To grow your business, you must also expand and improve your operations. As we covered in the previous chapters of this Ultimate Guide To Scaling Your Retail Business, your growth plans will likely require the identification and adoption of new technologies, as well as an effective, centralized inventory management solution to support and enable your operations to scale. With the right tools and processes in place, you need to focus on tactical ways to consistently boost your revenue.
Why You Should Expand Into New ECommerce Sales Channels
Multichannel selling (also known as omnichannel or cross-channel selling) is a business strategy of utilizing more than one sales channel or method to offer your goods or services to customers. But more sales channels means more work and added operational complexity. So why is multichannel selling the growth strategy of choice for most modern retailers?
Lower Barrier To Entry Than Physical Expansion
Before the Internet, the only way for traditional retail companies to grow was by developing additional brick-and-mortar stores or by establishing new physical distribution channels (e.g. negotiating contracts to sell their products in Macy’s as well as Nordstrom stores). Both of these traditional growth options require significant initial financial investments and typically take multiple months or even years to become fully functional.
Today’s eCommerce sales channels leverage the speed and convenience of the Internet to allow retailers a faster, lower risk investment path into new markets. Retailers who are looking to expand their operations and penetrate new markets now have access to numerous sales channels from which they can more quickly and easily enter, test, and optimize.
Acquire New Customers
Although sustainable growth requires operational efficiencies, new customer acquisition is the key to fueling revenue growth. Because today’s digital-savvy consumers are always online, your current and potential customers expect the brands they buy from to not only offer a seamless shopping experience, but also provide multiple channels for them to purchase through. Not to mention, these constantly connected customers typically have favorite marketplaces or channels they regularly go to for their online shopping purposes. Leveraging customers’ built-in brand loyalty to marketplaces, like Amazon, can be particularly beneficial. What better way to grow your business than to actively reach these potential new customers where they’re already shopping?
Establish New Permanent Revenue Streams
The proof is in the numbers. Stitch’s data shows that small to medium-sized retailers who sell through a branded eCommerce site (like Shopify, Magento, WooCommerce, or Bigcommerce) made 38% more revenue by having a presence on a single marketplace (like Amazon, eBay, or Etsy). And by simply adding a second marketplace, online retailers can grow their revenue by an estimated 120%.
Even without utilizing branded eCommerce sites, retailers who sell on two marketplaces see 190% more in revenue than those who only sell on just one marketplace. Not to mention that on average, retailers who sell on two channels have double the revenue of retailers that sell on only a single channel.
While it’s clear from these numbers that multichannel selling is a revenue-driver for retailers, adding multiple sales channels also means adding complexity and new tasks to manage.