Retail business owners are resilient, but many are scrambling to adapt in the face of the series of challenges brought on by the coronavirus pandemic. For a retail business, selling equals survival. So why not increase opportunities for sales by selling in multiple marketplaces, not just your own online store?
Let me explain — It may sound overwhelming, but selling your wares in multiple marketplaces has quickly become the norm in online retail marketing, and it actually doesn’t need to be complicated.
What we’re talking about here is “multichannel retail” — the process of selling on more than one online marketplace. As the coronavirus (COVID-19) crisis continues to affect small businesses, many are exploring new sales channels.
Multichannel retail allows for increased sales by putting your products in front of more customers — and best of all, you can still manage sales, inventory, and all other aspects of selling on these various channels in one place.
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That’s the appeal of multichannel retail, but in practice, it goes a lot deeper than that. Let’s look at the advantages of multichannel retail and how you can use it yourself.
But first, what is multichannel retail exactly?
What is multichannel retail?
Each online marketplace or ecommerce website is considered a “sales channel.” Amazon is considered a sales channel, for example. If you’ve built your own online store, that’s a different sales channel. Multichannel retail is simply selling on more than one of these types of channels.
Back when the internet was young, a brand might have only sold on their own website exclusively, but nowadays you see the same brands selling on Amazon, eBay, Etsy — on top of their own branded websites. Big brands almost always opt for multichannel retail, with the exception of brands that benefit from exclusivity, such as fashion lines.
What about small and medium-sized businesses that don’t have all the resources of large enterprises, though? How can these businesses expand to multiple sales channels on their own? With modern technology, it’s much easier to set up new accounts and sell, so multichannel retail is practical for any online retailer with the time to research and break into new markets.
But why bother? There are tons of advantages to multichannel retail over single-channel, some of which are industry game-changers.
What are the advantages of multichannel retail?
Here are the five main reasons to sell on more than one online sales channel.
1. Engage new markets and customers
This is no doubt the biggest advantage of multichannel retail, and reason alone to implement it. New channels mean new customers, so the more channels you have, the more customers you can reach.
Customers have their own preferences for online channels. For example, a lot of Amazon shoppers pay for Prime shipping because they like the convenience of expedited shipping. Those customers may never venture outside of Amazon because they don’t want to wait for long deliveries, so unless you’re on Amazon, they’ll never find your products.
There are also niche channels that cater to a certain type of customer. Etsy is a great example of a niche channel. It’s the ideal marketplace for crafts and homemade products. If you’d like to break into that market, it’s easier to build a following on Etsy first than to attract these customers one-by-one to your own website.
And then, there’s the fact that these big sales channels already have a built-in audience. They have thousands or millions of unique visitors per day — compare that to how many unique visitors your website gets. It’s easier to go where your customers are than to convince them to come to you.
2. Brand recognition
Branding works by exposure: the more people see your brand, the more likely they are to remember you. For many startup brands, getting your name out there is one of the biggest challenges. In that sense, having a presence on different ecommerce sites is free advertising.
Even if shoppers don’t buy from you, the fact they get to see your name, products, and logos leaves a lasting impression. They’ll start to remember your brand after seeing it for the second, third, or fourth time, especially on different sites. You can build off that in a positive way, if you follow the right branding principles.
Moreover, if the same customer sees your brand on different sites, that speaks highly of your brand. Having a presence on different sites suggests you’re successful enough to expand, or have so much demand that you need more than one page to satisfy need.
3. Diversify markets
Because certain channels cater to niche markets, you can use multichannel strategies to diversify your business and protect yourself in unstable financial times. It’s the business equivalent of not putting all your eggs in one basket.
It’s also a safeguard in case one of those marketplaces staggers or changes their target audience, for whatever reason. Just look at the Facebook marketplace — had it launched 10 years ago, it might have seemed like a mainstream challenger to an Amazon or eBay, but now with Facebook losing all of its young members, it’s becoming more of a niche market for 40+ crowds. If you were targeting young markets and only sold your products on the Facebook marketplace, you’d be out of luck.
4. High return on investment
One of the best reasons to invest in multichannel retail is that there’s really no reason not too. Most ecommerce channels allow you to open up accounts and sell for free at a smaller scale, charging only a commission. The ones that do charge for accounts, it’s usually for more advanced selling options that you might not need yet. You usually don’t have to invest much to test a new channel, so it’s pretty much all profit.
The real cost is time: setting up an account on more than one site, researching the best strategies on that site, and maintaining inventory and sales from all the sites. And if your multichannel strategy is successful, you’ll also have to deal with fulfilling more orders — one of the best problems you can have.
However, there are convenient ways to handle the extra work as well, such as inventory management software, which we’ll talk about below. You could also start small and list a couple of products for sale before you dive in head first. The point is, if you’re serious about improving your ecommerce brand, expanding into new channels is both profitable and manageable.
5. Experiment with new products
Lastly, you may not want to introduce an experimental new product to your branded ecommerce store. In this case, you can test the product on a different channel to see how it sells, especially if it receives more traffic than your own webstore. You can really get a good reading on how much interest there is for it before going all-in. If people buy it, you can add it to your central store, and if not, no harm done.
New channels can offer sales data to help you hone your strategies, not just with products but with customer types, promotions, advertisements, and sales policies as well. You can play around more with secondary sales channels because they’re not your main source of income, testing out and refining new ideas before they’re ready for the “center stage.”
Get started with multichannel retail marketing — the easy way
The downside to multichannel selling is more work, specifically order and inventory management. It’s not only more sales to fulfill, but also more product pages to maintain and more promotional campaigns to manage. The good news is that these problems are all easy to solve… with the right tools.
Inventory management software like Ecomdash by Constant Contact takes care of almost all of the additional hassles that crop up with multichannel selling. Think of it as your new automated employee — handling listings, shipping, inventory and more across over 50 platforms, so you can focus on growing your brand.
One of its greatest assets is automatically updating your stock levels on all your channels every time you make a sale. With multichannel selling, it can be hard to update your stock levels on each channel, and you risk overselling (and the bad reviews that come from it) if you don’t get your “out-of-stock” message up in time.
The right software helps eliminate that risk by updating your product pages on each channel in near real-time, ensuring you have the correct information at all times.
Additionally, you can track all your shipments in one place, no matter what channel they were purchased from or which of your warehouses it shipped from. You can also set custom alerts and group items as kits or bundles. When dealing with lots of tedious tasks, it pays to have an automated service to save you time.
More channels for more sales
With five compelling reasons to try and a couple tips to get you started, you’re ready to start selling on more channels, which means more revenue for your small business.
Just remember that setting up new channels is just the beginning. You still need an amazing marketing strategy to attract shoppers and entice them to buy. Master those techniques with The Download, our free, all-encompassing, all-inclusive guide to online marketing for retail.
And for some extra guidance during these uncertain times, take a look at our COVID-19 Small Business Support Kit.