Multi-channel strategies for selling online
8/05/2008 at 00:11
A report by JupiterResearch was released today which examines the issues driving multi-channel online selling. The report was commissioned by ChannelAdvisor. The highlight from the executive summary shows that 75% of online retailers surveyed attributed their online multi-channel strategy as a key contributing factor to their success.
Retailers claim that expansion of online channels are meeting their expectations for increased sales and new customer acquisitions. However retailers using multiple channels should be wary of the strain that running multiple channels places on the business processes.
This is something all those who started out selling on eBay should consider – whilst adding their own website, Amazon, Play.com and perhaps Google adwords and Comparison shopping might sound attractive, over-reaching and spreading your business too thinly across multiple channels may be detrimental to growth if introduced too early.
In order to mitigate the complexity of multiple online channel retailing, 55% of retailers outsource some aspects of the business operations. Almost 70% of those outsourcing attribute increased sales (and 65% increased customer acquisition) directly to their outsourced partners.
One of the most interesting parts of the report showed the percentage of total online sales attributed to the different online sources used.
Direct visits to websites, natural search and paid listings contributed almost three quarters of all online sales. Email marketing shouldn’t be underestimated, contributing 13% of online sales. It’s perhaps one of the lowest cost to implement (especially with shops email marketing tools on eBay). Comparison shopping in contrast was only thought to contribute 3% of sales but is used by 34% of retailers. This is one area the report falls down as it fails to explain why so many retailers use a channel for which so few sales are attributed.
In the UK, 50% of all online buyers use comparison shopping engines, but very few sales can be directly attributed to clicks on comparison shopping engines. This appears to be an anomaly, but in reality, what appears to happen, is that buyers make use of comparisons sites for researching a product prior to making the purchase.
Buyers may note your brand or company name on a comparison site, and then when they are ready to buy either use an Internet Search or simply type in your website URL to make the purchase. Whilst search or a direct visit to your website may be credited for the final sale, a comparison shopping engine could still have been a major influencer in the buyers decision on where to purchase. This is known as an “assist”.
The research is misleading in underestimating the importance of comparison shopping but this is an indicator that retailers are unable to fully track the influence and assist that different channels have on the final click. It’s just not credible for one in two UK buyers to use shopping comparison sites but for them to only generate 3% of sales.
There is a real need for online merchants to be able to track all clicks in the chain which generates a purchase, in order to strategically target advertising dollars. This is where third party outsourcing, to technology companies that can track all clicks from multiple channels leading up to the final purchase click, really pays off.
While the obstacles of both scale and technology need to be addressed the report leaves little doubt that utilizing multiple channels for online retailing is essential for long term success.
Store Your Stuff aka Jade says
9:07 am on 08/05/2008
Great post Chris,
This is an area into which I am now turning my focus, whilst I don’t think that I have completely maximized my sales and operations on eBay yet, I still feel that it’s prudent not to have all my eggs (or shoe racks!) in one basket!
Our website is currently under construction and sales from other channels seem to be improving and slowly gaining on the volume we get from ebay.
I just wish these outsourcing services were a little cheaper to implement. I understand there is a lot of work for both parties (which I have no problem with from my end) but the costs are just so high, it seems to me, that unless you are shifting £1000′s worth of product a day they are not economically viable.
Maybe a different pricing model for smaller e-sellers would be beneficial to the people who provide the outsourcing and those who wish to use it. If these service providers are confident that their offering would improve sales volumes, then they would benefit in the long run when the positive impact of their expertise kicks in.
Chris Dawson says
9:45 am on 08/05/2008
Whilst I firmly believe everyone shoud diversify products/channels you do need to be a certain size to take advantage. The report stated that with less than $1m turnover it wasn’t economically practical to run six or more online channels.
There’s no excuse for not having your own website as well as eBay. The bar for Amazon is slightly higher, but to consider more channels you’d need to be turning £10-£20k/month in my opinion to justify the effort/costs/time.
(I might be wrong there…. if someone has other opinions feel free to post
)
northumbrian says
11:06 am on 08/05/2008
ebay is all we need or use
we dont have a website
and we dont need one
we are in this for profit
not glory
Blighty says
11:22 am on 08/05/2008
we are in this for profit
not glory
It’s not glory North, it’s having your destiny in your own hands.
The next change or the one after that may make ebay become unworkable for you, it’s happening for others, so don’t say “That will never happen to me”, because you just don’t know.
Having other options is the wise move.
Dan Wilson says
12:29 pm on 08/05/2008
The thing is norf, you are quite an unusual beast when it comes to ecommerce. You are probably best advised to remain as a single channel seller because of the nature of the items you sell and the way you operate without a shop using auctions. Although I’m convinced there are ways you can increase traffic and profitability possibly using a content site that taps into your expertise.
But in general, it seems that a multi-channel approach is something that the vast majority of sellers can be benefiting from. I agree that at the lower end it can seem difficult to justify but I’m sure that every powerseller can do something.
It also seems to me that if sellers are looking to grow swiftly, that a multi-channel strategy is vital, especially as eBay continues to grow more slowly than ecommerce in general.
northumbrian says
12:48 pm on 08/05/2008
of course I agree it is what I sell rather than how I sell it.
there is nothing better than ebay, on this planet! or any other planet!
for my type of item,
I believe its the type of goods you market
rather than the the amount of outlets you cover that should dictate your sales strategy
blighty
my destiny is firmly in my own hands
I use ebay
I dont rely on it
northumbrian says
12:54 pm on 08/05/2008
what I mean about the glory and profit bit
is many new to e commerce business feel they are somehow not complete and proper without a web space ,or a trillion third party sites and software programs leeching at their profits,
ebay provides us with more customers that we can cope with, why should we spend more money finding more
northumbrian says
12:58 pm on 08/05/2008
I might add selling is not the problem in my game
finding it at the right price is the trick
Store Your Stuff aka Jade says
2:11 pm on 08/05/2008
Note to self. Find out what the hell it is that Norf is peddling!
Store Your Stuff aka Jade says
2:16 pm on 08/05/2008
Not for “proffesional” reasons, just because I’m a nosey beggar!
Blighty says
2:36 pm on 08/05/2008
If you sell exclusively on ebay, your destiny is any *but* in your own hands.
Imagine a parallel universe where ebay decided to take the theatre in Aberdeen’s word at face value and wrongly suspended you for dealing in stolen items (even though they weren’t).
A scenario that isn’t beyond the realms of possibility.
How would you control your destiny then?
All you can say is that ebay works for you at this present time, with the changes that they can and probably will make you cannot say that with certainty for the future.
stuart says
3:01 pm on 08/05/2008
“ebay is all we need or use”
Well I used to think the same, we built up a good company on ebay with several stores, all postive feedback, DSR’s of 4.8 or above, sales booming each month bigger than the last, just invested over £1000 in new store designs for two of the shops, then BOOM suspended for 12 months, no questions no if’s no buts all gone over something that happened 2 years ago and we didn’t even know about!
That happend 6 weeks ago and we have nearly lost the business as our income was gone over night! I have had to let staff go and cut back and now we are making headway buy using other avenues. We had our own websites but where so busy on ebay we did’nt have time for them. Now in the last 6 weeks we have taken more on our own websites that in the last two years, just by spending the time on them. We are also using other avenues to spread the sales across a number of different ways to protect ourselves in the future.
All I will say to people is, DON’T put all your eggs in one basket, or someone elses basket, we thought we were safe, we couldn’t of even predicted this! SO if you think your safe, still look at other avenues I can’t believe how much we are taking now on our own website and it costs us the same amount of money if we sell £1 or £100000 a month so no escalation of fees!
Stu
Store Your Stuff aka Jade says
3:29 pm on 08/05/2008
Nice one Stu, glad to hear that you are winning your business back, albeit the hard way. As the saying goes, “that which doesn’t kill you, makes you stronger”. It sounds like that particular theory has come true for you. Well Done.
Chairman says
8:13 am on 09/05/2008
Multiple channels is the way to go for sure and recent eBay changes is starting a new migration to alternatives!