As the pace of today’s technology accelerates, the evolution of the retail landscape has also continued to advance. There are more channels to sell on and ways to reach shoppers than ever before, and smart retailers are taking advantage of these new virtual selling platforms. They understand the best way to fuel growth is by adopting a multichannel (or omni-channel) sales and brand strategy. Yet, the more sales channels and technologies you operation on, the more complexities your team has to tackle.
From managing inventory and incoming sales data from various channels, to tracking shipping and fulfillment across various warehouses, many multichannel retailers are fighting to maintain efficiency while boosting productivity.
The Many Benefits of Multichannel Selling
There are many reasons why businesses looking to quickly grow and diversify their revenue decide to expand into multiple sales channels. Theses are the top reasons:
- Acquire New Customers - Some shoppers prefer the convenience of purchasing online vs in-store, while others go straight to marketplaces like Amazon for their buying needs. The more avenues people have to find and buy from your brand, the more new customers your business receive.
- Establish New Revenue Streams - The more customers you can reach, the larger your potential is for revenue growth. Stitch’s data revealed retailers who sell on a branded site plus at least one online marketplace make 38% more revenue. And retailers who added a second marketplace saw revenue increases of 120%!
- Lower Barrier to Entry Than Brick-and-Mortar Stores - Business expansion used to mean opening a new physical store and all the expensive upfront costs that went along with it. The Internet has made it cheaper and easier than ever to get a business up and running.
The Operational Challenges of Multichannel Retail
The financial benefits of multichannel selling can often cause retailers to jump into an omnichannel strategy before ensuring their operational processes can support the growing order volume and complexity these additional channels will drive. In fact, a FitForCommerce survey reported 69% of retailers do not think their current systems are equipped to handle omnichannel requirements.
These are just a few of the operational challenges retailers face when running a multichannel business:
- Inventory Visibility and Control - When you expand into new channels, you need to have available inventory to support them. The more channels you have the more crucial inventory accuracy becomes, requiring visibility into and control over where your inventory is across your various channels and warehouse locations.
- Fast Fulfillment - Part of being an omnipresence brand is having a fulfillment method that’s always ready to quickly and seamlessly deliver the products your customers want. Establishing a flexible, reliable, and scalable fulfillment strategy that doesn’t eat into your profit margins is a more critical and daunting challenge than retailers initially realize.
- Data Management and Analytics - As your channels proliferate, so will the amount of data coming in and the number of data sources you have to manage. But your business data shouldn’t exist in a vacuum. To get a big picture view of your business and glean actionable insights from your data, you must break down these data silos and integrate your business intelligence into a single dashboard.
Are you ready to start reaping the benefits and tackling the challenges of multichannel retail? Read the new Fueling Growth Through Multichannel Selling chapter of our Ultimate Guide to Scaling Your Retail Business to explore the multichannel landscape, determine the right channels for your business, and establish an effective multichannel retail strategy.