We know that multichannel shopping is the new norm. In fact, almost 75% of today’s consumers are multichannel buyers, and people who shop on more than one channel spend an average of 4% on in-store transactions and 10% more on online transactions than single-channel shoppers.
What’s more, customer retention rates sit at 89% for multichannel businesses compared to just 33% for single-channel businesses.
In other words, choosing a multichannel sales strategy is beneficial both in terms of order value and customer loyalty.
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So, where should you start when it comes to multichannel selling? Here are some of the features, pros, and cons of different sales channels.
Online Marketplaces
Establishing a store on online marketplaces such as Amazon, eBay, Walmart or Lazada tends to be most beneficial for businesses that sell products with mass appeal. However, competition is also usually higher, so it’s critical to implement a multichannel pricing strategy in order to strike a balance between maintaining a competitive advantage and keeping a healthy profit margin.
Pros
- Instant access to a large customer base
- Helps establish brand credibility
- Ability to sell 24/7
- Access to Amazon FBA if on Amazon
Cons
- High level of competition
- Potential for lower profit margins
- More difficult to establish a USP
Cost: Low
Effort: Low
Return: Potential for steady revenue with the right sales strategy.
B2C eCommerce Store
Cutting out the middleman by operating your own retail Commerce website not only gives you access to healthier profit margins but also a higher degree of control over your sales and marketing strategy. However, because you don’t have access to an established customer base (like you would by selling via an online marketplace, for example) you also assume the responsibility of building brand awareness.
Pros
- Full control over your product, sales, and marketing strategy
- Ability to sell anytime, anywhere
- Lower over head costs than a physical store
Cons
- The onus is on you to build a customer base
- Can be difficult to establish credibility
- Potential for increased administration
Cost: Moderate
Effort: Moderate
Return: Potential for significant sales with the right marketing strategy.
B2B eCommerce Store
At the height of the eCommerce era, many B2C businesses are exploring the option of a B2B eCommerce platform as an additional revenue source. While wholesale customers tend to be fewer in number than retail, customer relationships are also usually longer-lasting and thus higher value.
Pros
- Potential for long lasting customer relationships
- Potential for higher average order volumes
- Full control over your product, sales, and marketing strategy
- Ability to sell anytime, anywhere
Cons
- Typically more difficult to grow a customer base
- Potentially lower profit margins selling in bulk
Cost: Moderate
Effort: Moderate
Return: Potential for stable returns once a solid long-term customer base is established.
Physical Storefronts
Bricks and mortar aren’t dead yet, in fact in some industries they are experiencing a renaissance including experimentation with pop-ups. A physical store provides an unparalleled opportunity to engage customers face-to-face and gives customers an opportunity to see and feel products before purchasing – but maintaining a brick-and-mortar store also comes at a high cost.
Pros
- Opportunity to connect with customers in person
- Ability to physically showcase products
- A prime location can be hugely beneficial for sales
- Helps build brand credibility
Cons
- Significantly more expensive than online channels
- Need for more resources e.g. staff and utilities
- Restricted opening hours
Cost: High
Effort: High
Return: Returns could be healthy but the risk and cost is also high. Ongoing success is reliant on a number of variables like location, running costs, the changing market, brand strength etc.
Social Media
If you’re looking for a fresh and powerful way to sell your products, consider using social media as a sales channel. Utilizing the beneficial features of these social platforms can do more than just advertise your business. The Facebook Shop and Instagram shoppable posts allow businesses to sell their product directly on the site—and buyers to purchase even while on mobile.
Pros
- Reach new and precise audiences thanks to targeting
- Automation tools give a “set it and forget it” opportunity
- Highly visual for maximum sales opportunities
- Builds trust with your audience
- Gives opportunity for direct interaction with customer base
Cons
- Social media is an always-on channel
- Customer feedback can be both good and bad
- Requires understanding of new technology and platforms
Cost: Medium
Effort: Medium
Return: When done correctly, social media ROI can be quite high. However, without thorough knowledge and time investment, it could end up being more trouble than it’s worth.
Tying operations together with multichannel data management
As with any business venture, adopting an effective multichannel sales strategy relies on utilizing the right tools to enable smarter multichannel inventory management and a strong supply chain ecosystem.
An integrated inventory management system such as TradeGecko acts a Single Source of Truth (SSOT) for all your data, which is especially important as your business model becomes more complex. Centralized operations lead to a better customer experience and also provide a solid foundation for growth as you continue on your multichannel journey.
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