Consumers are now shopping in many locations unlike before. 56% are likely to buy at a retailer that gives a start anywhere and finish anywhere cart experience. Don't you think your products must be present where the customers are? If so, consider an eCommerce multichannel software or multichannel distribution system.
What is a multichannel distribution system?
A multichannel distribution system is a structure or method in which one company sets up more than one marketing and sales channels to succeed in one or more customer segments—through a brick and mortar store, a web marketplace like eBay or Amazon, an outsized retailer, marketing, wholesale, or resellers.
Pros of a multichannel distribution system
Customers expect products to be available at multiple places, investing in a multichannel strategy. Merchants can experience many benefits, including:
Improved perception of customer
Brands that make a seamless buying experience can gain a lot of customer loyalty. They are perceived as being aware of consumers’ needs and purchasing habits. With eCommerce multichannel software, brands can differentiate themselves through convenience.
Increased customer base
When brands and businesses place their products in the path of potential customers who need those products, whether in the store or online, customer reach, sales, and exposure will increase.
Diversify risk
It can protect merchants from counting on one sales channel. While the event of suspension of a serious account or a supply chain breakdown, merchants who diversify their channels can avoid the hit against revenue.
Growing in new markets
Opting multichannel also allows merchants to show their products to new customers and first-time buyers, resulting in more product sales by selling on the online market, opening a physical store, or expanding to different geographies.
Better control over your brand’s future
With a multichannel strategy, you’re not reliant on one platform. You’re liberal to optimize your supply chain on your own terms, get your own creative marketing, and have complete access to your client base.
Cons of a multichannel distribution system
As with any other business, there are disadvantages to multichannel selling as well. Although a multichannel distribution system increases your sales and brand exposure, but be prepared to face these issues:
Higher labor and materials cost
More products in additional places mean more suppliers, staff to satisfy orders, geographically dispersed warehouses, and extra shipping costs. It requires extra money.
Cannibalization of sales
Opening a web store could result in the Cannibalization of your in-store experience. Visits to your physical store might go down. It’s basically a challenge faced by retailers when crafting omnichannel shopping experiences.
Potential for channel conflict
Conflicts can take many forms in multichannel distribution: two similar distributors competing for the acquisition, direct sales competing with an independent distributor, retailer vs. distributor, small merchants vs. retail goliaths, and more.
Also, Read this related blog - Top trends in Multichannel Retail
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