The Legler Marketing team has been examining this question more closely to get to the bottom of what really lies behind this modern term.
First of all, we found out that books don’t give any precise definition of the term. Marketing expert, Yvette Schwerdt, who some may have seen at the Global Toy Conference at Nuremberg’s Toy Fair, put it this way: „Multi-channel integration is the umbrella term for the three business development levels that include multi-channel retailing, cross-channel retailing and omni-channel retailing.“ Therefore, multi-channel integration is simply the combination of these three marketing strategies.
What does this mean for distributors in the toys and games industry?
Level 1: Multi-channel retailing
The first level of business development, multi-channel retailing, involves direct sales to end customers, via two or more distribution channels that are aligned with one another.
e.g. A toy distributor runs both a physical store and an online shop, or sells products via a catalogue alongside in-store sales. The customer can choose to purchase online or in-store or via the catalogue. One of the most common scenarios in this situation is gathering information in-store before making a purchase online.
It is critical that the different distribution channels, for example, physical store and online shop, are aligned with one another, which means having no difference in pricing, a virtually identical offer and simultaneously updated stocks. However, each channel uses separate technological systems behind the scenes.
Level 2: Cross-channel retailing
The second level of business development is the extension of „multi-channel retailing“. This involves the combination of the different distribution channels, which means that customers can switch between different channels during the purchasing process.
e.g. A customer orders a product via the online shop and picks it up the next day from the store.
Similarly to the case of multi-channel retailing, although the different distribution channels are aligned with one another, the technical systems behind each channel are distinctly separate.
Level 3: Omni-channel retailing
The third sales level is the icing on the marketing strategy cake. All distribution channels used blend together in omni-channel retailing. All customer and product data (e.g. stock levels) is centralised and processed by just the one technological system.
No matter which channel they use, customers experience a personalized purchasing process and, again – regardless of the channel – have access to the entire range and the combined stocks.
e.g. A customer orders a product online using his smartphone and picks the item up in-store the next day. When he picks up his purchase, he makes the most of his store visit to exchange an item he bought recently online. He has already paid for the item ordered online using PayPal. The customer receives a refund by way of a voucher to be used in the store.
He notices an in-store advert and would like to buy the product advertised using his refund voucher, and take it home with him. The product is out of stock in the store on this day, but an in-store internet terminal allows the customer to order the product, pay with his voucher and have the item delivered to his home.
Without a doubt, omni-channel retailing provides end customers with an identical offer via all distribution channels, simultaneously. The end customer can spontaneously decide for himself which channel he will use on one particular day and can simultaneously shop/register a complaint/benefit from offers across all distribution channels.