Defining a multichannel eCommerce strategy should challenge your business. It should challenge you. It requires you to ask some tough questions, and it requires that you answer them.
When defining your multichannel eCommerce strategy, consider these questions.
Where will you master your product data?
Almost every prospect, customer, industry analyst, etc. tells us the same thing: managing product data is one of the biggest problems for an eCommerce merchant.
Managing product data is one of our biggest problems.
– Pretty Much Every eCommerce Merchant
Without well-organized, properly-defined product data, merchants deal with all sorts of inefficiencies. It’s difficult to list products on different marketplaces with different category and attribute requirements. Items get published on webstores with product descriptions that aren’t SEO optimized. The result is product listings that are confusing, misleading, or lack the detail customers look for.
Before you can doing anything else, you have to sell products. And, you will struggle to sell products without a solid strategy for managing product data.
Therefore, you need to determine where you will master your product data and who will manage it.
Many eCommerce merchants master product data in their eCommerce platform (Magento, Shopify, etc.). This works fine when you only sell through your webstore, but it’s not best practice when it comes time to expand to Amazon or eBay or a brick & mortar store.
eCommerce platforms are built for one purpose: hosting a webstore. Your product data management tools are specific to an eCommerce site. Your webstore isn’t built for the complexities of other channels, unless you install a plugin. And, those plugins tend to be band-aid solutions to the bigger problem: your business is bigger and more complex than your webstore.
Other merchants master their products in their ERP system. While this can be more efficient in a multichannel context–you master data in one place for all your channels–it’s still not ideal.
An ERP system can store products, but it isn’t really built for defining a rich set of attributes and dynamic collections or for validating that product data. You have to implement custom properties and workflows. You have to execute manual processes to publish product listings.
Obviously, the experience of managing products in an ERP will vary from vendor to vendor. But, ERPs are not specifically built for the complexities of product data management.
Many other merchants wind up using Excel. It’s familiar. It’s (sort of) easy. It’s ubiquitous.
But, Excel is not acceptable for a high volume, ambitious multichannel eCommerce merchant. It requires a LOT of manual work, which means it’s inevitably error-prone. It also has no features whatsoever that are specific to product data. It’s just the accessible, default solution for merchants.
The best place for a multichannel eCommerce business to store product data is within a centralized product information management system. It gives you the “centralized” benefit of the ERP, but with tools specifically built for defining, cleaning, and publishing product data.
If you want to learn more, you can check out our Product Information Management solution. No matter what you choose, at least make it easy on yourself with some kind of dedicated PIM.
How will you handle orders from multiple channels?
If you only sell through eBay, you manage your orders in eBay. If you only sell through Shopify, you manage orders in Shopify. But, what happens when you sell through multiple channels at once?
You could keep managing orders in each separate channel. But, that gets complex as you add a third or fourth channel and beyond. What if you have 6 different webstores? What if you sell on 10 different marketplaces?
For every order, you need to be able to do the these things:
- Receive the order and send confirmation to the buyer.
- Pick, pack, and ship the order.
- Communicate order status (either or electronically or as someone asks for it).
- See a holistic view of outstanding orders.
- Calculate the value of outstanding orders.
- Pay supplier invoices for orders that are drop shipped.
- Manage backorders and stock-outs.
- Accept returns for orders.
Managing orders is complex enough. Why would you try to distribute that work across multiple channels that (may) give you tools to manage orders in different ways?
As you build out your multichannel eCommerce strategy, it will be critical that you think about how you are going to centralize order management. You could do it in an ERP. You could do it in some other system. But, you need to do it somewhere.
Order management processes should be consistent, no matter which channel generated that order. Centralizing orders is the only way to make them consistent.
How will your fulfill those orders?
One aspect of order management can be particularly tricky in a multichannel eCommerce business: order fulfillment.
If you’re an eCommerce business, your online will need to be shipped. That means you need to link your Pick, Pack, Ship processes with your different sales channels. Amazon needs to know when you’ve shipped the product; so does Magento; so does your customer.
Fulfilling orders yourself may be overwhelming–or it may just not be the most profitable use of your time. But if it’s not, you may want to elect to use a 3rd-party fulfillment service or drop ship orders from suppliers.
You can use a 3rd-party fulfillment service like Fulfillment by Amazon. You send and store your inventory with them. Then, one you make a sales, they take care of the entire fulfillment service for you. You won’t have to worry about managing shipping or getting the best shipping costs.
Another option is to drop ship. When you drop ship, you leverage the inventory of a supplier or manufacturer. You sell the item and send it to a vendor who fulfills the order. Then they invoice you for what the sent out. The vendor is invisible to your customer. Your company stays the brand–the one who interacts with the customer–but you don’t have to to worry about inventory or shipping.
You have to be careful when you drop ship. Without properly managing the financial and operational aspects of it, you can ruin your business. You also need to make sure that your drop shipping processes allow you to update order statuses in all your channels.
When you go to define your multichannel eCommerce strategy, consider how you plan to fulfill orders and what impact that will have on different channels. The forethought will be well worth your time.
Where will you centralize your customer data?
Your customer sees you as one brand. Even if they buy once from your eBay store, once from your website, and once from your retail store, you are still one “entity”.
To give the customer a consistent experience across all of your sales channels, you need to centralize the data about their purchases, their demographics, and any other data you collect about them. If your customer data remains fragmented across different systems, this will be reflected with an inconsistent (fragmented) customer experience.
Whether you choose to use a customer relationship management (CRM) platform, an ERP, or something else, you need to pick a customer data platform that is accessible by the technology driving all sales channels. It needs to be easy to digest, so any customer-facing employee can use the customer data. And, the data needs to be accurate.
This is the only way you’ll consistently deliver the same great customer experience across all your channels.
What about brick & mortar?
You might start out as an eCommerce merchant. You might expand to become a multichannel eCommerce merchant. You might make a lot of money doing it!
But, don’t forget that brick & mortar is still a huge opportunity.
Brick & mortar retail allows you to create completely immersive customer experiences, where they are literally surrounded by your brand. It allows you to sell products at the highest margins. It enables you to interact directly with your customer–with a handshake and eye contact. No eCommerce channel today offers that kind of experience.
That’s why many of today’s “darling” eCommerce brands testing brick & mortar strategies, for example:
And, there are many more.
Don’t lock yourself into being an “eCommerce only” brand. Evaluate whether there is an opportunity to expand to offline channels, like brick & mortar retail.
But, also know how that complicates your business.
Every challenge you have with multichannel eCommerce order, inventory, and product data management will extend to this whole offline channel that works much differently. Some of the challenges you’ll face are:
- Not selling the same stocked item on the website and in the store at the same time
- Integrating the online and offline brand experience
- Providing fulfillment options like “buy online, pick up in store”
- Accepting orders in the store that are fulfilled and shipped later
- Distributing inventory across multiple stores
Brick & mortar can certainly make your business harder to manage. But, if you address that channel opportunity thoughtfully, it can be a huge profit center for your business. Don’t forget the “old” model of retail, just because it isn’t shiny and new.
Answers to These Multichannel eCommerce Questions
We didn’t invent multichannel eCommerce. We didn’t decide that these were the critical questions that you should be asking. It’s what we hear from merchants every day. But, we did come up with good answers…
If you need help managing your product data, check out our product information managment solution.