What Is Multichannel Selling?
Multichannel selling is the practice of selling goods on multiple sales channels at once. With the rapid growth of ecommerce and digital sales channels, multichannel selling has never been simpler to launch and manage. Multichannel merchants may sell on their own ecommerce website, multiple marketplaces (from Amazon to Walmart Marketplace), wholesale or B2B channels, and social media.
Consumer shopping habits were drastically changed by 2020’s rapid ecommerce growth, and 2021 gave rise to a new ecommerce shopper. Our recent consumer survey revealed that as consumers grew more accustomed to life at home, they began to prioritize shopping on online marketplaces. In fact, 43% of survey respondents enrolled in a new marketplace enrolled in a new subscription service during the pandemic. Consumers, however, are not loyal to a single marketplace. Many of them have subscriptions to multiple marketplaces, and although 61% of our survey respondents indicated that they have an Amazon Prime membership, 70% indicated that they would rather make a purchase directly from a retailer’s site as opposed to Amazon if they could still get fast, free shipping.
So in short, today’s shoppers are multichannel, so merchants must be multichannel in order to reach as many new customers as possible and stay top of mind for their current customers.
What Is the Difference Between Multichannel and Omnichannel Selling?
Multichannel and omnichannel selling are terms that are often used interchangeably, and they are, in fact, very closely related. While multichannel selling is the practice of selling products across multiple sales channels, omnichannel selling is an approach to multichannel selling that aims to create a seamless and frictionless shopping experience across all channels.
Omnichannel selling is key to building brand equity and consistently creating the same customer expereince regardless of where they make their final purchase. It is enabled by a cohesive marketing plan, responsive customer service, and streamlined omnichannel fulfillment.
What Are the Advantages and Disadvantages of Multichannel Selling?
Multichannel selling is the most effective way to scale a business because it puts your business in front of as many customers as possible, connects with shoppers at different points of the buyer journey, and decreases risk. However, there are some disadvantages, especially for SMB’s. Expanding to multiple sales channels can complicate operations from sales and marketing, to inventory management to fulfillment and delivery. It’s also important to monitor and measure the channels that are most profitable for you to ensure you’re not pouring time and resources into channels that are not profitable. In fact, not having a full understanding of your landed costs and contribution margin for individual channels can eat up profitability on other channels.
Ahead we’ll discuss three major advantages of multichannel selling and how merchants of all sizes can leverage technology and strategic partnerships to avoid the common pitfalls of multichannel retail.
Increased Brand Awareness
The truth is, your best customers aren’t always looking for you, which means you have to meet them in the places they’re already shopping. Even the best marketer can only drive so much traffic through a single sales channel, and whether your current primary channel is a brick and mortar store, an online marketplace, or your own eCommerce site, adding additional sales channels will expose shoppers to your brand in multiple stages of the buyer journey to increase general brand awareness, drive more traffic to all of your channels, and grow your market presence.
Casting a wider net with a multichannel selling strategy can also significantly reduce risk for your business by eliminating reliance on a single sales channel. Marketplace forums are rife with stories of sellers being booted for a simple misunderstanding of terms, B2B sales opportunities plummeted as a result of the Coronavirus, and a security breach or backend failure on your eCommerce site could stall sales and quickly turn users away from your storefront. By creating a web of multiple sales channels, you decrease risk by eliminating a single point of failure in your sales funnel — and all channels, whether digital or traditional, are unique and have their own upsides and downsides. Diversifying your sales channels enables you to capitalize on the best aspects of each channel to compound sales growth.
The Right Place at the Right Time
The new digital economy allows shoppers to research and compare multiple products and platforms without leaving their couch. But even with this wealth of information at their fingertips, many shoppers are still highly susceptible to impulse shopping. In fact, impulse buys make up nearly 40% of money spent online each year, and 54% of shoppers have admitted to spending $100 or more on an impulse buy. The only way to capture those impulse sales is to be in the right place at the right time, which in the case of online shopping, is everywhere all of the time.
Marketplaces: Start Your Multichannel Selling Journey
Online marketplaces like Amazon and Google Shopping are low-cost, low-risk sales channels that expose your products to a large, high-intent customer base. Creating product listings on any of these platforms is quick and easy and immediately benefits your online presence through the built-in SEO advantages of listing on a high-traffic website. For these reasons, many merchants make marketplace listings their first step into building a multichannel selling strategy. The downside of marketplace listings is that they don’t give shoppers a fully branded experience in their purchasing experience and do little to drive traffic to your eCommerce site. They are also highly-competitive, have stringent customer service and fulfillment requirements, and will cut into your profits with commissions and fees.
A key to standing out in online marketplaces is to fully optimize the content of your listings with high-quality photos and concise yet specific product descriptions. Photos should accurately reflect the quality of your product to reduce costy returns and negative reviews, and descriptions should be comprehensive and detailed to help your products show up in the most relevant queries. Your strategy should also include an unwavering commitment to winning the buy box with competitive pricing (without negatively impacting your margins) and reliably speedy order fulfillment.
Web Stores: The Backbone of Multichannel Selling
A web store, often supported by an eCommerce platform like Shopify or WooCommerce, can serve as the online “headquarters” for your business and the backbone of your multichannel selling strategy. It allows you to build a brand presence, determine your own standards for customer service, and have full ownership of your revenue stream. This sales channel will be a more significant upfront investment of both time and resources, and as technology continues to evolve, will require regular maintenance and attention. You will also be responsible for your marketing strategy, optimizing your SEO, and driving traffic to your site, but you will likely find that this channel to be the cornerstone of your strategy and the key to developing your brand’s personality.
Social: The Rising Star of Multichannel Selling
The role of social media has quickly evolved from marketing tool to viable sales channel with Facebook Marketplace and Instagram’s shop-able posts. These platforms’ wealth of user data allows for highly targeted marketing campaigns, and their community-minded structure facilitates regular interaction with your customer base. However, small to medium-sized businesses may struggle to regularly create high-quality content, and without the help of paid ads it can be easy to quickly fall out of favor with social media algorithms.
Wholesale: Multichannel Selling Meets Omnichannel Strategy
Adding a wholesale sales channel is an effective strategy to increase sales without increasing marketing spend, and adding a B2B sales channel evolves your multichannel selling strategy to an omnichannel strategy. This low-risk sales channel will allow you to take advantage of a reseller’s established loyal customer base and will act as a revenue driver to support your D2C channel growth. Establishing partnerships with national and international resellers will expand your business to new markets without any upfront capital investment.
While brick and mortar retail may be an afterthought to some merchants, the in-store shopping experience will continue to be an integral part of the buyer’s journey, particularly for products like food and bev, cleaning supplies, cosmetics, electronics, and personal accessories. Building a robust wholesale channel through brick and mortar retailers can often be time consuming, especially for small brands. The traditional route is to find a distributor who will shop products around to sell to retail chains. Building a partnership with a distributor can be challenging, as there are many factors to take into consideration. Since the distributor will not only be selling your products but likely similar products from your competitors as well, you’ll want to find a partner who is excited about your product and advocates for your brand. You’ll want to do extensive research by going to trade shows, joining a trade organization, or scouring the wholesale directories to find a distributor that has the time, resources, and expertise to not only take on your brand but to fight for it and sell it to as many retailers as possible.
Alternatively, you may choose to distribute your product yourself by building relationships at local retailers. It’s often best to start with small boutiques to build a resume of sorts with successful sales numbers and a history of reliable fulfillment. The best way to get the attention of a potential retail buyer is to share samples of your products, either through an in-person dropoff or targeted, personalized mailings. It’s important to always be ready to give a succinct and engaging pitch that clearly differentiates your product from your competitors’ and shows how your product is the perfect fit for their store layout and customer base. Again, attending trade shows is a proven way to get your product in front of buyers, and researching to find the best fit shows will make sure you get the best return on your investment.
Online resellers can be another lucrative avenue for your wholesale channel, and can quickly push your products into new markets with little risk by capitalizing on the reach of your reselling partners. You’ll be selling your products to resellers at a steep discount, so you may want to consider having a minimum order quantity to ensure that wholesale orders will be large enough to offset the discount and drive revenue. If your products sell well, resellers will be likely to make regular large volume orders to keep your items in stock, giving you a consistent revenue stream to support even further growth.
Because a wholesale channel requires bulk sales that many B2C merchants aren’t accustomed to fulfilling, it’s important to have a flexible fulfillment model in place before establishing partnerships with resellers. You should have confidence that your fulfillment model can effectively fill large pallet or LTL orders to resellers without falling short of the expectations of your direct to consumer customers. It’s also important to have the capability to scale up quickly should your wholesale channel really take off.
The Future is Omnichannel (B2E)
It’s clear that the established business models of B2B and B2C are a thing of the past and multichannel selling is the only way for merchants to reach their customers where they want to to be met. The present state of commerce is B2E, or Business to Everyone, and the merchants who have adopted this mindset by expanding their sales channels and optimizing their fulfillment to meet consumer expectations are the merchants shaping the future of commerce. The B2E model is omnichannel, integrating all sales channels and simplifying multichannel sales through strategic partnerships, cutting-edge technology, and a distributed network.
To learn more about how Ware2Go is streamlining multiple sales channels and optimizing fulfillment for our merchants, take a look at our solution.