Omnichannel vs Multichannel: The Ultimate eCommerce Guide!
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?
Omnichannel retail is defined as a multichannel 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 during their consumer journey. 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.
With this in mind, an omnichannel strategy aims to remove the boundaries that stop consumers moving between channels or slow down their progression toward conversion. Instead, it creates a unified and integrated experience wherever possible. This means a shopper can go to one channel and pick up where they left off on another.
However, it’s worth noting that omnichannel integration has its limits. For example, you can direct visitors to an Amazon listing on your website, but you can’t link your website on Amazon.
It’s crucial to point out that an omnichannel experience is not the same as a multichannel experience. Yes, all omnichannel experiences use multiple channels, but not all multichannel experiences are omnichannel.
Most businesses have invested in multiple channels, such as websites, social media, email, mobile, IM, physical stores and so on, and use them to engage and connect with customers. But very few have managed to provide a seamless experience and consistent messaging across each channel. In fact, 78% of retailers admit that they don’t provide a unified experience.
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 it 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, most product searches begin on Amazon or Google. Yet, nearly 20% of consumers who research a product online end up buying it in store.
This behaviour sees consumers constantly switching channels before converting. So the appeal of an omnichannel approach is clear. However, multichannel retailing allows brands to concentrate on the channels that resonate most with their target audience instead. 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 five 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 and switch between them as they please.
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 resources 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.
To do this, brands need to invest in IT infrastructure, tech savvy staff and a comprehensive tech stack, which includes tracking solutions, a Where to Buy solution, a Digital Shelf solution, digital asset management tools, omnichannel payment solutions and updated POS systems.
While multichannel retail also requires lots of software tools, the investment involved won’t put as much pressure on your resources.
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.
That’s probably because omnichannel retail makes it easier for customers to check out products again and again – whether they’re doing the weekly shopping on Walmart, ordering something with Amazon Prime or arranging a pick up at their local store.
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 in recent years.
4. The demand placed on your team
Omnichannel retailing doesn’t come easy. It requires much more technological, business and cultural change than a multichannel approach.
To succeed, brands need to achieve company wide buy-in. Adjusting to omnichannel retail can be difficult, particularly for staff who work in brick-and-mortar stores or warehouses. Managers of particular channels may also resist changes. For example, the person in charge of your webstore may be reluctant to drive visitors to other sales channels as it may negatively impact the KPIs they have worked hard to build up.
5. Consistency vs. flexibility
Because all channels are interconnected, it is necessary for omnichannel brands to provide consistent information and branding across all platforms. Multichannel retailers, on the other hand, have more flexibility. They can tweak their content to suit the demographics of each channel or run campaigns and competitions just for Facebook or TikTok. This allows them to refine their messaging and speak directly to different personas.
Multichannel retailers might also feature varying price tags, products and promotions on different channels. For example, D2C fashion brand La Ligne sells exclusive products at its physical retail stores to attract people through the doors – where no other brands can compete for their attention. Conversely, multichannel brands like Apple and Boots offer online exclusives.
Multichannel vs omnichannel marketing: Which is best for you?
Both 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. Needless to say, using multiple channels to promote your products makes it easier for customers to find them. But which one should your brand adopt?
Omnichannel commerce will attract more sales
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 merchandising, and repeat sales.
Omnichannel marketing can drive conversions and all brands should be looking at how they can implement it. In fact, research from Harvard Business Review indicates that omnichannel customers usually buy 10% more than single channel ones. However, tracking customer interactions across every sales channel and marketing platform can be complex.
Multichannel retail makes sense for startups
Brands don’t necessarily have to pick between omnichannel or multichannel commerce. It often makes sense for brands to start with multichannel marketing, which focuses on perfecting the performance of individual channels before integrating all these different platforms to create an omnichannel experience. As everything falls in place, more and more channels can be added.
Multichannel retail is often sufficient in the early stages of a business when building brand awareness is the priority. Plus, it’s best not to pursue omnichannel retail until you have sufficient resources, manpower and customer data available.
Omnichannel is better for brands that want to focus on engaging shoppers who already interact with their business and need to move through the sales funnel toward conversion.
A lot depends on the infrastructure currently in place
An omnichannel strategy is essential for brands that are running physical retail stores because consumers have come to expect services like click and collect, curbside pickup and store stock checks.
However, when it comes to multichannel vs omnichannel retail, there are key organisational differences. With multichannel retail, different channels may have their own supply chain arrangements and departments. For example, a brand’s eCommerce site might have its own warehouse, stock management system and staff, while its brick-and-mortar stores might have different ones.
To implement an omnichannel strategy, all these elements have to be connected. This is one of the most difficult and expensive aspects of achieving omnichannel retail, so the supply chain system you currently have in place may influence your decision.
How omnichannel retail works in practice? 3 examples
In a nutshell, an omnichannel 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 a look at how three leading brands put omnichannel eCommerce into practice.
1. Leesa Mattresses
Leesa captures the email addresses of website visitors by offering them generous discounts for signing up. If one of these visitors adds a mattress to their shopping cart, but leaves before converting, they will then be retargeted with relevant ads on Facebook, Pinterest, Instagram, YouTube and any other channel associated with that email address.
After a week, if the prospect hasn’t converted, Leesa automatically switches its approach and starts to serve up ads that showcase its socially conscious side. If someone engages with Leesa’s website once again, the ads and incentives they are shown will adapt accordingly.
Leesa capture’s the email of engaged website users with an offer, enabling them to reach them on multiple other channels.
As you can see from this example, Leesa has used an omnichannel approach to capture and use information from one sales channel to inform its next interaction with the consumer on a different channel – keeping the messaging relevant and the brand experience seamless.
2. Crate & Barrel
To enable customers to continue their journey – even when they switch devices – homeware store Crate & Barrel encourages customers to sign into their online accounts so that they can easily access their shopping carts, browsing history, wish lists and orders whatever device they use.
This move makes life easier for the brand’s audience, who tend to browse the Crate & Barrel catalogue on mobile before checking out on desktop. As well as improving the UX for visitors, introducing this omnichannel feature has also helped reduce cart abandonment.
Electronics brand Logitech uses a Where to Buy tool to add ‘Buy Now’ buttons to its website product pages. This allows visitors to see all the retailers that have a particular product in stock. Logitech can prioritise which retailers appear first based on partnership agreements, pricing, product ratings or stock availability.
The likes of BestBuy, Amazon and other popular electronics retailers generally appear first. This streamlines the customer journey by allowing shoppers to easily check out on their preferred sites. Similarly, big brands like Mentos, Duracell and Hoover use Where to Buy technology to check stock at their nearest brick-and-mortar locations.
These are just three examples to inspire your approach. However, there is no one-size-fits-all solution when it comes to setting up omnichannel retail. There are countless ways brands can facilitate these journeys. It all depends on the channels you use and the needs of your audience.
How do I transition to an omnichannel approach?
Every company must develop their own unique omnichannel approach based on their unique business goals, but there are some boxes that should always be ticked along the way.
1. Analyse your customers
Before getting started, it’s essential to understand your audience’s wants, needs, expectations, budget, behaviours and pain points. What channels are they active on? Do they have Amazon Prime or do they like to check out with social commerce?
The more you know about your customers, the better your omnichannel experience will be.
2. Get cross-departmental buy in
Each company will need to work closely with some key stakeholders to make it a success, including product, marketing, sales, support, customer success and logistics teams.
Including these departments early in the process of developing an omnichannel strategy will ensure each department understands the goals and objectives of your omnichannel initiative. Each department is crucial to the success of the other, especially when it comes to an omnichannel 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. Efficient communication and collaboration is key. To achieve this, you need to ensure your team is equipped with the training, tools and technology needed to facilitate cross-department workflows.
Ultimately, your approach should be based on a strategic plan (developed with all the above stakeholders) to build a coherent, aligned experience across multiple platforms.
3. Carefully select your omnichannel software tools
Empowering your sales, marketing, support and fulfillment teams with the right tools is essential. Highly integrated PIM software, CRM systems, content compliance tools, marketing automation, and inventory monitoring tools are all key.
Look for software that features built-in integrations, API integrations and high quality analytics reports.
4. Prioritise data security
Leveraging data from across your CRM, POS and other platforms is key to omnichannel success. However, it is essential that brands reassure customers that their private data is being treated with care.
Put in place a policy for storing and sharing customer information securely – and then tell your customers about it.
5. Perform lots of UX testing
With so many touchpoints and crossovers, a lot can go wrong with your omnichannel journey. That’s why it’s essential to frequently test the user experience and run through all the possible journeys your shoppers can take.
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.
Then, they can introduce each channel and, slowly but surely, take steps to integrate them.
Omnichannel services are particularly important when it comes to your support channels, as disconnected channels can be extremely frustrating for customers. They don’t want to waste time repeating information. So this is a great place to start when implementing an omnichannel strategy. With a cloud-based CRM tool, it’s pretty easy to achieve too.