As an idea, multichannel retail has gained plenty of traction in the online retail space.
It’s a catchy phrase, fits 21st century ideas, and allows retailers to seamlessly interact with their consumers.
However, the practice of multichannel has taken its toll on some retailers, at least that’s what JDA’s Omnichannel Fulfilment Imperative found.
According to a survey conducted by PwC, retailers are optimistic about their revenue growth, but only 19% of top retailers say they can fulfil multichannel demand while still remaining profitable.
This is largely due to costs incurred by the retailer to improve the customer’s shopping experience.
Multichannel has proven to be costly so far, but it doesn’t have to be that way. Retailers need to fine tune their strategies to get the most out of multichannel’s innovation and reach.
Here are three ways to do just that…
Improve your return policy
JDA software’s survey revealed that 71% of retailers cite customer returns as the most costly aspect of their multichannel process. A good multichannel strategy offers free returns with online orders, leaving the retailer to absorb the cost themselves.
One way retailers can avoid these costs is to encourage in-store returns. That way, the consumer can find exactly what they’re looking for, and retailers sell the product in-store in the meantime instead of shipping it back to a warehouse.
Another way retailers can offset the cost is to provide a threshold for free returns. If a customer purchases at least $X online, they can qualify for free shipping. The increased order value can make the costs feel less sharp for a retailer.
Actions taken by consumers to qualify for free shipping, courtesy of UPS:
Improve your inventory visibility
According to 32% of retailers surveyed, poor inventory visibility hinders sales. This means they incorrectly displayed an order as being in-stock when it was actually out of stock, and vice versa. A good multichannel strategy provides complete inventory transparency across all selling channels.
Many retailers have directed their attention to inventory management software, and for good reasons. The software can offer retailers recommendations on what to order and when to do it. It also keeps all of your inventory information in one place, improving organisation.
Retailers need to blur the lines between their online and brick and mortar inventory. Provide inventory information for the store nearest to online shoppers. That way if an order isn’t in your warehouse, they can still purchase it from your store.
Improve your customers’ access to products
Click and collect is an awesome way to connect your online and physical selling channels. However, almost 60% of retailers said that shipping to stores for consumer pickup was the most costly aspect to running a multichannel strategy.
This problem goes back to retailers dividing their inventory between brick and mortar stores and online warehouses.
If your product is already in a physical location, just allocate some items solely for click and collect customers.
The costs of constantly shipping new products are avoidable and unnecessary.
There has never been a better time for bringing together retail’s selling channels. Consumers across the world are always connected to the internet, whether it is through their phone or laptop.
Retailers who are taking advantage of this now will be the first ones to perfect their strategies. This will result in lower costs and higher profits.