Multi-channel Expansion: Is it Right for Your Business?

Phrases like omni-channel and multi-channel get used a lot in today’s world of payments. Fifteen years ago, the Internet started presenting businesses with opportunities to create new or additional sales channels. Five years ago, smart phones and other mobile or cloud-based technologies started dominating conversations and sales strategies.

Multi-channel is a term regularly used to describe a business strategy where businesses take advantage of two or more customer sales points to bolster revenue.  For example, a storefront that also sells inventory through an e-commerce platform or website has a multi-channel sales model. Historically, multi-channel is a strategy that only big box retailers could employ. They were the only types of businesses that had the resources, time and incentive to differentiate. Retailers like Apple and Nordstrom have implemented multi-channel solutions exceptionally well. They have a storefront with a traditional sales counter, an integrated e-commerce shopping experience, and in-aisle check-out solutions.

With technology becoming more and more available and more business focusing on creating new solutions, multi-channel is no longer a topic of conversation for large retailers. Businesses of all sizes can engage in multi-channel now.

There are several factors that business should consider before taking on a multi-channel strategy. These three are a good start:

 

Do what makes sense for your business.

As noted above, the main advantages to employing multi-channel solutions are creating a cool and convenient shopping experience for your customers and developing more sales opportunities. However, many business believe that because multi-channel is available to them, they should immediately adopt. This could be a mistake.

Multi-channel is a very difficult endeavor to employ. It works for large retailers because there are incentives to differentiate and they can employ full-time teams to manage e-commerce and in-aisle, mobile sales. Online shoppers tend to be very price sensitive, so if you are a novelty store and your prices tend to run higher than large retailers, setting up a full-on e-commerce shopping cart may not be the right extension for you. The online focus should be to get people to the store and, then, create a unique experience in-store. Quick serve restaurants is another vertical that struggles to implement multi-channel. Unless these businesses are providing the opportunity to order online, these restaurants can’t really justify an e-commerce strategy. They can, however, consider some in-aisle solutions to help with ordering and speeding up the queue.

 

Multi-location is similar to multi-channel. 

Sometimes all a business needs is another location. Expanding your business from one location to two or three locations is very similar to multi-channel. Instead of setting up an e-commerce website, you are setting up a second storefront – which is just another way to capture more sales. If you are a business that already has multiple storefronts, adding a multi-channel strategy may be easier than you think. For example, if a customer were to buy something at one location, they should be able to return it another location. This functionality seems logical, but many businesses have difficulty connecting transactions across locations and channels. Same can be said for gift card transactions.

 

It’s all about reporting. 

Aside from providing a cool shopping experience for your customers and providing multiple customer touch points, the most important determinant to employing a multi-channel solution is your ability to get consolidated reporting. This is where the real value comes into play. Whether you are creating new sales mediums or opening a new location, reporting is what keeps everything together.

The ability to not only have a seamless transaction experience across locations or payment medium, but to also view and analyze these transactions in one place is crucial to taking advantage of a multi-channel strategy.

In conclusion, multi-channel is a term that gets used a lot in different payment industry conversations. Many payment companies, like Merchant Warehouse, offer multi-channel extensions and consolidated reporting to help with implementation. If you are looking into a multi-channel strategy or opening up a second storefront, consult with your payment provider and see what solutions they offer.