What is Multi Channel Distribution and how does it help a company? (Case study of Ikea & Walmart)
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Multi-Channel Distribution – Introduction
Multi-channel sellers sell commodities or services through many channels. Many retail firms have started to use several channels to communicate with customers.
Aside from their websites, most large shops and catalogue retailers sell their products in both stores and online.
Multi-Channel Distribution – How does it Work?
Offline to Online Channel
The seller establishes a brick-and-mortar shop first and then expands the business to include an online presence.
Online to Offline Channel
The seller typically begins with an online presence and subsequently expands by establishing a brick and mortar facility.
Multi-Channel Distribution – Walmart
Walmart's Ecommerce sales in fiscal 2022 grew by 11%
Multi-Channel Distribution – IKEA
In 2021, IKEA’s online channels witnessed more than 5 billion visitors and online sales increased by 73 percent.
Online sales now account for 26 percent of IKEA’S total sales.
Multi-Channel Distribution – Amazon
Amazon has over 600 physical retail locations.
500 of those locations are Whole Foods stores and the remaining stores include pop ups, convenience stores, bookstores, grocery stores and general merchandise stores.
In 2021, net sales from Amazon’s physical stores amounted to over $17 billion.
Multi-Channel Distribution – Types
Store Channel
Customers may find what they are looking for faster and more efficiently when shopping in an actual store, as opposed to purchasing through non-share channels like the catalogue or the internet. One of the most significant advantages of a shop channel is its tangibility.
Internet channel
The term "internet retailing" refers to the sale of goods and services via the internet. It is also known as internet retailing, electronic selling, and e-tailing.
Catalogue Channel
This entail selling products via a hard bond catalogue or online catalogue – Example - IKEA
Direct selling
Direct selling is the process of interacting with customers in person at a suitable location. These people are taught to discuss product features or describe a service after taking an order.
Television home shopping
A channel type in which products are exhibited on television and customer orders are taken via the phone, internet, or TV remote is known as teleshopping.
Automated selling/ automated vending machines
This type of retail channel offers goods in exchange for cash or the use of a credit card. The items in this form of distribution are pre-stored and then handed out to clients after payment. Vending machines, also known as automated retailing devices, are frequently found at public areas such as offices, schools, metro stations, shopping malls.
How does Multi-Channel Distribution help your Company?
• It helps in overcoming the limitations of store size.
• It aids in market penetration.
• Optimized active inventory turnover.
• Effectively uses assets.
• It provides a large choice of items to purchasers.
This video is on Multi-Channel Distribution – How does it Work?
and it Objectives and it has the following sub-topics.
Time Stamps
0:00 What is Multi-Channel Distribution?
0:16 Multi-Channel Distribution
0:33 Multi-Channel Distribution – How does it Work?
2:18 Multi-Channel Distribution – Types
3:37 How does Multi-Channel Distribution help your Company?