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Take caution to avoid the common pitfalls when starting your multi-channel strategy

With insights from Episode 1 of the new podcast ‘After The Buy Button’ – Dan Dicker, CEO and Founder of Circular&Co is interviewed by Chloe Willcox, Head of Demand Generation at Zendbox.

If the lure of a multi-channel approach has convinced you to take the plunge, then you’ll know the growth potential speaks for itself. Expanding to a new marketplace can help mitigate the risk of a single revenue stream and establish your business in new markets. This strategy however, is often accompanied by growing pains that leave brands walking a fine line; one delayed stock count away from overselling on Amazon and being suspended entirely, and one warehouse mispick away from a bad review on Trustpilot.

Dan Dicker, CEO, and Founder of Circular&Co explains his journey through channel expansion and growth: “Traditionally, the main core of our business was wholesale, where we’d design and make products and then sell them to the classic high street stores and also to distributors abroad. But the market has shifted in the last year and a lot of trade has moved to online platforms. One of the big challenges we’ve had with that shift is growing the B2C side of the business, especially on a global scale, and one of the big areas we’ve been battling with is the operational management software.

“We’ve grown onto different platforms that we’re seeing great success with; we have our own website, but we’re also on Amazon, Etsy, and Not On The High Street, and they’ve been really good channels in terms of sales growth, but you have to integrate them with your operational software. We’ve found a good inventory management software which has helped tremendously but one of the dangers – and a warning for others –  is that whilst it’s easy to see the growth potential of listing on new marketplaces, there are implications.

“If you get it right, you could soon have 100 new orders a day for example, but  you can’t manually enter that onto your system. At some point, there will come a time when you’ve got to automate. You need to factor in the ability to make it seamless, otherwise it does become a logistical nightmare”, Dan Dicker, CEO, Circular&Co.

Dan continues, “We have also found at the back end, once you’ve integrated the channels into your system, you then still have to communicate that with warehouses globally, which can be a challenge as well. They all need to interlink – if an order comes in on Amazon, it needs to come automatically through our system, through the warehouse system in America or Germany, and then when the order is dispatched it needs to come back through the chain and eventually close off back in Amazon.

“We have found there are some marketplaces better than others for this too. Amazon is good and Etsy is good, as they are open pieces of software where you can integrate relatively easily. But Not On The High Street is very precious around access, therefore it becomes really complicated. We ended up having to get third parties in to write bespoke software to actually do the integration, but companies like that do exist so it’s all doable, but it’s something to bear in mind as you migrate onto online platforms.”

So, what are the solutions to tackling the integration challenges before you begin?

Simply summed up, there are two main approaches – both need to be technology-driven to be able to provide you with a clear view of the data running through the system in real time. The first of the two approaches is to use an inventory and order management system that integrates with your chosen platforms. The main advantage of this type of automation software is predominately managing stock levels to prevent overselling, and managing listings across different platforms from one place.

It is important at this stage to think strategically about a few things here:

  • What channels you need now
  • What channels you might like the options to expand to later (for example, are European or US marketplaces more important to your business?)
  • How good those integrations are, will you have to use a third party or does the integration exist as ‘plug in and play’?
  • Are there additional costs to add channels and integrations or is it all included in your subscription fee?
  • Are you looking for other technologies to integrate too? i.e. payment providers, shipping providers etc.

The answers to these questions will help you determine what to prioritise when selecting a software provider. The second approach you should consider is if you also use a 3PL for your ecommerce fulfilment. In which case, you will need to also consider how the information will pass through their warehouse and systems too. Again, considering a 3PL that is technology driven and enables you to bring all these elements together. For example Zendbox provides integrated inventory management systems, so the above is taken care of along side your warehouse, stock and shipping management – with the data displayed to you in real-time as the orders are processed, picked, packed with the addition of further technologies to ensure customer experience standards to the customers’ door.

Realistically, most retailers know that a blended strategy with multiple channels of distribution is the best way to reach consumers where they are most naturally making purchases, so the conversation of how to manage operationally is an important topic. Dan agrees: “Let’s face it – in the US alone, a third of all product searches are directly on Amazon, so you’ve just got to join in and try and make it work for yourself.”

To hear more from Dan and other big brands talking post-purchase operations, listen to the first episode of After The Buy Button now, wherever you get your podcasts.

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