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Multichannel Retailing – Definition and Pros and Cons


Welcome to our article on multichannel retailing! In this post, we will define the concept multichannel retailing, and also give you a list of pros and cons of multichannel retailing, so you can easily tell if this method is right for your brand.


Hopefully, this article will help you better understand how a multichannel approach to marketing your products or services can benefit your business…


Multichannel Retailing – Definition and Pros and Cons


Before the digital era, you could find a used truck at the car dealership, fruit and veggies at the farmers market, and an antique desk at a remote retailer in town. Many brands were forced to focus their marketing efforts on a single distribution channel.


Now that we are in the midst of the ever-evolving digital world,  however, smart brands are taking advantage of mutlichannel retailing to scale their numbers get to more customers in new and innovative ways, and gain a competitive advantage over their competition.

Whomever the supplier was would be the one who chose how, where, and when their products could be sold. However, with the coming of the digital revolution, there was a huge transformation in the number of existing channels, and e-commerce, data feeds, and mobile shopping came about.


Along with new communication and information technologies, consumer habits were forced to change. 

Products and services became available 24 hours a day, consumers started to shop a larger variety of distribution channels to determine the ones that accommodated them the best. Consequently, businesses that needed to stay competitive felt obligated to discontinue selling their products and services using a single channel. This is how multichannel marketing came about, but what exactly does this word suggest?


What is Multichannel Marketing?


Multichannel marketing, also known as a multichannel approach, is a strategy taken in the communication and selling strategy of brands that intends to influence potential clients by using various communication channels together. From the customer’s point of view, this method allows them to connect with a company in different ways to understand the products and services it offers and obtain them.


  • The various sales channels include:
  • Branches of the company
  • Fixed points of sale (like shopping centers or stores)
  • Street sales (street vendors, mobile outlets, and commercial agents)
  • Sales by catalog
  • Sales by mail
  • Telemarketing
  • Online shopping


Mobile shopping has been a deciding factor in the growth of multichannel marketing. A company that counts its sales based on multiple channels, answers to the needs of their customers, aimed at becoming autonomous to conventional methods and being capable of choosing their own needs based on their terms. 


Therefore, the central goal of multichannel marketing is to maximize the performance of all marketing channels, transforming them to meet the special needs of their target audience. 


In the case of retail sales in established stores, the consumer expects to be informed by an expert, while in online selling the most critical concern is to extend an appealing pricing and managing your time


Multichannel Retailing - Definition and Pros and Cons


Multichannel Retailing Strategy – Advantages


Multichannel retailing, defined by its versatility, caters to customer satisfaction and, therefore, strengthens consumer loyalty. Thanks to the introduction of new mutlichannel retail channels, audiences can be reached more tha every before, when a single channel never could have offered that.


Addirtionally, this approach offers the opportunity to open new marketing opportunities to market new products and services and allows brand to position themselves in the market. In the long run, a multichannel retailing strategy can greatly substantiate a company’s revenue.


The multichannel retailing approach is a multifacted approach that has shifted the global standard, and even small and medium-sized companies have surrendered to multichannel retailing so that they wouldn’t be left behind, extending their product range on the internet, in addition to their traditional physical properties. With this method, they can easily circumvent losing buyers to their rivals and gain a competitive advantage.


So, to summarize:


The Advantages of Multichannel Retailing: 

  • Advantags for Brands
  • Increased Visibility
  • Increased Brand Recognition
  • Improved Customer Perception
  • Inproved Customer Loyalty
  • Imporved Customer Engagement
  • Increased Sales
  • Better Data Collection
  • Enhanced Productivity
  • Intergrated Payment Systems
  • Seamless Buying Process
  • Accept Different Payment Methods
  • Offer Custimers Rewards for their Purchases
    Ability to Target Diverse Channels to Suit Different Products
  • Advantages for Consumers
  • Allows Consumers to Manage their Preferences
  • Intergrated Payment Systems
  • Seamless Buying Process
  • Accept Different Payment Methods
  • Customers Can Get Rewarded for their Purchases


Disadvantages of a Multichannel Retailing Strategy


If communication, promotion, distribution and commerce is conducted through various channels rather than only one, more complicated logistics and a higher level of control is needed. It may appear that if the various channels do not exhibit a uniform corporate image, the potential customer becomes annoyed and does not recognize whether the products and services offered apply to the corresponding business.


Another disadvantage of multichannel retailing is that various sales channels coincide but are not interconnected in terms of design and information technology. By not allowing the consumer the opportunity of changing from one channel to another in the same transaction this can leave us in the likeness of our competitors, which can be good or bad, because it does offer a comprehensive buyer experience, but as you can imagine, it had it’ drawbacks too…

Another problem to examine is “cannibalization.” For instance: users can sign contracts by telephone, online or through the service provider’s subsidiaries. In a multichannel approach, each of the channels works individually, so that the clerk who advises the consumer in the shop does not benefit from the agreement that that potential consumer can sign through the website. 


In this situation, we would discuss the impact of cannibalization, since the company and, consequently, the exchanges that it makes, move somewhat or entirely from one channel to another. Some shop owners, for instance, worry that consumers move from the physical shop to the online shop, although with numbers this can only be supported to some extent.


However, some studies show a completely different picture. They state that shoppers use the Internet more as an opportunity to familiarize and inform themselves and that 49% of Spanish customers appreciate the opportunity to see a product and touch it before purchasing it, which among experts is known as the “ROPO effect.”


Disadvantages of Multichannel Retailing


  • More Complicated Logistics
  • More Need for Control
  • Brands Chance that Various Channels are Not Recognized as part of the same company
  • Potential Threat of Cannibalization Among Channels
  • Marketing Channels are not Associated
  • There is no Transmission of Information through Various Channels
Multichannel Retailing – Definition and Pros and Cons

We hope that this post on multichannel retailing has given you a better understanding of what multichannel marketing has to ogger brands, and the consumers that essentially make their brand!

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