Practical Ecommerce

What Is Multichannel Selling?

Defining multichannel selling has taken a new twist in recent years, but the end result is the same for merchants — getting products to sell in the hands of potential customers. In the old days (about 10 years ago), multichannel selling consisted of two options — brick-and-mortar stores and catalogs. Prior to the advent of ecommerce, reaching a new customer base was incumbent on an entrepreneur franchising his retail store or getting his company’s catalog in front of a new shopper.

As ecommerce blossomed, it opened a third sales channel for merchants; launch a website and you can suddenly sell to a global marketplace. As the cost to enter the ecommerce market dropped, many entrepreneurs bypassed brick-and-mortar stores and catalogs altogether, preferring to launch a virtual store online.

New avenues for smaller merchants

The Internet has changed how many people shop, but that doesn’t mean brick-and-mortar stores and catalog opportunities have lost steam. In fact, new online channels have given small-business owners a new advantage in competing with the mega-retailers. Scot Wingo, CEO of ChannelAdvisor, a company that provides software and consulting to businesses wanting to manage multiple sales environments, says merchants who embrace the new shopping trends will have a business edge over those who do not.

“More and more consumers are starting their online shopping experience through comparison-shopping engines, online search engines and marketplaces,” said Wingo. “That seems alarming, but it is actually a big opportunity for smaller businesses because they have a chance now. Instead of the consumer entering Bestbuy.com, Walmart.com](http://www.walmart.com) or something like that, [merchants] have a chance to get in front of that consumer once the consumer is at a search engine, at eBay or at a comparison shopping engine like BizRate or something like that.”

Recent developments within the ecommerce tract have created two new dynamic sales channels. Beyond a basic website, a merchant can now sell in a public marketplace like eBay, Overstock and Amazon as well as tap into a multitude shopping-comparison sites like Shopzilla.com, Shopping.com, Buy.com, Froogle and others.

Multiple channels, multiple definitions

Some people define multichannel selling as a combination of brick-andmortar, catalog and Internet activity. Others say multichannel selling can be defined as sales within the various online channels: single website, public marketplaces and shopping-comparison sites.

Either way you define it, tapping into multiple sales channels can increase opportunities for additional sales as well as help expand your brand’s recognition.

Ralf VonSosen, vice president of Infopia, an company that provides an ecommerce platform to help merchants manage multichannel sales endeavors, says maximizing multichannel opportunities is about knowing who your customers are and where they are doing their shopping.

“The multichannel environment offers companies an ability to reach customers who would have had a very difficult time finding a specific website,” VonSosen said. “So, it allows companies to take a brand that does not necessarily have the recognition to an environment where there are buyers who are evaluating products and are ready to buy. Shoppers can learn about you that way.”

The public marketplaces bring millions of shoppers to their sites. In the second quarter, eBay alone had 203 million registered users, representing a 29 percent increase over the 157 million users reported at the end of the second quarter last year. eBay’s new listings totaled 596 million in the second quarter which is 35 percent higher the second quarter of last year. Some $1.3 billion in goods were traded over eBay during the quarter, 108 percent above the first quarter’s level.

Shopping comparison sites also serve as a powerful tool to connect buyers and products.

Pricegrabber.com recently reported they alone have more than 18 million unique visitors per month.

The good news is that those customers who respond to multichannel marketing are different from single-channel customers: They tend to earn more money, and they buy more. In addition, customers who purchase via at least two channels spend more per year than single-channel shoppers.

Online retailing association Shop.org’s recent research study showcases the opportunities of selling through multiple channels.

It found that multichannel shoppers are more valuable than customers who shop via a single sales channel. Those shoppers have a 12 percent greater buying frequency and a 32 percent higher annual spending history than customers who shop at brick-and-mortar only.

The research found that trichannel (retail, catalog, Internet) shoppers are more loyal than otherwise similar customers who purchase from only one or two channels. The study found that customers who purchased from all three channels had a 73 percent likelihood to make similar purchases from that retailer.

“The online selling environment is continuing to grow and is reaching more and more customers,” said VonSosen. “I emphasize it is important that you really start with the end in mind in terms of the target customer that you have, because it is not an if-you-build-it-they- will-come type of an atmosphere anymore. It is not about putting up a website and your customers will appear. I think you really have to use your website and your online presence as a very targeted tool to those target customers.”

Practical Ecommerce

Practical Ecommerce

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Comments ( 2 )

  1. Legacy User March 14, 2007 Reply

    We are interested in republishing this article on http://www.consultantsunited.com
    We would give full accreditation to the author and an appropriate weblink.
    Please advise

    — *Liz Lane*

  2. Lipika Devi August 21, 2015 Reply

    Unicommerce, the fastest growing technology company helps multichannel sellers automate inventory management. Currently there are 2000+ online sellers who are benefiting from this platform including – Snapdeal, Myntra, Jabong and so on.

    http://www.unicommerce.com/