What is multichannel ecommerce?

What is multichannel ecommerce?

Multichannel ecommerce is a retail strategy that allows businesses to sell their products online and offline at multiple touch points. It helps companies ensure their products are available on every channel their target audience may use.

As most people began using different channels to shop for products some years ago, retailers realized they must make their products available on relevant touchpoints. A multichannel strategy was the next step to ensure that the products were not only up for sale on the website but also on marketplaces such as Amazon, eBay, HC, etc., and social media while maintaining separation between the channels. With time, multichannel strategy began to make products available on mobile applications and certain third-party retailers as well.

However, multichannel is now considered outdated. Today, the advanced approach for omnichannel ecommerce is the preferred strategy. Unlike multichannel, omnichannel seamlessly integrates all sales channels in real-time, offering a unified and customer-centric shopping experience. As consumer expectations evolve, omnichannel provides the consistency and fluidity that modern shoppers demand, making it the future of retail.

How multichannel ecommerce works

Multichannel ecommerce is a complex strategy that allows retailers to sell their products on multiple touch points. This includes both online and offline platforms, but in the case of ecommerce stores, it is mainly limited to online touch points. This helps businesses to reach a broader audience and maximize their sales.

To begin with, a multichannel ecommerce strategy requires retailers to identify their target touchpoints. Next, they must set up mobile apps, such as Amazon or Instagram platforms. Usually, most retailers will choose multiple touchpoints to maximize their reach. After listing their products, retailers set up inventory management tools to align with their multichannel strategy. This helps ensure there are no issues regarding stock outs or understocking.

Once everything is set up, a multichannel platform allows retailers to display their products, process payments, and fulfill orders on different touchpoints separately. However, the customer experience differs vastly depending on the touchpoint where they purchase products.

Moreover, retailers have to develop separate marketing campaigns for each touchpoint to connect with their customers efficiently. A multichannel platform generates separate insights using data from each other of the chosen platforms so that retailers can further enhance their selling strategy. Finally, each platform requires its own customer support strategy as data is usually not shared between different touchpoints. From a retailer's perspective, multichannel ecommerce used to be a good option for making products on all relevant touchpoints. However, from a customer's point of view, multichannel strategies lacks seamlessness and frictionless experiences.

Multichannel ecommerce vs. omnichannel ecommerce

While multichannel ecommerce focuses on making products available to customers on every platform they most often use, omnichannel commerce goes many steps ahead. It puts the customers' needs and desires at the top of the priority list and ensures a seamless and frictionless buying experience.

Omnichannel shopping experience requires that regardless of which platform a customer begins his buying journey, he can also complete it on his chosen platform. Unlike multichannel ecommerce, which restricts the buying journey to a single platform, omnichannel commerce seamlessly shares data across platforms and updates in real time thanks to centralized data servers. Thus, customers and staff can enjoy a frictionless buying and selling experience.

The pros and cons of multichannel commerce

Retail commerce solutions have followed a linear trajectory — from the adoption of legacy platforms that helped brick-and-mortar stores go online to slightly evolved platforms that could also process payments. Eventually, businesses realized the need to make their products available on multiple platforms, giving rise to multichannel commerce.

However, multichannel commerce, while offering certain benefits, has struggled to keep pace with modern customer expectations, personalized shopping experiences, and seamless backend operations. As a result, it is increasingly being replaced by more advanced solutions that better meet the demands of today's retail environment.

Here are the pros and cons of multichannel commerce:

Pros of multichannel ecommerce for retailers

Expanded customer reach

Many retailers switched over to multichannel platforms from legacy strategies to make their products available on multiple sales channels. As selling products only at physical or online stores did not generate the sales that retailers want, multichannel platforms seemed like a good idea initially. For instance, it immediately allowed retailers to make their products available on mobile interfaces, social media, and third-party marketplaces. For a while, this strategy helped retailers reach a broader target audience and scale their operations across geographical areas, albeit with limitations.

Brand awareness

Brick-and-mortar stores faced a lot of difficulties while making the switch to ecommerce platforms from legacy methods. Both online and brick-and-mortar stores found it difficult to generate the buzz that's required to create a stable brand awareness. Some of the challenges that many retailers still face include stiff competition, evolving technologies, and changing customer expectations. For those who made the switch from legacy tools to multichannel ecommerce, the results were quite apparent – they could now create separate but similar brand awareness campaigns on different platforms such as LinkedIn, Instagram, mobile applications, and legacy websites. However, as data is not shared between these touchpoints, those who use multichannel ecommerce have to expend additional resources to get their message across.

Access to customer data

Multichannel ecommerce platforms are equipped with analytical tools that process data collected via different touchpoints. This helps retailers understand customer behavior, purchase patterns, and product preferences based on historical and real-time interactions. However, there is a caveat. Retailers may find it difficult to synthesize customer data as multichannel platforms are unable to create unified customer profiles.

Cons of multichannel ecommerce for retailers

Poor order fulfillment

Although multichannel ecommerce helps retailers expand their customer reach and scale up without investing much money in infrastructure such as warehouses and distribution centers, order fulfillment is often not satisfactory. It is impossible to provide a seamless shopping experience as each platform behaves differently. Due to a lag in data updates, orders may not be fulfilled efficiently. Siloed data also results in poor customer service and inefficient inventory management, delayed response time, and an inability to integrate with other tools the door is centrally operated, such as retail ERP. All these factors lead to poor order fulfillment.

Poor support for large scale operations

While multichannel ecommerce strategy helps retailers to expand their market and sell their products to a global audience, it does not do so gracefully. Orders can get mixed up, certain touchpoints may not be accessible across different countries, and information will not be synced seamlessly. This creates problems for large-scale ecommerce operations that span geographical boundaries. As a result, international customers may have to rely on customer support to resolve problems.

Product returns aren't seamless

It's true that multichannel ecommerce lets customers purchase on different touchpoints. However, they cannot return them easily. Payments and refunds may not be set up across platforms as a result of siloed data. For example, those who purchase in-store will probably have to walk to the same store in order to return the product. These factors can lead to disappointments, reduced repeat customer rate, and delays in refund processing.

Siloed and inaccurate data

The biggest challenge that multichannel ecommerce tools pose is siloed data. As multichannel platforms do not share data between different touchpoints and channels, the shopping experience can be disjointed and filled with friction-inducing experiences. Although some multichannel tools may incorporate predictive analytics and AI, insights are not usually accurate as data is not shared across touchpoints in real-time.

Loss of productivity and increased expenses

Even employees may struggle to remain productive if they handle multiple platforms. A multichannel platform cannot synchronize data in real-time between different channels and becomes more complex when you try to scale up. If you have multiple warehouses, this can prove to be a significant challenge to your staff. It makes every process labor-intensive, although a software solution is expected to do the opposite. Inefficient integrations, increased manual processes, and additional steps results in increased operational costs as well.

Inefficient loyalty programs

A multichannel strategy may help you to an extent to implement loyalty programs and create campaigns that resonate with your audience. However, customers will not have a consistent experience across channels. Redeeming reward points, accessing personal and purchase history, etc., can all prove to be inconvenient due to data being locked in silos. It's important to remember that younger customers in particular expect a hyper-personalized shopping experience. Unfortunately, multichannel ecommerce may not be the right choice to create personalized shopping experiences.

Implementing a multichannel ecommerce strategy

Identify your goals

Multichannel ecommerce platforms work best for those who like to separate their marketing strategies across platforms. For example, some retailers prefer to sell certain kinds of products on our website, while choosing to sell the rest of them on social media or in stores. If your marketing strategy is deliberately disjointed, multichannel shopping platforms are a good option. However, an omnichannel solution not only does this, but also helps you deliver a seamless shopping experience across platforms if you so wish.

Pick your sales channels

A multichannel marketing solution allows you to sell your products on different platforms. However, your customers may only use some of the available platforms to purchase your products. You may only need to invest your time and resources in a few platforms depending on the demographic attributes of your customers. For example, if your target audience is Gen Z, you may only need to focus on TikTok, Instagram, and mobile apps. Unfortunately, market and sociodemographic trends are volatile, and you can't set up a multichannel strategy and forget about it. An omnichannel strategy prepares you for a volatile market more efficiently.

Identify necessary integrations

A multichannel platform will not function appropriately unless integrated with other enterprise software solutions. Consequently, you have to ensure that it is integrated with third party apps such as ERP, warehouse management solution, and different POS systems. However, do bear in mind that you may end up with multiple copies of data that are not synced.

Make sure branding is consistent across channels

Multichannel tools do not sync data across channels. As a result, it may take a lot of work to run synchronized marketing campaigns and branding narratives. You will need to put in extra effort to ensure that customers get to view the same information on all chosen platforms. Otherwise, they will have a disjointed experience, which may not work in your favor.

Ensure uniformity of customer service

A multichannel platform is a suitable way to provide customer service across touchpoints. However, as data is siloed, customer service agents may not have access to the same information on different platforms. Customers may have to repeat their queries or concerns whenever they contact support agents on other platforms. You may have to use an additional CRM integrated across platforms to ensure uniformity.

Moving from a multichannel strategy to omnichannel

While this strategy offered benefits in the past, it's important to note that multichannel ecommerce treats each channel as a separate entity, which leads to inconsistencies in customer experience and operational inefficiencies. This has now paved the way for a more integrated omnichannel approach which we see today.

Relying on legacy or multichannel ecommerce strategies often leads to siloed data and a fragmented shopping experience, causing friction for customers. To provide a seamless and synchronized shopping journey, it's essential to transition to a centralized omnichannel solution that updates data across platforms in real time to deliver a synchronized shopping experience.

How Priority Software can help

Priority Software offers a centrally managed holistic omnichannel retail solution. allowing you to run campaigns and sales strategies that meet your unique needs.

Priority Software can help you transition smoothly from multichannel to a more intuitive and future-ready strategy. Contact us today to learn more.