Multichannel retail is subject to the butterfly effect, where whatever happens on one channel can affect your efforts in others. Small changes in channel strategy quickly spiral into struggles to maintain inventory, marketing efforts, customer service, and consumer feedback.
Knowing how to address challenges for your multichannel retail business will ensure you run a tight ship. Create strategies for each moving part, engage with your industry’s community online, and gather support and feedback where needed to help your business run more seamlessly and generate more revenue.
1. Overstocking and understocking inventory without a game plan
In the U.S. out-of-stock rates for online merchandising are much higher than the out-of-stock rates for one-stop shops. And the cost of inventory mismanagement — overstocks, understocks, and preventable returns — is nearly $2 trillion.
Having a solid inventory management strategy in place is essential for your multichannel retail business.
Customers will move on rather than wait if a product isn’t in stock or “will arrive in 3 weeks.” A solid inventory strategy can build credibility for your brand.
Inventory management is often thought of as the most challenging aspect of multichannel retailing. Each channel functions on its own, so change on one platform doesn’t translate to the next.
For example, let’s say you have a collection of candles on your multichannel retail shop, Amazon, and Etsy. Your most popular scent, in particular, sells out but only marks as out-of-stock on your boutique site — neglecting the third parties. Now you’ll have to reach out to the buyers who purchased the missing candles. Let them know that the item is unavailable or will take an extended time to restock. Either option doesn’t look good for your brand or business.
A situation like this is avoidable with the right planning and strategy. And as a result, you’ll build your reputation and lower the cost of inventory mismanagement.
Inventory solution: Follow a 4-step process that steers clear of overstocking and understocking
A strategy will keep your inventory, logistics, and distribution functions in sync, to meet customer expectations across all retail platforms.
- Use a system for inventory management: As a multichannel retailer with a solid system in place, you’ll have a more accurate view of products moving through the supply chain. An inventory system aims to verify items match with barcodes and product tags to avoid discounts. The codes and tags offer accuracy — ensuring your stock level in the warehouse matches what you have in your digital system.
- Gather accurate data: Precision is crucial when it comes to collecting information for your inventory count to avoid running into untimely restocking. When looking at what’s physically in the warehouse, on paper, and in the inventory system, ensure the numbers are the same across all three areas.
- Dig into customer needs: From looking into trending topics (like what’s hot for the holidays), get clarity and dig into what’s intriguing to your audience. What are your competitors selling that you can add your own flair to in order to make it better? Stay ahead of the game to ensure you are the first business your target audience turns to. Knowing what is popular in the market will let you know what to buy more of to avoid understocking, as well as what to buy less of to avoid overstocking.
- Outsource a logistics supplier: While you have the option to invest in individuals and systems to get the perfect amount of stock, choose to outsource a logistics supplier instead. They already have the assets, knowledge, and experience to ensure your stock levels are tight.
2. Delivering consistent marketing and messaging across multiple social platforms
For high engagement, brand messaging for your business needs to be the same across all social media platforms as a multichannel retailer and marketplaces. Your target audience will have a crystal-clear understanding of who they’re engaging with.
But many brands overextend themselves. Only 9% of marketers consistently engage with customers across multiple channels. Rather than remaining consistent on a few channels, they open themselves to more avenues and then struggle to maintain conversations with their audiences on each.
But whichever marketplaces your products are on, make sure your most active social media platforms are visible and accessible. Customers and potential buyers should have quick and easy access to your social channels to see what you, your brand, and your products are all about.
As a starting point to increasing customer engagement and connecting with customers, focus on one or two channels where customers engage most. Whoever follows you on those likely has an interest in your products or has already made purchases and is ready for more.
Marketing solution: Create space on social media through 3 customer-engaging tactics
- Get creative: Create polls on Instagram that provide knowledge about your brand, product history, plus different channels you sell on. What you share will be mini teaching moments for your followers to connect in a more meaningful way.
- Be interactive: Ask product-related questions in Facebook groups, on Instagram stories, or whenever you receive the most engagement. You’ll gather different perspectives from your audience to later apply to the type of products you sell.
- Use customer feedback: Social proof is everything. And with 92.4% of customers relying on online reviews to determine their future purchases, you’ll want to showcase the positive customer reviews to make your business shine. The firsthand, genuine remarks are what will attract future buyers to hop on the train to buy from you too.
3. Focusing too closely on your product instead of customer service
You can quickly lose a potential customer before they “walk through the door” if you’re giving too much attention to your products and not enough to them.
According to Bain & Company, a customer is four times more likely to do business with a competing brand if a problem they incur with your brand is service-related rather than price-related.
Also, Salesforce’s customer service facts found that you can boost revenue by improving customer service efforts. They say that an excellent customer experience is essential for building relationships with customers. And 67% of people say they’d gladly pay extra to get it.
With the perfect team and the help of automation in place, you’ll have high satisfaction results from customers.
Customer service solution: Scale your team and use automation
Scale your team by having a point person handle customer inquiries. While the person in this position should have a strong background in customer service, allow them to lean on automation when traffic increases. The mechanization will heighten the chance of solid interactions and experiences.
Your customer support representatives should carve out time daily to cater to the needs of consumers. So, hire people who are big on genuinely interacting with customers.
For customers to immediately reach out, ensure your contact details are accessible. All information should be the same on each platform to ensure all customer questions and inquiries go to the same email address, phone number, or social media channel for direct messages.
Automation can come into play by implementing automated responses. A simple — “Thank you so much for reaching out! You will receive a response from a team member within the next 12 hours” — goes a long way, rather than leaving customers in the dark.
4. Evaluating your market without listening to customers
It’s easier to collect complex data than evaluate qualitative feedback or notice subtle signs. And subtle signs can be given to you if you ask customers for them.
Only one out of every 26 customers is likely to give feedback about their complaints. The rest of them take their business elsewhere. But you can increase the pool of customer feedback by letting customers know that you’re here to listen and make a difference.
Evaluating your market by tuning into customer feedback will help you guide your marketing efforts and increase customer satisfaction — which will determine if you meet their expectations.
Listening solution: Offer surveys to get clarity on customer needs
Because people now have shorter attention spans than goldfish, you need to offer quick and simple survey questions that get to the point and draw their attention, so you get the feedback you need. The more feedback you get from your target audience, the better you can cater to their needs.
For instance, let say you run a multichannel retail business that sells protein vitamins and supplements. Your newest protein powder claims to boost energy and metabolism faster than competing brands.
Rather than relying solely on market and sales data as a determining factor of success, personally reach out to customers for feedback.
Send out a blast email or text message, asking a few questions to buyers of the new supplement. Ask them about the pros and cons, as well as ways you may be able to improve the product. Overall, the goal is to show customers that you hear them — considering their recommendations and applying them to future products.
Optimize your multichannel retail business for consistency
Optimizing for consistency across each channel minimizes the chances of small changes turning into big problems. In turn, optimizing maximizes the chances of multichannel retail success. Focusing on enhancements is especially crucial if your business is booming and you’re working on expanding to new channels.
Bring your channels closer together by using a marketing dashboard for optimization. You’ll keep a closer eye on all moving parts of your operations, ensuring everything flows as perfectly as possible. And, of course, having a proper system running will help you stay competitive with cost and customer retention.