Internet sales figures are continually increasing, while at the same time, retail stores are struggling to maintain their market share. The introduction of multichannel systems is a popular approach to meeting this challenge, and involves retailers opening other channels for Internet shopping, in addition to their local branch outlets. This is how many classic retail shops are now choosing to compete with the numerous online shops that offer goods exclusively via the Internet. However, this strategy has not always proved to be successful. Even where large investments have been made in such alternative distribution channels, returns have been limited due to fierce competition from dedicated online-only players. That’s why it is now essential to plan such multichannel strategies very carefully indeed, because only intelligent networking of individual channels will have the desired positive effect on sales and profits.

Omnichannel strategies are not always successful

One reason some of the channels fail to succeed is that retailers don’t seem able to deploy them with the necessary degree of professionalism. It often seems that online trade is regarded as a mere addition to their in-store offers. However, consumers have become accustomed to a slick, professional and ultra-efficient purchasing experience when shopping in online locations. If an online channel does not live up to these requirements, shoppers will simply choose other online shopping options instead. In these situations, a commercial investment just won’t produce the desired return. In addition, there are often further shortcomings with social media strategies – an issue that is particularly relevant if a younger target audience is to be addressed. Such outcomes demonstrate that it’s not always advisable to implement an omnichannel concept – i.e. any approach that attempts to include all available options. It’s usually a wiser policy to select channels that are likely to be particularly relevant to your own target group, and limit your focus to these areas. It will certainly prove more profitable to concentrate on just a few sales channels where you can create and maintain a professional concept. An online presence is only worthwhile if the customer finds the offers convincing and the retailer is prepared to support the channel via targeted marketing and a consistent communication policy.

How to network effectively

It’s equally important not to look at each channel in isolation, because for the retailer they should all form part of one overarching strategy. It is crucial to integrate your individual options and strategies in order to maximise the impact and efficiency of your online presence. Firstly, this offers customers a completely new shopping experience – for example, customers can view a product online and discover lots of detailed information entirely at their leisure. In addition, it’s very easy to compare prices with those offered by other retailers. If this activity results in a firm inclination to buy, the customer can then proceed to purchase the product from a store outlet, having already checked online that the item meets all their requirements. Furthermore, channel networking also presents many opportunities to acquire new customers, while access to the data generated by your retail stores is another significant advantage that is not available to your online-only rivals.

Behind-the-scenes functions play an important role

Networking should not just be available on the customer side; it also has the potential to increase the efficiency of your internal processes. For instance, interconnected channels are especially helpful for inventory management. Studies show that sales figures often vary considerably between online outlets and retail stores. However, with intelligent connectivity, increased demand on one channel can be absorbed by using stocks available from other distribution channels. As a result, this will lower overall stocking levels, which in turn will reduce the losses associated with disposal of excess inventory via sales and discounting. The concepts ‘ship-from-store’ and ‘in-store-ordering’ play an important role here: in the first instance, employees send products that are no longer available in the e-commerce warehouse direct from the store. In the second instance, in-store sales staff can order items that are currently out of stock direct from the warehouse and then have them sent on to customers.

This article was originally published on LinkedIn.