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    Success with multichannel retailing

    I was asked by a retailer client recently whether they should go omnichannel with their business.

    First up though, omnichannel probably isn’t the right word. Omni means all, so being omnichannel means being on all channels. That’s not likely to even be a possibility for any retailer since there are over 800 different marketplaces globally today. Nor is being everywhere necessarily a commercially viable or sensible strategy.

    What is smart though is being on multiple channels, or multichannel.

    It may sound like I’m splitting hairs, but I think the word omnichannel should die a natural death.

    So what does multichannel mean?  

    What channels are we talking about?

    Let’s just focus on retailers. These days manufacturers, franchises, importers and distributors can all be multichannel, and many of them are going digital to reach extended audiences across both B2C and B2B.  But the majority of merchants and vendors for which multichannel is relevant are more likely to be retailers. So what does it mean to be multichannel?

    It usually means headaches, confusion, frustration, conflict, more work, more stress.  Sound attractive so far?  

    Being a multichannel retailer simply means you’re accepting purchases from customers across several different channels. For example the customer experience (and your experience as a retailer) is completely different in a physical store compared to selling online. The costs are different. How you display the products is different. How you interact with customers is different. What type of customers shop with you differs online to offline.  

    So online and offline are two channels that require separate planning, resources and operations to run.

    When it comes to online though, there are lots of channels to pick from. You can operate your own webstore. Some retailers I’ve worked with have multiple webstores, especially in cases where they have their own brands and run a separate webstore for that brand, and sell the same products on both. Without going into the pros and cons of that strategy, in the right circumstances it works really well.

    Social media is another area where there are many channels you can participate in.  Most social media channels are mostly non-transactional in their own right, but will refer customers to your webstore either through paid advertising, shoppable links and storefronts, or from your own posted feed content.

    Probably the biggest number of channels online is with marketplaces.

    What’s a marketplace? 

    Well, for starters we all know what eBay and Amazon are. As a retailer you can register a seller account with them and list your products. Customers shopping on those marketplaces hopefully find your listings and decide to buy. You fulfil the order and the marketplace sends you the sale proceeds less their commissions which vary depending on a whole bunch of things.

    There’s currently around 50 marketplaces operating in Australia now, which is a lot, considering just 7 years ago, eBay was the only real marketplace here.  

    But not all marketplaces are the same. If I name business such as Woolworths, Bunnings, Myer and Harvey Norman, you would probably be thinking of them as physical retail shops that you have been to and bought from. Yes, they are retailers, big retailers, with loads of experience in customer psychology, presentation, marketing, communications and customer service. But today they’re all marketplaces too.  

    Howcome?  Well all the products they stock in their physical stores are also available on their webstore. Then they’ve approved other selected smaller retailers to list their products on the webstore as well.

    Why would they do this?  

    Actually it’s quite ingenious.

    It means their customers get to shop a much bigger range of products than they can physically fit in their shops and warehouses. They might not make the same profit margins as selling their own products, but the commission they charge on the sale of seller-listed products is money they wouldn’t have made otherwise. They also don’t have to wear the cost and risk of holding and handling all those extra products in their warehouse. So they can afford to make a lower return on sales of third-party listed products, because they don’t have most of the costs usually associated with managing their own inventory.

    So how does a smaller retailer manage multiple sales channels efficiently?

    Each channel has its own unique requirements, compliance, reach, costs and processes. That’s why effective marketplace services focus on helping you  standardise both product information, prices and processes to make things easier for you and your staff, and also to reduce the risk of errors. The more exceptions there are to deal with, the more effort and time is required to attend to them, and the more costly it becomes to operate and maintain those channels.  

    It’s also smart business to plan and prepare for any business activity, rather than be forced to review and adjust things after they’ve gone wrong.  So doing your research on the minimum compliance requirements of each channel or marketplace is crucial.  

    Once you’ve identified the minimum requirements for product data, descriptions, titles, images, attributes or specifics, and category mapping, then it makes sense to optimise all of your product data to meet or exceed those requirements.  It might end up taking substantial time and effort investment to standardise your product data and images to a consistent minimum standard, but it will save you bucket-loads in future.  Optimising your product data is a lot better than having to constantly deal with rejections, errors, payment holds and suspensions as a result of non-compliance with marketplace policies and standards.  

    In my view, it’s sheer madness to manage listings on multiple marketplaces directly on those marketplace platforms themselves.  The seller interfaces and settings are all different. The messages are all isolated, and sales disconnected.  All you’re doing is creating more work and stress for yourself without any financial upside.  Its hard enough getting sales in the first place no matter where you’re offering your products for sale, so don’t go wasting your hard-earned profit on unnecessary time and effort trying to juggle multiple systems, dashboards and processes.  It’s a bit like trying to dog-paddle in an Olympic swimming event and blaming everybody else because you came last.

    Technology allows you to be much smarter today, so use it.  You’re best to only participate in channels and marketplaces that will integrate seamlessly into your ecommerce or ERP platform so your stock quantities are continuously synced across all channels, and all your orders flow into a single dashboard for fulfilment.

    I’m not going to list all the platforms that exist with this capability, but just be aware they don’t all do the same thing, they won’t all integrate with every marketplace, and will vary in how efficiently they allow you to keep track of inventory, process orders and deal with pre and post sale customer issues.

    Remember CHEAPEST and BEST are two words that cannot coexist.  CHEAPEST will usually be worst, and BEST might be out of your budget, so the reality is you will be best served by a technology solution that saves you TIME (which you can measure in dollar terms based on the value of your own time and the cost of staff with all the associated overheads), a solution that eliminates or at least dramatically reduces the risk of human ERROR (rules-based and bulk automations are precisely what you should be looking for), and a solution that is well supported (because you’re going to need that support eventually).

    Remember too that TIME and MONEY are inversely proportional to each other.  Whichever you have less of, you’re going to need to invest more of the other to achieve the result you want. When you’re starting out in business, you’re more likely to have a lower budget, so you will need to be prepared to invest a bunch more time and effort researching, following up providers that contribute to your business, and attending to marketplace errors, communications and administration. This really can become quite overwhelming, especially in the early stages of participation with a marketplace as you’re still figuring out how they work and what you need to do to get sales through them.

    Don’t be afraid to outsource some aspects of the business or get training or consulting from experts who have done it themselves. It can be a really smart use of limited funds and can shortcut your pathway to success to be leaning on an agency or experts that has proven experience supporting the channels you are selling through

    That’s where ZELLIS Outsourcing comes in.

    After years of hearing complaints from our clients about the tedious, time-consuming and often frustrating task of sourcing, curating and optimising product data for their ecommerce channels, webstores and marketplaces, we launched ZELLIS Flex to address it. This has dramatically simplified the process of data preparation for ecommerce, made it cost-effective and supported much faster go-to-market.  Time is money, so being able to move faster means more opportunities for revenue and profit sooner.

     

    BRANDING

    Another thing I want to highlight about running a successful multichannel business is consistency of branding and customer experience across all channels. Whilst most marketplaces today won’t allow you to brand your listings on their website, your customer experience should still be as uniform as you can make it. Use the same business name and usernames across all channels if you can.  Use the same product descriptions and photos, offer the same returns policy on all channels, have the same prices on all channels.  

    Consistency is the foundation of trust. Customers only spend money online when they trust – when they feel confident that what they’re seeing on the screen is exactly what they’re going to get. What they see is an expectation, which you can and should be influencing as much as possible, so there are no unpleasant surprises throughout the entire process from shopping right through to receiving, unboxing and using the product.  

    Beyond how your products and your business is presented across online channels, you can control the packaging, dispatch times, communications and of course the warranty and returns processes. The quicker you can respond, the more generous you can be, the more human and reassuring you can be, and the more efficient you can be when dealing with the entire post-sale experience, the more the customer’s trust in you will be validated and strengthened. The more confident and valued a customer feels, the more willing they are to deal with you again.

    IS IT WORTH IT?

    Is being multichannel really worth all that effort? I think so yes.  But it’s not a walk in the park. I always advise merchants to tackle one marketplace at a time. Each marketplace has its own way of doing things, and it’s a recipe for confusion and possible disaster if you try to launch on multiple marketplaces all at once.  

    If you…

    • Do your research well on each marketplace before you start,
    • Ensure you have robust technology in place that will integrate seamlessly with each channel you want to sell on,
    • Ensure your product data and images are properly optimised and mapped, and
    • Apply consistent processes, polices, presentation and branding across all channels (as much as you have control over it),

    Then you’ll be able to build a sustainable and profitable multichannel business.

    Good luck!

     

    by Tim Davies, CEO, ZELLIS