Multichannel logistics distribution or retailing is prevailing in the logistics world due to the shift in consumer buying patterns. Having a multi-channel strategy impacts the supply chain of the business directly. Moreover, it produces different concerns for the suppliers and the retailers.
For suppliers, forecast accuracy, cutting operating costs, and inventory control are the concerns. For retailers, decreasing inventory stock while relying on on-shelf availability and boosting the multi-channel capacity are primary concerns.
In this digital world, buyers are searching and purchasing online more often. With businesses going digital comes greater expectations about the pick-up options, payment methods, and delivery time. Thus, retailers are constantly doing efforts for a flawless customer experience regardless of the order size, purchasing channel, and delivery choice.
Multichannel VS Omnichannel Strategy
A usual multi-channel retailer has both a brick-and-mortar store and a website. You can separate these two channels in a multi-channel strategy. Contrary, in omnichannel retail, both online and physical operations are integrated. Although both multichannel and omnichannel involve a selling process across various online and real-time physical channels the key difference is the consumer experience across these channels.
Retail logistics in the transition from multi-channel to omnichannel
In a traditional multi-channel strategy, physical stores have a separate stock, and the websites have their own stock. Therefore, you can return the items purchased online through an online platform. The same goes for physical store purchases. Hence, customers’ online interaction is separate from offline interaction. Simply put, offline and online channels are considered different businesses. However, this could be frustrating and confusing for the customers regardless of the seamless online and physical customer experience.
On the contrary, the omnichannel strategy joins the touch points of the customers together. Thereby, whichever channel (online or physical) they choose, they will get a consistent and satisfying experience. This is why a lot of retailers are moving to omnichannel strategy because the traditional multichannel strategy comes with a few challenges, that are:
- Inventory management
Inventory management can be a big challenge for most business owners when they start multichannel distribution. The challenges that come with inventory management include:
- Overselling and overstocking.
- Managing inventory manually keeps you from scaling.
- Keeping track of orders, and inventory across the warehouses and suppliers.
- Not able to track and understand inventory and customer data.
All of these challenges are easy to overcome if you are prepared and have a robust strategy.
- Keeping cross-channel messages and branding consistent
When you are managing multi-channel distribution, you have to keep the branding and messaging the same across different channels; even when these channels have different nuances, requirements and practices.
- Managing customer experience
When you start selling on places such as eBay, Alibaba, Amazon, or Facebook, nurturing your relationship with the customers can be challenging. After all, your customer comes first. So, what does it mean? It means making them feel valued and selling high-quality items, offering 24/7 support, and creating a great experience for them.
- Shipping and returns
When selling products on more than one marketplace, shipping can be a challenge for many eCommerce business owners. Managing orders through one website is easy. But, when you start expanding on different channels, it becomes complex. More channels mean you are ready to scale. If you’re not, you are at the risk of damaging your brand image, ruining customer relationships, and losing out on potential sales.
- Growing threats
You must be prepared to encounter some more growing pains when you decide to scale and start selling on new channels. These pains may include:
- You are overwhelmed and can’t seem to manage bigger growth initiatives. This means you need a bigger team now.
- Keeping the product quality intact. Scaling up means more pressure and more demand. Meeting these demands may impact product quality. So, make sure you don’t lose out on the quality.
- Keeping your website from slowing down. When you scale, it is customary to get more traffic. So, ensure you have the bandwidth that enables more traffic. Remember, even a couple of seconds of slow page speed can impact your sales negatively. It is also a great idea to hire a web developer who ensures the website is running smoothly.
All of these challenges are fairly common to face a retailer who is scaling up and using a multichannel strategy. But, with good planning and teamwork, they can be overcome easily.
The Bottom Line
Remember, the key to being successful with the multichannel strategy is to understand and plan for all the challenges you think you can face when scaling your operations. If you put strategies in place and be practical, no one can stop you from creating a profitable business that is sustainable.