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The Advantages of a Multichannel Distribution System

The big lesson from COVID-19 for business arguably is the importance of digital channels and diverse revenue sources. Thanks to lockdown measures and social distancing, businesses that lacked these two key components found it tough sledding.

A multichannel distribution model is essential for success and future growth in the post-COVID business world.

To embrace multichannel distribution, businesses must be agile and flexible. They need to satisfy B2B and B2C demands for omnichannel communications and buying options while also ensuring that their own supply chain processes are streamlined and efficient. And they must think strategically, evaluating channel expansion opportunities and understanding where their customers are, what type of products they want to buy, and how their business is run.

Explore Solutions for Distribution

There are five main benefits to multichannel distribution:

1. Increased customer base and wider markets. A multichannel distribution strategy’s flexibility and agility enable businesses to reach a broader customer base and gain access to untapped market segments and expanded geographical reach through a seamless blend of brick-and-mortar retail, e-commerce, and sales and marketing functionality.

2. Better customer engagement and increased availability. Customers are increasingly demanding better and more consistent buying experiences at every touch point, and they want what they want where they want it. Multichannel distribution enables businesses to be where the customer wants it.

3. Increased income. Reaching a broader customer base and new markets will help boost revenue, and serving both existing and new customers better through multiple, agile channels will bring in more sales opportunities.

4. Maximize the supply chain. Multichannel distribution ensures that the supply chain is optimized from front-end sales through fulfillment, and at all points in between.

5. Minimize risk. Relying on a single distribution channel is a major risk. By expanding distribution into multiple channels with different areas of reach and expertise, businesses can greatly reduce risk.

Invest in a Multichannel Distribution Platform

Once a business has built a multichannel distribution strategy, it needs integrated ERP to enable a holistic view into sales, customer profiles, and fulfillment processes in this multichannel environment. Such an integrated platform will increase sales and deliver a higher rate of customer satisfaction as customers can get a seamless experience in every channel.

Businesses can update inventory availability across channels as transactions occur. They can fulfill orders automatically through workflows, no matter what channel they come in from. They can push consistent product information across sales channels. Integrated ERP also connects systems with external suppliers to fulfill inventory needs.

If businesses have siloed infrastructure, with different systems for each sales channel, that makes everything overly complex. You’d have to manage multiple systems and processes, each in their own silos, and would lack a single view of product inventories and the customer’s journey.

One example is U.S. inner tube distributor, Countrywide Tire. It embraced SAP Business ByDesign, a cloud-based ERP solution, because of its scalability and broad support for custom configurations designed for the distribution sector. The company estimates it saves $11,000 a year in IT costs thanks to the increased efficiency, productivity, and revenues the ERP platform delivers. Countrywide was able to scale down from 32 to 21 employees thanks to automation—and, most importantly, the company has expanded from its previous exclusive B2B model to include direct consumer sales.

Cloud ERP: The Backbone of a Multichannel Distribution System

Investing in an integrated ERP system will enable you to monitor, manage, and trace multiple channels in real-time, which is critical for managing risk. An ERP system is a valuable tool for ensuring that the most cost-effective and efficient channels are optimized for distributing products and services at the appropriate time.

Cloud-based ERP platforms like SAP Business ByDesign serve as the backbone of for businesses aiming for a digital transformation and support dynamic enterprises that need insight and real-time visibility from integrated systems. SAP Business ByDesign is designed to appeal to a range of budgets and can support specific sectors.

Having outdated, siloed systems will waste time for employees who must manually enter duplicate data from each sales channel, risking errors and losing real-time visibility. This will lead to lost sales opportunities when inventory is out of stock, and an inability to get insights for making decisions in real-time.

Cloud-based ERP brings complex data from various functions and customer touch points into a holistic view that makes your whole business transparent. Finding a comprehensive ERP system and trusted partner to assist with implementation is a quick win when you’re pursuing a multichannel distribution strategy.

By taking advantage of the flexibility, automation, and granular management and control ERP solutions offer, businesses can easily diversify and pursue new and exciting distribution channels to engage with customers wherever they are.

Get help putting the right foundation in place for multichannel distribution. Download our free ERP Evaluation Guide for selecting the right ERP system for your business.

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