In decades past, a brand’s reach might have been limited to a single sales channel, such as a brick-and-mortar store. It is safe to say those days are over. Today’s customer shops via multiple channels, from webshops to social media platforms to physical retail stores. This means sellers have many ways to reach potential customers. This also means that customers are dispersed, and sellers need to work all avenues available to reach customers where they are. Enter multichannel selling.
What is multichannel selling?
Multichannel selling is the process of using multiple sales channels to offer goods and services to your customers. A multichannel selling strategy may involve a presence in the physical retail space, including brick-and-mortar stores and multi-vendor spaces like craft fairs or farmers markets. It may also involve online channels, including a webshop and a presence in online marketplaces like Etsy, eBay, or Amazon.
What channels are involved in multichannel selling?
As you investigate a multichannel selling strategy, it can help to focus on eight primary channels that businesses use to reach their target audience.
Physical shops date back to the earliest recorded human history, and they remain a popular retail option for contemporary consumers.
- Owned retail spaces. Some brands have their own brick-and-mortar stores, in which they sell directly to their customers. The maker or manufacturer is also the retailer, in a form of vertical integration.
- Multi-brand retail stores. When you sell your products in a multi-brand brick-and-mortar store (like a department store or boutique), you sell directly to that store, or perhaps to a third-party distributor who sells to the store.
- Physical marketplaces and bazaars. Vendors can set up shop and sell directly to their customers at farmers markets, craft fairs, and street festivals.
Many of today’s retail spaces primarily exist online. Some involve face-to-face interaction when a product is picked up; others deliver products directly to a customer’s door. In all cases, the purchase takes place online.
- Your own website. The most fundamental digital sales platform is a website with an e-commerce platform where customers can purchase directly from you. Many small business marketing strategies are centered on driving customers to their webshop and enabling direct sales. Shopify is an industry leader in this category, providing sellers with the tools they need to host robust webshops on their own site.
- Online marketplaces. This broad category includes warehousing specialists like Amazon, who list, warehouse, and ship third-party products directly to consumers and take a share of the profit. It also includes e-commerce platforms like eBay, Etsy, and Reverb that directly link buyers and sellers. When selling on these platforms, you are in charge of order fulfillment, including shipping and handling, but the platforms moderate disputes and handle a certain degree of customer service. Note that many of these platforms hold their sellers to high standards, and if you fall behind on compliance, you can lose your account.
- Comparison portals. Some customers start their online shopping experience at a comparison portal like Google Shopping. These online platforms are not retailers (although Google is now enabling direct purchases on the Google platform as opposed to linking out to a retailer’s site). Rather, they are referral sites that allow customers to browse similar product listings from multiple retailers and click through to the seller’s site if they want to purchase. There are also price comparison sites, like Honey and Rakuten, which compare prices around the web and let you know if you could save money by purchasing from a different website.
- Mobile-native marketplaces. Mobile e-commerce platforms have surged in recent years, with mobile purchases accounting for approximately 40% of e-commerce sales. This market sector includes companies like Wish and Joom, which have robust mobile apps and prices that encourage impulse purchases. While these apps provide low-profit margins to their sellers, they do offer a tranche of relevant user data that helps connect customers to products they’d seriously consider buying.
- Social media marketplaces. Brands use social media platforms like Facebook, Instagram, and TikTok to merchandise their products to their followers, or reach new audiences via sponsored posts. Users can tap an image in their feed to visit a brand’s webshop, where they can buy the pictured items. Some platforms—like Instagram—even allow users to buy directly from their feeds, without going through a webshop.
3 benefits of multichannel selling
Small business owners embrace multichannel selling as a promising strategy to increase sales. Here are three notable benefits of a multichannel selling strategy.
- Multichannel selling lets you reach customers where they feel most comfortable. Customer preferences vary among certain geographic regions and user demographics. Your job as a seller is to reach customers on the platforms of their choice. A brand that doesn’t have a mobile-friendly webshop could miss out on reaching a customer base that predominantly shops on their phones.
- Multichannel selling embraces a typical customer journey. One secret known to retail professionals is that many customers need to encounter a product multiple times before they finally buy it. A customer’s journey may begin when they see an ad on their social feed—but they’ll likely need to see the product in multiple marketplaces. You never know when a potential customer will finally purchase. By having a presence on multiple channels, you don’t have to worry about guessing.
- Multichannel selling lets you latch on to other companies’ marketing efforts. When you sell a product on Etsy, Amazon, or eBay, those companies take a commission. However, they arguably earn that commission by letting you leverage their brand reputation to sell your own product. The same is true for selling products in retail stores. A good chunk of the customer’s purchase price never makes it back to you, but the retailer fulfills their end of the bargain by showcasing your product to an engaged customer base.
3 challenges of multichannel selling
For all its clear benefits, a multichannel selling strategy also comes with certain challenges.
- Account management. Selling on multiple platforms means maintaining a business relationship with many different companies. The paperwork and compliance standards (listing protocols, tax reporting, shifting terms of service) can be time-consuming.
- Inventory management. By keeping a presence in multiple marketplaces, you make a pledge to deliver products whenever they are ordered. This can make inventory management a challenge. For example, if you are running low on a specific product and a customer purchases your remaining stock in-store, but another customer purchases the product online, you may have to make a tough decision about which order to fulfill. If you cannot quickly deliver the products someone has paid for, your reputation could sour.
- Managing the customer experience. When you sell your products across an array of retail stores and online marketplaces, you lose a degree of control over the customer experience. Bad customer service from a third party can reflect poorly on your brand. What’s more, each of those channels requires attention from your customer service team. With so many platforms to manage, you may find yourself spending a lot of time replying to social media comments or customer inquiries.
Best practices for multichannel selling
As you dive into a multichannel selling strategy, slow and consistent expansion is the key to success. Consider these three tips for multichannel selling.
- Focus on your own platform, and then expand over time. You will have the most control over the sales process and the customer experience on your own webshop. Once you are successfully fulfilling orders on your own site, you can try expanding to third-party retailers like Amazon, Walmart, and brick-and-mortar stores.
- Strive for consistency. Having a consistent brand presence across multiple marketplaces means that customers can expect the same prices, same quality of product, and some degree of customer service, no matter where they ultimately make their purchase. While you can’t control the look and feel of another company’s website, you might try to negotiate a degree of control over your brand’s product descriptions, prices, and product support. These should be the same, no matter where someone bought your product.
- Only bite off what you can chew. If a business expands to more marketplaces than it can reasonably manage, it can fall behind on order fulfillment and customer service. It may be tempting to list your products on as many marketplaces as possible, but it’s wise to start with a limited scope and only expand once you’re confident you have the capacity to do so. Major brands like Amazon and Walmart have a massive customer base but very strict standards for order fulfillment that some small businesses cannot meet. Expand to these platforms after you hone your order fulfillment skills on your own website.
Multichannel selling can take a lot of effort, from platform compliance to customer service, but it lets you meet the needs of contemporary shoppers. You never know what will make someone finally click “buy”: It could be a web search, an endorsement from a social media influencer, or physically holding the product in a retail store. When you embrace multichannel selling, you open yourself to sales opportunities in all of these spaces, as well as many others. For this reason, many small business owners consider multichannel selling to be well worth the effort.