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Multi Channel Retailing – Types, Benefits and Trends

Multichannel retailing involves selling commodities or services via more than one channel. Many retail companies have started to use multiple channels to reach customers. For example, nearly all big stores and catalogue retailers sell their offerings through both; their websites as well as in their stores.

Types of Multichannel Retailing

1. Store Channel

This type of channel grants many advantages to customers which they cannot avail while shopping online through non-share channels like the catalogue or the internet. Tangibility is one of the most significant benefits of the store channel.

2. Internet channel

Internet retailing is a type of channel in which the products and services are marketed and offered to the customers over the internet. It is also popularly known as online retailing, electronic retailing and e-tailing.

3. Catalogue Channel

A non-store retail channel where the information about the products offered is communicated to the customers via a catalogue sent to customers on mail.

4. Direct selling

When sales representatives communicate with customers physically in a suitable location is called direct selling. These representatives are trained to communicate information about the product by demonstrating commodity benefits or explaining a service, taking an order, etc.

5. Television home shopping

Also known as teleshopping is a channel type where the merchandise is displayed in a television program and their orders are then placed typically through a telephone or the internet or the TV remote.

6. Automated selling/ automated vending machines

This type of retail channel dispenses commodities in exchange for cash or the use of credit card. The products in this type of channel are pre-stored in a machine and then handed out to customers post payment. Automated retailing machines are popularly also known as vending machines and are usually installed at accessible, high-traffic places, like workplaces, schools, railways stations, malls.

Trends in Multi channel Retailing

1. Offline to the online channel

Here the seller starts the business with a traditional retail storefront which eventually extends to have an online presence.

2. Online to offline channel

In this trend, usually, the seller begins with an online presence and then expands by launching a brick and mortar physical store.

Benefits of Multichannel Retailing (MCR)

  1. It assists in overcoming the limitations of store size.
  2. It helps in market penetration.
  3. More active inventory turnover.
  4. Efficiently uses assets.
  5. It offers a wide variety of commodities to buyers.

Example 1: Amazon

Despite being the largest e-commerce merchant in the US, Amazon’s online sales estimate for just 11% of all retail, so opening real-time stores was the way for it to sustain its healthy growth which it did. Amazon now manages all kinds of physical stores ranging from booksellers to convenience stores.

Example 2: Home Depot

Home Depot, the world’s most comprehensive home advancement retail chain. Housing more than 2,200 stores across three different countries the brand employees approximately 400,000 associates.

The company, just by bridging online sales and in-store visits, makes about $100 billion per year. Not only is it the biggest home improvement retail chain but also is the most-visited home improvement website that gets over 250,000,000 visits every six months.

About 50% of buyers who place an order online wish to pick up their order at their local physical store, which is a practice that the company encourages. As a result, the footfall in their existing stores has increased and limited their need to build new ones.

Example 3: Walmart

Walmart Inc., an American multinational retail corporation, runs a chain of hypermarkets, discount department stores and supermarket stores that have their headquarters in Bentonville, Arkansas.

The company functions under many banners such as Walmart discount stores, Walmart Supercenters, Walmart Neighborhood Markets, and Sam’s Club warehouse membership clubs in the US alone.

The brand has an outlet named Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Flipkart Wholesale in India.

Quick Snapshot

  • 11500 – Total Stores
  • 59 – Total Banners
  • 28 – Countries
  • US$514.405  billion (2019) – Total Revenue