Omnichannel vs Multichannel: The Ultimate eCommerce Guide!

Omnichannel and multichannel may sound similar, but they certainly aren’t the same. The distinction between them is becoming more important as customer expectations grow and eCommerce expands to new channels.

While both omnichannel and multichannel retailing involve the adoption of multiple platforms, there are big differences in the way these are used to sell and promote products. Read on to find out everything you need to know about omnichannel vs multichannel retail.

What is omnichannel retail?

Omni-channel retail is defined as a multi-channel sales approach that provides the customer with an integrated customer experience across each sales channel.

Omnichannel retailing puts the customer experience first. It’s not about the needs of your company. Instead, it’s about letting consumers use their preferred channels to buy from your brand.

Rather than treating each channel independently, omnichannel retailing accounts for the fact that many consumers cross over between channels. It recognises that someone may research a product online and then buy it in store. Or that they may check out a brand’s website before converting on their favourite retail site.

It’s crucial to point out that an omni-channel experience is NOT the same as a multi-channel experience. Yes, all omni-channel experiences use multiple channels, but not all multi-channel experiences are omni-channel.

Most businesses have invested in multiple channels (a website, social, email, mobile, IM, physical store etc.) and use them to engage and connect with customers. But very few (78% of retailers admit their consumers do not have a unified brand experience) have managed to provide a seamless experience and consistent messaging across each channel.

What is multichannel retailing?

Multichannel retailing is when a brand uses multiple channels to sell to customers. From a customer experience perspective, it’s positive that a wide variety of channels are available, but multichannel retail often lacks the unified consumer journey that comes with omnichannel retail. It’s common for each channel to work in a vacuum and may feature its own unique messaging, products and perks.

A common example of multichannel retailing is when a traditional bricks-and-mortar retailer sets up an online store. Often, the two channels are treated separately and have different stock, return policies and product pricing in place.

While multichannel retailing allows consumers to buy from a selection of platforms, their experience is not as seamlessly integrated as it would be in an omnichannel retail environment.

For example, shoppers can be disappointed if they see an item online but can’t buy online and pick up in store (BOPIS). If they move from one online channel to another, they will also need to enter their account details and fill up their shopping cart all over again.

The reality is that these kinds of issues are on the rise as consumers use more channels and devices to shop. Right now, nearly 20% of consumers who research a product online end up buying it in store. However, multichannel retailing does allow brands to concentrate on the channels that resonate most with their target audience. Rather than focusing on every channel, they can invest their budget in the ones that matter most.

Omnichannel vs multichannel retailing: the key differences

As outlined above, both multichannel and omnichannel retail involve multiple sales channels. The main difference between them is whether or not these channels are integrated and working in conjunction with one another.

But there are four other key distinctions you should also consider.

1. Customer needs vs company needs

Omnichannel retailing puts customer needs first. It is about allowing them to conveniently make a purchase through their favourite sales channels.

On the other hand, multichannel strategies focus on the company’s needs and capabilities. Brands aren’t active on every channel. Instead, they choose channels based on profitability, branding opportunities and other internal reasons.

2. The capacity required to support every channel

To create a comprehensive omnichannel retail experience, you’ll need to be active on every channel where your target audience hangs out.

You’ll need to provide consistent engagement and create convenient paths to purchase across your website, marketplaces, third-party retailer sites and social networks, like Instagram, Facebook, TikTok and Pinterest.

This might seem like a bewildering prospect, but with the use of a where to buy solution, you’ll easily be able to make all of your content shoppable. You can also use ChannelSight’s content compliance solution to ensure consistency across your retailer network.

3. Omnichannel retail attracts more revenue

Research suggests that brands with strong omnichannel engagement have a customer retention rate of around 89%, while those with weak omnichannel strategies retain just a third of their customers.

According to Forbes, customer-centric brands also tend to take in six times more revenue than competitors that lag behind in optimising the customer experience. That’s probably why the number of companies investing in omnichannel marketing has quadrupled since last year.

4. They require different levels of complexity and investment

Omnichannel retailing doesn’t come easy. It requires much more technological, business and cultural change than a multichannel approach.

Brands will need to invest in visitor analytics, a where to buy solution, content compliance software, stock monitoring tools, omnichannel payment solutions, and updated POS systems. They also need to achieve company wide buy-in, particularly among any staff who work in bricks-and-mortar stores.

Multichannel vs omnichannel marketing

Multichannel and omnichannel marketing involves promoting products across a variety of channels, such as social media, traditional media, retail media, shoppable videos, search engine marketing, and OTT advertising platforms.

Omnichannel marketing should provide a unified experience across all these marketing channels. Customer behaviour analysis should be used to determine which ads will be presented to each person.

Messages adapt and change based on their stage in the consumer journey, or which pages and products they viewed in the past. These relevant messages can help nurture prospects. Once they convert, ads can be personalised to promote customer retention, cross sales, and repeat sales.

Omnichannel marketing can drive conversions and all brands should be looking at how they can implement it. However, tracking customer interactions across every sales channel and marketing platform can be complex. It often makes sense for brands to start with multichannel marketing, which focuses on perfecting the performance of individual channels. Then, they start to integrate all these different platforms to create an omnichannel experience. As everything falls in place more and more channels can be added.

How does omnichannel retail work in practice? A real example

In a nutshell, an omni-channel strategy works by ensuring that whatever a customer does on a brand’s website, directly affects their experience with that brand offsite. Let’s take Leesa mattresses as an example to illustrate how an omni-channel approach works in practice.

Leesa’s omni-channel customer journey looks something like this:

  • A customer goes through the Leesa’s website, adds a queen mattress to her or his cart, but leaves before completing the purchase.
  • Lessa understands that a returning visitor is likely to be more engaged and is probably at the ‘consideration’ stage of the consumer journey. They offer a ‘20% off’ deal if the user signs up to their mailing list
Leesa offer
Leesa capture’s the email of engaged website users with an offer, enabling them to reach them on multiple other channels.
  • Simultaneously, over the course of a week, on Facebook, Pinterest, Instagram, and YouTube the customer is served a series of ads for the same queen mattress and the same “20% off” offer.
  • If after a week the customer hasn’t engaged with either of those “20% off” messages, Leesa automatically switch their approach and start featuring ads (e.g. YouTube pre-roll videos) that highlight their socially conscious side with CTAs asking customers to check out their Giving Back page.
  • The customer sees the video and is prompted to return to Leesa’s website, where this time they visit the king mattress webpage instead of the queen.
  • In response, both a new email and a new set of social ads appear for the user – this time featuring the king mattress and a “$150 off” incentive.
  • This time, the offer works, and the customer clicks through a Facebook ad, fills out her or his shipping information, but at the last confirmation screen decides they’d rather experience the mattress before buying it. So, yet again, they leave the site.
  • Having captured the customers shipping information from their last interaction and detected that they live just a few miles from a Leesa showroom, two days later an invitation to test a king mattress at The Leesa Dream Gallery arrives in the customer’s physical post box.
  • After trying the mattress in-store, the customer finally purchases. Upon purchase the store’s POS system updates the customer’s online account to reflect this.
  • When the customer gets home, a “Thank you” email is waiting in their inbox, followed a week later by an email asking them to review the mattress.
  • If the customer ignores the email to review the product, two days later a Facebook Messenger invitation to review the mattress is sent.
  • This time the customer responds with a 5-star review. So, given the customer is happy with their purchase (and because the last two touchpoints were Facebook Messenger and physical post), Leesa follow up using both channels to send a message outlining their “Refer a friend” initiative.
  • Meanwhile, all ads for Leesa mattresses on social have ceased. In their place, over time, ads for the Leesa blanket begin to appear. And the cycle begins all over again!

As you can see from this example, Leesa have used an omni-channel approach to capture and use  information learned from one sales channel, and use it to inform the brand’s next interaction with the consumer on a different channel – keeping the messaging relevant and the brand experience seamless. Over just a matter of days, the customer has been subjected to a steady release of non-intrusive information designed to give them everything they need to feel comfortable buying a mattress from Leesa.

How do I start transitioning to an omni-channel approach?

Every company will and must develop their own unique omni-channel approach based on their unique business goals, but each company will need to work closely with some key stakeholders to make it a success:

  • Product
  • Marketing
  • Sales
  • Customer Support
  • Customer Success

Including these departments early in the process of developing an omni-channel strategy will ensure each department understands the goals and objectives of your omni-channel initiative. Each department is crucial to the success of the other especially when it comes to an omni-channel approach. A seamless customer journey and experience is paramount, therefore each entity needs to know what the other is doing, why they are doing it, and how that impacts their department.

Ultimately, your approach should be based on a strategic plan (developed with the above stakeholders) to build a coherent, aligned experience across multiple platforms.

Final thoughts

In the omnichannel vs multichannel debate, omnichannel retailing ultimately comes out on top. Although the future of eCommerce definitely lies with omnichannel strategies, it is tough to implement them correctly.

Brands that want to move their marketing and sales in this direction can start by clearly understanding the difference between multichannel and omnichannel approaches.

Brands can introduce a multichannel strategy by selling and promoting their products on every platform that is important to their target audience. From there, this multichannel approach can evolve into an omnichannel one. Brands can bring together the different channels to create a smooth flowing customer experience.

Interested in discovering how your business can start embracing an omni-channel marketing approach? Talk to our team today!