Multi-channel Distribution

Multi-channel distribution involves a business using more than one type of distribution channel.

Multi-channel distribution is increasingly common. For example, a high street retailer might now also distribute directly to customer using e-commerce and perhaps also using catalogues sent via direct mail. A manufacturer might use indirect channels such as retailers and distributors as well as selling directly to customers using e-commerce.

Apple is a great example of multi-channel distribution in action:

The main benefits and potential drawbacks of using multi-channel distribution include:

Benefits of Multi-channel Distribution

• Allows more target market segments to be reached
• Customers increasingly expect products to be available via more than one channel
• Enables higher revenues – e.g. if retail outlets have no stock, but customer can buy online

Drawbacks of Multi-channel Distribution

• Potential for channel “conflict” –e.g. competing with retailers by also selling direct
• Can be complex to manage
• Danger that pricing strategy becomes confused (in the eyes of customers)