Selling your goods in multiple channels sounds like a logical option to sell more for more customers. However, each additional channel demands management and integration between sales channels.
Online, offline, marketplaces, comparison sites, your own website: your customers have multiple options to buy your products. Multichannel retail means selling using different sales channels and/or distribution locations.
By expanding your sales channels, your eCommerce business can reach more customers, be in the same channels your competitors are and adventure into new markets. It also reduces the risk of issues with one or more sales channels.
Considering all the available sales channels, eCommerce sellers have hundreds of different options to choose from. Each of these channels will need:
⇒ Distribution / Supply chain: send the goods from the supplier or manufacturer to the storage site(s).
⇒ Stock management: when a customer orders, update the stock from all the channels. Think about unusual situations like orders sent at the same time.
⇒ Fulfilment: fulfil the orders from a single place or multiple locations.
⇒ Integration: sync all the items above, which might use different systems and technical platforms.
⇒ Customer service: it must be able to sort the issues from different channels.
Multichannel retail means to mix two or more types of retail below:
A. Online
You can sell your goods on your website and/or sell them via marketplaces. You can also use social media, comparison websites and other online channels.
B. Offline / High street
Traditional brick-and-mortar stores.
C. Hybrid / Omnichannel
A mix of online and offline. For instance, the customer can buy online and collect in a shop.
E. Territories
Cross-border sales, with orders received in different territories.
If new sales channels can give eCommerce businesses more room to sell more to more customers, the logical approach could be to use as many channels as possible.
However, each new channel adds exponential complexity to the channel management, for instance, to manage stock.
For this reason, the best approach is to add new channels carefully, after running market and customer research, and to check carefully the incremental effect of new channels.
The main difference between multichannel and omnichannel is that in the first the channels work independently of each other, while in the second the channels are seamlessly integrated.
On omnichannel, customers can easily switch between channels (e.g.: search online and buy in-store).
To make a very clear comparison, think about organising a party. If it was multichannel, you could buy the cake, the drinks and the decoration separately – the main advantage is that you would have a wide range of choices for each item. If it was omnichannel, you could buy everything in a single place – in this case, the main advantage is the customer experience.
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