1st May, 2020
As COVID-19 pushes consumer activity online, retailers and merchants that can offer a multichannel experience will find themselves in a strong competitive position.
The beginning of 2020 has certainly been unprecedented, forcing some industries to challenge their business model in order to survive the COVID-19 pandemic.
Foot traffic across shopping centres and high streets has taken a sharp decline, as shoppers adhere to social distancing measures and only head out for essentials.
Pureplay bricks and mortar retailers and wholesalers are faced with challenging times, as sales drop and many are forced to close in the face of a total lack of trade.
By comparison, merchants who previously embraced digital transformation, incorporating e-commerce into their mix of channels, continued to trade during this period, with some thriving as isolated and bored shoppers head online to escape.
Online sales reached over $1.95 trillion in 2016 and showed no signs of slowing, with sales predicted to approach $5 trillion by 2021.
The behaviour change brought about by this pandemic is likely to have long-lasting effects. Shoppers have been forced into a digital transformation of their own, with many shopping online for the first time.
We have seen this behaviour before. In 2003 when the SARS outbreak hit China, JD.com was forced to pivot their bricks-and-mortar electronics business entirely online; today, they are one of the biggest B2C e-commerce providers in China.
By embracing e-commerce merchants can see massive long-term benefit, as they capture new audiences available to them beyond the confines of their geographical location.
The evidence backing e-commerce is clear, but that’s not to say that traditional retail is dead. Today’s retailers and wholesale operations must incorporate a multichannel retailing approach in order to maximise their growth.
For those unfamiliar with the term, multichannel retailing is a strategy that enables retailers and wholesalers to sell their products to the end consumer via a variety of channels. The strategy boils down to the old adage of not putting all your eggs in the one basket.
Multichannel retailing solutions include:
Starting a multichannel journey can seem overwhelming, but thankfully, it doesn’t have to be. The best approach is to tackle it with a longer-term strategy and focus on setting up one channel at a time.
The first step is to select a platform that will enable a business to become a multichannel retailer. One of the benefits of multichannel retailing is a much higher sales volume potential, so advisors and their clients should work to make sure the business can scale using automation, rather than relying on manual processes.
One of the biggest challenges for sellers is to ensure that stock levels are correct across all channels, which is vital in preventing over-selling that can anger consumers if orders aren’t fulfilled.
Here are a few things that you’ll want to make sure your clients have considered as part of their journey into multichannel retail:
The main benefit of SaaS platforms is the lower cost to entry in addition to being able to launch projects quickly.
The experts behind these technologies have already dedicated hours into technical development and testing to ensure the product works, so this is time saved.
SaaS platforms are also responsible for implementing new features and usually offer free trials, so the product can be tested before you commit to a subscription.
To support multichannel retailing, your clients’ platforms will have to integrate into other marketplaces like eBay and Amazon. It’s therefore important to clearly establish who owns those integrations.
With native integrations, the chosen platform will offer support for any technical issues, and also any updates that are required in the future.
The cost of these updates are included in the subscription plans, unlike third-party integrations, where customers may have to pay for future updates and to fix any technical issues.
Adopting a multichannel strategy can be almost impossible without an inventory management system that automatically tracks stock across all the sales channels.
Selling on multiple channels is not just about listing products, it’s vital to keep track of inventory in a way that’s easily scaled, so we recommend you advise your clients to move away from spreadsheets for these activities.
Inventory management systems are able to efficiently optimise the fulfilment process, so consider systems that can also manage purchase orders from suppliers, and automate low inventory and help merchants forecast stock demand.
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After choosing a platform, it is important to assist clients in coming up with a strategy for the channels they want to sell on, whether that is online, offline or both.
An online store is a great way for retailers to improve brand recognition, but similar to a bricks and mortar store, it will still rely on traffic coming to their store before they can sell products. Directing traffic to a website will involve marketing spend, so what are the alternatives?
Well, marketplaces are a great place to start as they allow businesses to rapidly generate sales and reach customers, with zero marketing spend. Marketplaces are already established, and in 2019, more than 50 percent of e-commerce sales made globally were through marketplaces, and accounted for $1.7 US trillion and this trend is set to increase in the next few years.
Globally, there are hundreds of marketplaces including Amazon, eBay, Etsy, AliExpress, Rakuten, Taobao and more, so review the marketplaces that are local in your own region.
In Australia, there are three popular marketplaces that are worth considering:
If your clients are using an integrated platform like Neto, getting started on these marketplaces is simplified, giving them the ability to sync products, descriptions and images straight from the platform. As their products sell, this information is synced back into Neto, keeping inventory up to date and streamlining the fulfilment process.
Building the products to sell online may be daunting, so we suggest retail businesses focus on the 20/80 rule. Help them identify, from past sales history, the products that attribute to the 20 percent of current sales.When starting a multichannel approach, it’s not essential for the business to list all the products at launch. They can start with a smaller number and then continually add and build out the product catalogue. Different marketplaces will have different requirements for listing, but the essential fields include:
Most marketplaces or SaaS platforms will also have product templates that can be used to edit product data on mass and usually comes in a CSV format. Using this method will make it a lot quicker for retailers to update products instead of editing it one by one in the platform.
As with all things, getting started involved taking the first step. Now is the time to start speaking to your clients about how they can embrace new opportunities in their markets and recover lost ground.
The good news is that the team at Neto are here to help. Reach out to their Partner Team on 1300 730 300 or email them to learn more about how Neto can help your retail clients during this period.