Multichannel is the latest buzzword in the retail arena, with the rise of eBay and Amazon providing lucrative new channels for retailers to raise brand awareness and increase revenue. But with an increase in the number of platforms – each requiring time dedicated to management, is multichannel worth the investment and how can smaller retailers approach this successfully?
By Keith Bird, chief executive, eSellerPro
The dawn of social media and the always on, always connected nature of smartphones means the customer-retailer dynamic has changed for good.
As consumers we’ve become more discerning than ever. We want access to products and services at the right price, when and where we want them, and for retailers that means creating and maintaining a multichannel presence across all available platforms – including eBay and Amazon.
In fact eBay and Amazon should be an important part of any online retailer’s strategy and can play a vital role in increasing revenue.
Last year eBay announced a 25 per cent rise in the number of million pound businesses on its site, signifying the fourth year of consecutive growth in the number of eBay SME millionaires.
What’s more impressive is that many of these eBay Powersellers, started out simply selling from home and have gone on to develop successful and lucrative ecommerce businesses.
It is not surprising that many retailers are turning to the likes of eBay and Amazon to increase sales.
Not only do they provide the perfect platform for launching and developing an online retail business without large sums of capital, but the low entry costs and broad support mechanisms offered by these channels leave budding retailers with minimal risks and a host of opportunities to reach millions of potential customers.
In fact, if retailers are to succeed in selling via the Internet then it is vital they have a footprint across all major platforms. Many SME’s are now turning over more money online than offline, with mCommerce also emerging as an important platform to drive sales.
Therefore, no retailer, no matter what size, can afford to ignore multichannel, and any retailer that does runs the risk of potentially missing out on the tens of billions spent online each year.
Whilst implementing a multichannel strategy may appear a daunting task to smaller retailers, it is a natural extension of retailers existing operations and is far easier to set up and manage than it might first seem.
Essentially multichannel retailing is about focusing on the customer – and what the consumer wants is convenience, selection, value and accessibility. However in reality, achieving this balance is not easy.
One of the biggest challenges that SME’s and entrepreneurs face is the struggle of maintaining high quality service, whilst managing their selling operations across a range of channels.
With a range of tasks including stock and inventory management, invoicing and delivery, smaller retailers often do not have the resources to manage these themselves.
Speaking recently to Adrian Hodge, Managing Director of online discount retailer, XS-Stock Ltd, he described how one of the biggest challenges they faced when implementing an online multichannel strategy was the increase in demand and inventory management.
“Whilst moving to multiple platforms no doubt opened up more sales opportunities, the more we branched out into multiple channels, the harder it became to manage and we ended up overselling stock, subsequently delivering a bad customer experience,” he commented.
As well as challenges with inventory management, managing multiple platforms can also be an extremely time-consuming task for smaller retailers.
Andrew Redstone, Company Manager at online equestrian specialist Gridstop Ltd, has first-hand experience of managing multi-channel platforms with limited resources.
“When we first moved to multi-channel, managing routine tasks took over an immense amount of time so that it became impossible to focus on areas such as marketing or sales to grow the business. The only way to combat this was by taking on more staff which would have cost a huge amount of money; therefore an ecommerce system was vital to remain successful.”
By putting in place smart technology that simplifies the entire online sales process, including mobile selling, retailers can simplify and automate tasks, leaving them free to concentrate on what really matters – growing the business.
As well as improving the running of the business these new smart technologies can also help online retailers seamlessly scale up operations by introducing and then managing inventory across multiple retail channels such as eBay and Amazon.
Without a doubt, there are huge profits to be made from online retail and unlike many other sectors, the SME or single entrepreneur with the right tools in ecommerce really can compete with the leading players.
The future of a successful retail business lies with those who can create and an integrated and holistic retail experience and those that embrace multichannel will not only reap the benefits, but will secure the loyalty of customers for the future.
What is clear is that we are heading towards a converged landscape when it comes to retailing. There is only one ‘commerce’ – and you can expect to see the phrase ‘x-commerce’ becoming increasingly common.
Platform and channel are largely going to become irrelevant to the buyer within the next few years and all online retailers need to take a long look at how multichannel selling can benefit their business. Who knows the next business to join the eBay millionaire club could be you!