With some of the most important retail events of the year on the horizon it’s time to shine a spotlight on multichannel retailing.
From what it is & the pros and cons – to how the multichannel shopping experience is different for consumers, the top factors and technologies to achieve success, and examples of brands who are winning at multichannel retailing – we’ve covered everything you need to know below.
In This Guide to Multichannel Retail:
First things first: What is multichannel retailing?
Multichannel retailing is the promotion and selling of products across multiple channels.
Where traditional retail is minimal in scope (with channels such as in-store, catalogues and over the phone), in today’s digital world you have websites, social media, apps, online marketplaces, EDMs, and many more ways in which to sell a product to a consumer.
And the reason behind the growth of multichannel retailing? It allows consumers to purchase via whichever channel works best for them.
What are the biggest differences between multichannel and omnichannel?
While they may seem similar from a distance, there are actually a few key distinctions which can help you tell multichannel and omnichannel apart.
Multichannel is centred on a retailer’s product – where there are separate opportunities, across multiple platforms, for a customer to interact with a brand and buy, depending on their preference. It’s more about the quantity of channels and aims for a high level of customer engagement – but the buying journey is generally constructed around the channel itself.
Whereas omnichannel is about creating a single experience – no matter the channel – based on a unified strategy. It’s customer-centric, ensuring a consistent journey, and where possible, personalised to their needs.
It can take a bit to get your head around, so we’ve also explained it in a bit more detail here.
What are the advantages of multichannel retailing?
There are plenty of good reasons to engage in multichannel retailing.
- Meet your customers where they are. Because you’re marketing/selling across multiple platforms, it means your customers have the convenience of purchasing where they feel most comfortable.
- Greater brand exposure. When it comes to marketing, multichannel provides an opportunity to get your retailing brand out to a much larger audience. And it also gives you a chance to tick off those all-important touchpoints – most people won’t buy the first time they see your brand, but they are more likely to if they see you time and again.
- Diversify reach. Multichannel retailing can ensure your products reach a wide range of people, not just those who typically buy from you.
- More channels for conversion. The more channels you sell on, the greater your potential for converting from marketing to a sale, resulting in a higher turnover than if you only had a physical store and/or a website.
- Data insights. Multichannel retailing can help your business capture a range of data, so you can understand and adapt to buyer behaviour. It means you can get to know your customers on a deeper level.
- Improve customer experience and loyalty. When your customers are able to choose the way they want to buy, they are more likely to be repeat customers. You also have an opportunity to build on that relationship by presenting personalised offers.
What are the disadvantages of multichannel retailing?
There are some fairly serious downsides to multichannel retailing that you should keep track of:
- Stretched resourcing. Multichannel retailing requires significant resourcing which could impact your inhouse operations and affect other areas of the business. It could also interfere with the customer’s experience, leading to frustration and dissatisfaction.
- Difficulties with technology and integration. To maximise the benefits of multichannel retailing, it’s crucial that the right technology is integrated in the business. If it’s not, it will be difficult to gain the traction required to make multichannel retailing a success.
- Inconsistency across channels. It’s challenging to get consistency across all channels, again, making it tricky to realise the type of results possible from multichannel retailing – especially if online and offline aren’t properly integrated, and lack visibility of each other’s stock, and have different pricing strategies.
- Internal operational issues. From maintaining the right stock levels, to managing multiple distribution locations and the pressure of delivering a high standard of service across all channels, there are many ways multichannel retailing could negatively affect the internal operations of a business.
- Requires investment. To set it up right, multichannel retailing will need an upfront investment, which isn’t always possible for SMEs, with increased costs to cover extra operational activities. Being able to quickly scale to cover growth is essential too.
What makes the multichannel shopping experience different?
If we stretch our memories back far enough, we might just remember what it was like to only have physical stores as an option for retail shopping. The process was very linear, and options were limited.
Today’s multi-channel shopping experience is very different for consumers. The path to purchase can be a messy one, with many decisions to make along the way. We can do research before going into a store (if we even want to go into a brick and mortar shop). It is easy to compare offers, discounts, reviews and features and often the same product is sold by a number of retailers.
So who will get the sale? That could come down to whether the customer wants it delivered (and how much shipping costs) or if they would rather ‘click and collect’ so they can get it the same day. Which means they need to know if the local store has stock – so hopefully the online merchant has accurate and updated stock numbers.
Think about the last thing you bought and how you got from A to B – knowing you wanted to buy the product, to eventually making the purchase. It can be an interesting journey, that’s for sure! And one that is so very different today compared to 20 years ago.
What is an example of a multichannel retailing strategy?
All Beds is a business that sells mattresses and bed bases, frames and headboards to the general public. They have a large physical store and up until six months ago, mainly engaged in traditional retailing. Now All Beds has rolled out a multichannel retailing strategy, which includes the following elements:
- Capturing leads via carousel Facebook/Instagram advertisements, leading browsers to specific product pages on their website.
- They also have curated social media pages on Facebook, Instagram, Pinterest and TikTok – with native advertising where possible (a paid ad which matches the look, feel and function of the platform).
- Depending on what is viewed on their website, they retarget buyers on social and in Google search, with special offers.
- All Beds still do physical catalogue deliveries to households in their locality, but they have QR codes so people can then look at the catalogue on their phone to get more info and see stock levels. People can even purchase directly from the catalogue on their phone.
- They capture email addresses, so they can send out EDMs.
- All Beds have in-store QR codes next to each product, allowing customers to pull up more information about the item, compare beds and see what kind of purchasing plan they could get.
- Their messaging is consistent across all channels, with ‘the most comfortable beds for the best night’s sleep’, allowing consumers to know All Bed’s specific selling point and recognise it wherever they see it.
- All Beds have an accurate timeframe for delivery once an order is placed, so customers will know exactly when their bed will arrive.
- In-store employees are given regular updates on what is happening online, and the online team provides reports of buyer behaviour to help drive physical shop sales.
Because All Beds has a relatively niche product, they are able to focus on being a standout choice for that one item, with a range of consistent and easy-to-access multichannel retailing.
The 11 success factors for multichannel selling
So you think you might give multichannel retailing a go? Great! Here are the 11 key foundations to ensuring you maximise the possible benefits from the practice.
- Consistency. It’s important that the brand experience is consistent across all platforms.
- Start with the basics. For SMEs who are just starting out with multichannel retailing, it’s best to take it slowly and gradually introduce new channels – instead of trying to cover them all at once. This will allow you to create a strategy that works, then roll it out each time you open a new channel.
- Flexibility of campaign across channels. While consistency of messaging and delivery is important, there also needs to be an element of flexibility when it comes to your multichannel retail campaigns. This is because not all things will work on every channel and once data starts coming through, you might need to make adjustments to suit.
- Targeting the right audience (on the right platform). Your target market will have different behaviours depending on the channel they prefer to buy from, so make sure you understand that first – then meet those needs. And, you also don’t have to be on EVERY channel, just the ones that will work best for you.
- Set clear objectives. Knowing what you want to get from your multichannel retailing gives you a better chance of success. And the answer is not to just ‘increase sales’, be specific.
- Automation. Automation is key if you want to run any kind of successful multichannel campaign. There’s all sorts of wonderful ways you can automate touchpoints with potential customers (and stay top of mind with current customers).
- Tracking results. Remember those clear objectives? Now you need to track whether you’ve achieved them, or which areas require reworking.
- Driving engagement. Most of the time, customers want to build some kind of relationship with the retailers they buy from, we all like to purchase from someone we feel like we know. They’ve chosen to buy from you for a reason, so make the most of that and be a business that they would like to talk to and will refer friends and family to.
- Integration. Integration of software, processes and operations will allow your multichannel retailing campaigns to do better – you want the right hand to always know what the left hand is doing (and vice versa). And this is applicable to external processes too. For example, think about your customer’s experience, they want their in-store loyalty card to also work online.
- Messaging. This can be a hard balance to get right, but your messaging needs to be consistent – while also resonating with the target audience for each channel.
- Supply chain. You need to have a lean mean supply chain machine to succeed at multichannel retailing. From maintaining the right stock levels, to ensuring efficient picking, packing, shipping and delivery, to top notch reverse logistics – it’s all essential.
(For more information on B2C and B2B multichannel selling, check out this comprehensive guide.)
3 examples of companies using multichannel retailing successfully
Apple’s multichannel retail strategy
Most of Apple’s products are purchased online, but instead of shutting their physical stores – they decided to reinvent their purpose. From hands-on product demonstrations to education and technical support, consumers love the opportunity to interact with items before they make a purchase, or simply learn more about their products.
The Apple brand is not just about a gadget, it’s about an experience, and that’s what still drives people to their more than 500 retail stores. Consumers could just buy their phones or earpods online and be done with any kind of personal interaction – but their loyalty and enthusiasm for the brand has them still interested in visiting physical stores.
And when it comes to brand recognition and messaging, no matter the channel Apple is right up there with the McDonald’s and Coca-Colas of the world.
Allbirds’ multichannel retail strategy
Allbirds is a wonderfully successful Kiwi/American brand, and keeping to its simple (yet effective) core messaging has meant the company can cross many retail channels with ease. Allbirds market their shoes as being one; comfortable and two; sustainable.
By continuing to emphasise these two selling points, they can easily retouch consumers wherever they are and build brand recognition. And while Allbirds are a digital-first retailer, they do operate a number of physical stores across Asia, Europe and North America.
Co-founder and co-CEO Joseph Zwillinger recently reported that “opening new stores drives brand awareness and provides a halo effect on the overall business, including an increase in the absolute number and mix of repeat customers who shop with us both digitally and in stores.”
In fact, their multichannel repeat customers now average a spend of 1.6 times more than those who have purchased multiple times on a single channel.
Sephora’s multichannel retail strategy
By simply engaging with their customers where they like to hang out – Instagram – beauty heavyweight Sephora is able to easily convert views to sales. Followers can see a post and then click through to the particular product on the website, allowing for an extremely straightforward path to purchase.
Convenient, quick and hassle-free, Sephora’s multichannel retailing functionality capitalises on the fact that many buyers will make an impulse purchase when they see a product on a social feed. They can then continue to retarget if a sale doesn’t go through.
Like Apple, Sephora also has a well-established physical store presence, and this is actually where three-quarters of customers will make a transaction with the retailer for the first time. Further to this, Sephora has also developed an app for shoppers to use in-store – emulating the knowledge of a personal shopping assistant, with personalised recommendations and product reviews, and ultimately nailing the customer’s overall brand experience.
What multichannel retail software should I use?
A SME business will have to balance cost with need when it comes to choosing the right multichannel retail software, but it’s also important to consider future requirements – selecting a provider who can grow with you.
Make sure your shortlist consists of software that is suited to a multichannel strategy, and has the level of complexity required to capture and analyse data, fulfil orders, automatically update and control inventory, integrate with other systems (third party logistics/3PLs) and provides a central point for your entire supply chain.
With the right strategy in place, and the software to support your efforts, mastering multichannel retailing is possible in 2022. Be aware of the challenges but also focus on all the possibilities – because done the right way, the potential for growth is massive.