As you read industry articles, blog posts, studies, etc. you see the same terms used over and over: channel, multichannel, and more recently, omnichannel. But what do these terms mean? Depending on the user, these definitions could be very different. Lets look at the word channel or sales channel in particular. The term can be defined in many different ways:
- Business dictionary.com defines it as A way of bringing products or services to market so that they can be purchased by consumers. A sales channel can be direct if it involves a business selling directly to its customers, or it can be indirect if an intermediary such as a retailer or dealer is involved in selling the product to customers.
- Within businesses, some refer to sales channels as buyer groups. These could be mobile shoppers, bricks-and-mortar shoppers, eCommerce shoppers, or to a wholesaler, it could be a retail buyer.
- Others define them by the devices used to make a purchase. A channel could be a website, call in, point of sale (POS) system, kiosk, smartphone or tablet. Sometimes these get even more granular. For example, website buyers could be separated by Windows or Mac or even further by browser (i.e. Chrome, Internet Explorer, Mozilla or Safari). Smartphone and tablet sales could be categorized by Android or iOS sales.
The definition itself isn’t as important as how it relates to the execution of a sales strategy. So lets take a closer look at what these strategies are.
Multichannel retailing vs. Omnichannel Retailing vs. Multichannel Management
Multichannel retailing A marketing strategy in which you offer multiple ways for shoppers to buy your product, which could include store, online, catalog, telephone, mail order, television, online marketplaces, etc. Retailers leverage the benefits of each unique channel to extend their reach, satisfy specific customer needs and increase revenue.
Omnichannel retailing A strategy similar to multi-channel retailing but with a strong focus on customer experience. Customers want to shop using multiple channels simultaneously but expect consistency while doing so. Omnichannel retailing requires seamless integration between all channels so shoppers can shop any way they want with the exact same results. With this strategy, retailers are able to gather more information about their buyers and tailor their marketing efforts to cater to specific buyer preferences.
Multichannel management (MCM) The process used to efficiently operate multiple sales channels with customer experience at its core. MCM encompasses systems integration, business process integration, data management and business intelligence. We will elaborate on this concept later.
Executing a multichannel strategy to get real results
At nChannel, we define channels as more than just buyer groups or devices but as selling conduits that include how people buy from you, the platforms that support each conduit, the data that flows through it, and the ability to use that data to make decisions. Some examples of selling conduits include:
- eCommerce This channel is your web store(s), the platform it is built on, item/inventory data that is uploaded to it, and the customer and sales data it generates.
- Marketplace Even though you dont own it, online marketplaces, the technology that runs them, the data you upload and the sales/customer data you collect is a channel.
- Point of sale systems If you operate a physical store, the bricks and mortar, your chosen platform and your sales database is a channel.
- Retailer To a wholesaler, retailers and their business systems are a conduit.
- Supplier Although you dont sell to a supplier, they are a channel because they are involved in how people buy from you, especially in drop ship situations. So the suppliers inventory systems and how they receive purchase orders matter.
Retailers have one goal: they are trying to make more money. One way to do that is to get more customers. More channels lead to more customers but only if the strategy is executed well. Being proactive and using the right technology to design, implement and run a multi-channel sales strategy can yield higher margins that contribute to the bottom line.
How MCM paves the way for multi- or omni-channel strategies
Multi- or omni-channel marketing strategies are attractive because they give you access to markets you might not been able to reach through a single channel strategy. Electronic sales channels in particular also provide valuable insight into customer shopping behavior. But to realize these benefits, the process must be implemented and managed well.
Multichannel management is a holistic approach that marries selling conduits with business processes to provide a superior shopping experience for buyers. As mentioned before, the building blocks of MCM are systems integration, business process integration, data management and business intelligence. With these pillars, retailers can execute on four critical tasks that will make their multichannel sales strategy a success:
- Integration Eliminate manual key entry and link systems through tight, two-way communications to avoid mistakes and enable near real-time operations.
- Order logistics Intelligently route sales transactions to the appropriate system or third-party (for 3PL or drop shipping).
- Item catalog and inventory management Electronically push up-to-date and consistent item and inventory data to each channel then dynamically update them as changes occur.
- Channel visibility Centralize all item, inventory, customer and order data in a single location for ultimate visibility. With this intelligence you can make insightful business decisions and provide immediate and reliable service to customers.
Retailers can define channels in whatever way best fits their business model. And they can choose a multichannel retailing strategy, omnichannel retailing strategy, or whatever strategy comes next. But to truly reap rewards by selling to multiple channels, it must be appropriately managed.
To learn more about the nChannel multimanagement platform, please watch this video: