Multichannel retailing

Multichannel retailing or Omnichannel is a cross-channel business model that companies use to increase customer experience. The approach has verticals in healthcare, government, financial services, retail and telecommunications industries, including channels such as physical locations, FAQ webpages, social media, live web chats, mobile applications and telephone communication. Companies that use omnichannel contend that a customer values the ability to be in constant contact with a company through multiple avenues at the same time.

History

Up until the early 1990s, retail was either a physical brick and mortar store or catalog sales where an order was placed by mailing it to the merchant or via telephone. Catalog sales for an assortment of general goods started in the late 1800s when Sears & Roebuck issued its first catalog in 1896. Over 20 years later, L.L. Bean started its catalog business in U.S.A. However sale by mail order dates back even further when British entrepreneur Pryce Pryce-Jones set up the first modern mail order in 1861, initially selling Welsh flannel.

In the early 1990s, AOL, CompuServe and Prodigy experimented with selling through their proprietary online services. This was the start of sales channel expansion in a retail environment that had changed little in nearly a century. While general merchants (e.g. the corner store) had evolved to department stores and Big Box, electronic ordering was a whole new frontier. Internet transactions were taking place sporadically, but they weren't secure (e.g., credit cards were passed in the open rather than being encrypted).

This started to change in August 1994 when NetMarket processed an Internet sale where for the first time the credit card was encrypted. Shortly thereafter, Amazon.com was founded and eCommerce sales channel established itself. Mobile commerce arrived in 1997, and multichannel retailing really took off.

Omnichannel's origins date back to Best Buy's use of customer centricity to compete with Walmart's electronic department in 2003. The company created an approach that centered around the customer both in-store and online, while providing post-sales support. Omnichannel was coined as a form of "assembled commerce" and spread into the healthcare and financial services industries.

Outlook

Multichannel retailing is often said to be dictated by systems and processes when in fact it is the customer that dictates the route they take to transact. Systems and processes within retail simply facilitate the customer journey to transact and be served. This is no longer a linear process, but is now due to multiple channels a complicated path to purchase. Pioneers of multichannel retailing include L.L. Bean, Land's End, Macy's, Next PLC, John Lewis and Neiman Marcus, though specialist businesses such as ChannelGrabber have helped make the concept more successful. The pioneers of multichannel retail built their businesses from a customer-centric perspective and served the customer via many channels long before the term 'multichannel' was used.

Multichannel retailing is about selling through a variety of sales channels, but these sales channels are generally independent of one another so they are not integrated; as a result, this rarely provides a consistent customer experience. Integrating the sales channels can be the next stage of retailing which is being as coined as omnichannel retailing (Latin "omnis" = "every/all"). Omnichannel retailing uses of all physical channels (offline) and digital channels (online) to offer a seamless and unified customer experience.

See also

• Multichannel marketing