Businesses that leverage omnichannel (multichannel ecommerce) experience an almost 250% increase in overall customer purchase frequency compared to those reliant on a single channel. However, many ecommerce ventures initially focused on just one channel due to resource limitations during their inception.
While this approach provides a lot of advantages, it also comes with a fair share of unwanted risks. While starting with a single channel is advantageous, as a business expands, over-reliance on one channel becomes a vulnerability.
Every channel caters to a specific audience demographic and size. To scale and broaden the customer base, diversifying across multiple sales channels becomes a wise and sometimes the only choice. Just like you diversify your funds in a stock market, you have to do the same in this case as well to ensure a better success rate.
Selecting among various channels involves weighing their individual merits and shortcomings. Each option presents unique opportunities and challenges.
Understanding Ecommerce Marketplaces
An ecommerce marketplace is essentially a hub where business owners can showcase and sell their products or services. Think of it as an online bazaar, where instead of setting up an elaborate stall, you have listings and store pages to exhibit your wares. For ex. Amazon.
These marketplaces boast an extensive array of products, catering to various businesses and niches. One of their most alluring aspects is the immediate access they offer to a vast pool of customers. This makes launching an online business on a marketplace far more straightforward than starting your own website from scratch.
However, there’s a catch: while you tap into their customer base, the marketplace retains ownership of these customers. This limits your ability to cultivate a dedicated fanbase directly. Plus, there’s the issue of commission fees, typically ranging from 5% to 25% of the sales price, eating into your profits.
Most people start their ecommerce journey through platforms like Amazon and Etsy and then eventually transition to a website or a wholesale channel. The ease and speed of setting up a shop on a marketplace leverage the existing customer base and infrastructure with undeniable advantages.
Major Marketplaces that You Can Consider for Your Multichannel Ecommerce Venture
A global giant operating in numerous countries, boasting a colossal customer base exceeding 350 million. Its versatility allows sellers to peddle almost any product.
- Global Reach: Active in multiple countries with over 350 million customers worldwide.
- Product Range: Sellers can offer almost any product, from electronics to books to home goods.
- Support for Sellers: Provides fulfillment services (FBA), advertising tools, and data analytics.
- Scalability: Suitable for businesses of all sizes, from small entrepreneurs to large corporations.
- Marketplace Dynamics: Offers a competitive environment with a variety of seller tools for growth and visibility.
Initially an auction site, eBay has evolved into a vast ecommerce hub accommodating a wide array of products.
- Auction & Fixed-Price Listings: Evolved from an auction site to a flexible marketplace with both bidding and fixed-price options.
- Diverse Product Range: Sellers can offer new, used, and collectible items across categories such as electronics, fashion, and more.
- Global Audience: Connects millions of buyers and sellers worldwide.
- Seller Tools: Provides inventory management, promotion tools, and performance analytics.
- Flexibility: Ideal for individual sellers and businesses looking for a versatile platform.
Tailored for handmade, vintage, and craft items, catering specifically to artisans and creators.
- Niche Focus: Specializes in handmade, vintage, and craft items.
- Creative Community: Tailored for artisans and creators to sell unique, customized products.
- Global Audience: Connects sellers with buyers seeking one-of-a-kind items.
- Seller Tools: Offers tools for shop management, promotion, and customer engagement.
- Support for Small Businesses: Perfect for independent creators and entrepreneurs in the creative industries.
The retail behemoth offers a platform that’s attracting international sellers, potentially opening doors to in-store selling opportunities.
- Retail Giant: Leverages Walmart’s global brand and vast customer base.
- Diverse Product Categories: Allows third-party sellers to offer a wide range of products, from electronics to clothing.
- Potential for In-Store Sales: Sellers may also have opportunities to sell products in Walmart’s physical stores.
- Global Seller Access: Attracts international sellers, expanding its ecommerce presence.
- Comprehensive Seller Tools: Includes tools for product management, marketing, and order fulfillment.
Three Primary Ways in Which the Ecommerce Business Organize Their Sales Channel
- Single sales channel
This involves utilizing one single method for product sales. For instance, an Amazon FBA Private Label business exclusively sells on Amazon without branching out to other platforms.
- Multichannel
Businesses adopt multiple separate channels for selling their products. An example is an ecommerce enterprise selling across various marketplaces, physical stores, and the brand’s ecommerce website. Although these channels operate independently, they collectively contribute to the brand’s visibility and sales.
- Omnichannel
An extension of the multichannel approach, the omnichannel model integrates all diverse channels to create a seamless customer experience. Regardless of the shopping platform, customers should encounter a consistent experience. Critical business functions such as inventory and order management are interconnected through an omnichannel commerce platform.
The Advantages of Expanding Your Reach Across Multiple Channels
Expanding your product reach across multiple sales channels offers several significant advantages beyond just increasing sales:
1. Diversified Sales Opportunities
Selling across multiple channels increases the chances of making sales. This rings particularly true for brands targeting younger demographics, as they tend to switch between locations and devices frequently for shopping.
2. Enhanced Audience Reach:
Beyond boosting sales opportunities, diversified channels enable a broader audience reach, bolstering your brand’s visibility. Introducing products on new sales channels often exposes them to different demographics, potentially attracting previously untapped customer segments.
3. Customer Preference and Retention
Certain customers develop strong affinities for specific channels. For instance, 97 percent of Amazon Prime customers extended their membership for a year, and 99 percent renewed for a second year in the first three months last year. Capitalizing on customer preferences can significantly boost sales and loyalty.
4. Cost-Effective Expansion
Venturing into new markets through physical stores abroad can be financially taxing. Leveraging online sales channels, such as marketplaces, is a cost-efficient alternative.
It allows you to reach new customers without the expense of establishing brick-and-mortar stores or undertaking extensive marketing campaigns. Utilizing affordable or free software solutions, like inventory management tools, further minimizes expenses.
You might want to start your first ecommerce website, but there are a few things that you need to keep in mind beforehand.
Consider This Before Starting Your First Multichannel Ecommerce Website Venture
Starting an ecommerce venture with your own website might seem like the ultimate goal, but it’s not always the smoothest entry point into the market.
Now, here’s the crux: if you’ve already established a strong brand presence, having a robust website becomes paramount. It gives you ownership of your customer base, a rarity in a scenario where most platforms or marketplaces hold that data, making online sales transactional.
When you drive your own traffic, you’re not just making sales; you’re cultivating a loyal community through a direct-to-consumer approach. Think of it as nurturing a tribe of enthusiasts who like your brand and eagerly await your product launches.
Moreover, if you’re into business-to-business (B2B) ecommerce, your website can serve as the pipeline for direct sales to other businesses. The beauty here lies in the potential for repeat orders. Imagine selling industrial equipment through your website to other companies who regularly restock—this could mean sustained, long-term customers.
1. The Role of Social Media as a Part of Multichannel Ecommerce Strategy
Social media has transcended itself from being a mere hub for entertaining content. It’s a thriving marketplace ripe for product sales. Platforms like Instagram, TikTok, Facebook, and Pinterest stand as the prominent arenas for leveraging social commerce, offering a canvas for showcasing stunning visuals and engaging videos that bring products to life.
The beauty of social media selling lies in its ability to allow potential customers to envision themselves using the showcased products. By portraying your offerings in action through captivating images and videos, you create an immersive experience, enticing viewers to visualize how your products fit into their lives.
The integration of buy buttons directly within posts streamlines the purchasing process, enabling users to casually scroll through their feeds to make impulse buys without the hassle of entering their credit card details.
Pros of selling on social media:
- No platform fees: Unlike marketplaces, social media platforms generally don’t charge fees for selling products.
- Access to analytics: These platforms offer insights into your performance, aiding in strategy refinement.
- Potential for a large following: Building a substantial follower base can significantly boost product sales.
- Community building: Social media allows for the creation of a brand-centric community, fostering brand loyalty and engagement.
Cons of selling on social media:
- Time-consuming content creation: Generating engaging posts regularly can demand significant time and effort.
- Costly PPC ads: Investing in social media ads, particularly Pay-Per-Click campaigns, can be expensive.
- Need for consistent posting: Regular posting is essential to maintain visibility and keep products atop social media feeds.
The Glossier Case Study
A good example of this is Glossier. Founded by Emily Weiss in 2014, Glossier disrupted the beauty industry by leveraging social media as a core component of its marketing strategy. The brand adopted a customer-centric approach, utilizing platforms like Instagram and Snapchat to directly engage with its audience.
Glossier’s Instagram presence was pivotal in showcasing its minimalist, skincare-focused products. The company didn’t just sell makeup; it cultivated a lifestyle around beauty and self-care, resonating with its predominantly millennial audience. Glossier’s feed wasn’t just about products; it was a visual narrative celebrating individuality and natural beauty.
By encouraging user-generated content (#glossierrepost), Glossier transformed its customers into brand advocates. They regularly reposted user photos showcasing their products, creating a community-driven, inclusive atmosphere. This strategy didn’t just sell products; it fostered a sense of belonging and empowerment among its followers.
2. Wholesale and Multichannel Ecommerce
Wholesale involves the bulk sale of products to other businesses, allowing them to sell these items for a profit. One of the primary advantages of wholesale lies in the opportunity for your products to gain visibility in retail stores, exposing your brand to a vast array of potential customers.
Typically, wholesalers are larger entities capable of handling substantial product volumes, making it an ideal avenue for selling your products in large quantities.
Traditionally, wholesalers collaborated primarily with brands capable of mass production. However, newer wholesale platforms like Faire and Ankor Store have emerged, catering to smaller amounts of wholesale products and targeting independent retail stores seeking unique offerings.
The Wick & Glow Case Study
Consider the journey of a small artisanal candle-making business named “Wick & Glow.” Starting from a modest studio, they meticulously crafted hand-poured candles with unique scents and elegant designs. Recognizing the potential to scale their business, they ventured into wholesale.
Wick & Glow partnered with several boutique home décor stores and gift shops, offering their candles in bulk quantities. This wholesale strategy proved transformative for their brand. Their candles, once confined to online sales and local markets, suddenly found shelf space in multiple retail outlets across different cities.
Pros:
- Bulk sales potential
- Wider audience via retail store placement
Cons:
- Requirement for large-scale production
- Reduced profit margins
- Limited ownership of customer relationships
3. Google Shopping and Ads as a Sales Channel
Google Ads and Google Shopping have emerged as pivotal sales channels for ecommerce brands, given that a significant 46% of product searches originate on Google itself. [Search engines graphic]
For many businesses, organic ranking on Google can be a fierce battle, particularly when competing against larger brands. This is where a well-crafted PPC strategy becomes crucial in ensuring your products stand out and reach potential customers.
Pros of leveraging Google Ads and Google Shopping
- Expansive customer reach: These platforms can drive thousands of potential customers to your products.
- Enhanced visibility in search results: Prominent product listings directly lead customers to your website, facilitating cross-selling opportunities.
- Ownership of customer data: Direct sales allow you to capture valuable customer information for future marketing endeavors.
- PPC optimization tools: Platforms often provide tools like Demand Side Platforms (DSPs) to effectively manage and optimize PPC spending.
Cons of using Google Ads and Google Shopping
- Cost and time investment: Without a well-defined strategy, PPC campaigns can be financially draining and time-consuming.
The GlamVogue Case Study
Enter “GlamVogue,” a cosmetics brand aiming to carve a niche in the competitive beauty market. Facing intense competition and struggling to secure organic visibility, GlamVogue turned to Google Ads and Google Shopping to amplify its online presence.
Crafting engaging ad copies and leveraging Google Shopping’s visual appeal, GlamVogue strategically targeted their audience with ads showcasing their trendy makeup line. By aligning their campaigns with popular search queries and user preferences, they successfully attracted a substantial flow of potential customers to their website.
4. Influencer Marketing of Your Goods and Services
Partnerships with influencers have evolved into a pivotal element of digital marketing strategies, offering a gateway to introduce your brand to a new audience. [Partnerships and influencers graphic]
Influencers wield significant influence over their dedicated fan bases, often driving substantial product sales through their endorsements. Selecting the right influencer involves aligning their audience demographics with your target market, ensuring an overlap that maximizes impact.
Pros of leveraging partnerships with influencers:
- Access to an existing audience: Influencers offer direct access to engaged audiences that align with your target demographic.
- Cost-effectiveness: In many cases, partnering with influencers can be more economical than traditional advertising methods.
- Influencer credibility: Influencers are trusted voices in their respective niches, lending authenticity to your brand’s message.
Cons of influencer partnerships:
- Brand alignment: Ensuring that the influencer’s content aligns with your brand values and messaging is crucial for maintaining brand integrity.
- Cost considerations: Engaging prominent influencers can be expensive, requiring careful selection to justify the investment.
The FreshFeast Case Study
Meet “FreshFeast,” an organic food delivery service aiming to establish a stronger foothold in the health-conscious market. Recognizing the potential of influencer marketing, FreshFeast strategically collaborated with wellness influencers and nutrition advocates to amplify their brand’s visibility.
One such partnership involved teaming up with a popular fitness and lifestyle influencer, Hannah FitLife, known for her dedication to promoting healthy eating habits and exercise routines. By partnering with Hannah, FreshFeast gained access to her engaged audience interested in wellness and nutritious food options.
Mobile commerce constitutes nearly 45% of total online sales, underscoring the undeniable significance of catering to mobile shoppers. Dedicated apps such as Wish, Shop by Shopify, and Sephora, tailored explicitly for mobile users, serve as specialized marketplaces. Even renowned platforms like Amazon have dedicated mobile applications.
5. Shopping Apps for Multichannel Ecommerce Marketing
In targeting online shoppers, optimizing listings and images for mobile devices becomes paramount. Whether you sell exclusively through your Direct-to-Consumer (DTC) website or via various apps, ensuring mobile responsiveness is crucial. Search engines like Google also consider mobile-friendliness when ranking websites in search results.
Pros of leveraging shopping apps and mobile devices:
- Reduced competition: Some shopping apps feature fewer brands, offering you an opportunity to stand out in a less saturated environment.
- Expanding mobile audience: With the percentage of mobile shoppers continually on the rise, there’s a growing potential audience to tap into.
Cons of relying on shopping apps and mobile platforms:
- Choosing the right marketplace: Selecting reputable app marketplaces that align with your brand values is crucial to avoid misalignment.
Summarizing Multichannel Ecommerce
Multichannel ecommerce is a strategy whereby selling goods or services is done on all possible channels. This really helps to increase the frequency of sales and the overall engagement of the customers. It does not make one depend on a single channel.
While most new businesses must start with a single channel due to resource limitations, scaling up, the business requires diversifying the channels of sale for risk mitigation from dependence on any one channel.
Online marketplaces are quite easy to enter into, like Amazon, eBay, and Etsy, but they come with large customer bases. Limitations include customer ownership and the commission fees businesses are required to pay. Other avenues a business can leverage for improved reach and customer acquisition include social media platforms, wholesale channels, and Google Ads.
This is in order to enable multi-channel selling, and reach an even wider audience. However, the selection of the channels should be done in such a way that it reflects its unique advantages and challenges while aligning with the business objectives and customer preferences.
Common FAQs on Multichannel Ecommerce
Why would a business adopt multiple channels of sale?
This enables the firm to diversify by creating various avenues of sale and reaching out to more customers, hence reducing dependence on one platform. Moreover, it enhances customer retention by catering to the shopping preferences of each customer.
Why is mobile optimization so important in ecommerce?
With such a huge chunk of online shopping being done on mobile, its optimization ensures smoothness in user experience, guaranteeing better search rankings. Ultimately, this brings more sales and customer satisfaction.
What are the challenges of expanding through wholesale channels?
While wholesale gives more visibility by way of retail stores, it basically demands large-scale production and often at reduced profit margins due to bulk pricing. Secondly, customer relationships are normally handled by the retailers.
