customers will enhance their trust and loyalty towards the brand, creating a positive image and brand retention in their minds.
Example of Multichannel
If a brand decides to strategically distribute its products to customers via multiple channels, such as directly through brick-and-mortar stores, an online marketplace like Amazon, or through an independent website, it has adopted the multi-channel approach to retailing.
For example, there is a Brand X that has its own brick-and-mortar store. The brand also takes orders via telephone and social media channels. It also sells on various e-commerce marketplaces like Amazon, Flipkart, Myntra, etc. Thus the Brand X follows a multichannel approach and is present and accessible via multiple sales channels that are independent from each other.
Latest Trends in Multichannel Commerce
Earlier the brands use to rely upon their own website or offline stores to sell products. However, today they have innumerable sales channels and marketplace where they can sell their products and increase sales revenue. As per a report by ReadyCloud 66% of online customers rely on more than one channel for purchases. In a recent study, 71% of customers who use smartphones for research in-store say that it's become an important part of the shopping experience. Smartphones have become the new personal shopping assistant for people to decide the best purchase in-store.
A report by IDC indicates that multichannel shoppers spend more money when shopping, including:
- 30% higher (LTV) lifetime value than single-channel shoppers.
- Up to 10% loyal customer profitability.
- 15-35% higher value transaction.
These insights indicate that, it has become necessary to adopt multichannel or omnichannel approach towards retailing, to be successful in reaching the right audience.