There is often some confusion when trying to differentiate between multichannel and omnichannel eCommerce, and as a result the two terms are often used interchangeably – but the two strategies are not the same, and here we give you the nine key differences.
We also outline how these two models operate differently in practice, which is more popular with consumers, and how omnichannel and multichannel inventory management differ.
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What is the difference between omnichannel and multichannel eCommerce?
The key difference between these two strategies is that in a multichannel approach, a company focuses on customer engagement using multiple independent channels to attract customers to their brand. The omnichannel approach also uses multiple channels, but all channels are integrated with each other. The focus of omnichannel is to provide seamless customer experiences across all channels.
Multichannel eCommerce is the practice of listing goods on more than one channel, employing different platforms or marketplaces. For traditional businesses the channels can be digital, physical or a combination of both. Multichannel strategies seek to be in every channel to have the best chance of acquiring the maximum amount of customer engagement.
An omnichannel approach also uses multiple channels yet relies on data collection from one channel being communicated across various channels. This is to ensure that the customers’ experiences feel unified whenever and wherever they are interacting with a brand.
- What is the definition of ‘channel’? A channel is any medium through which a company can communicate with consumers, such as a website, social media platforms, billboards for marketing purposes, email, phone calls, and chatbots for customer service activities.
How are omnichannel and multichannel eCommerce different?
While certain aspects of omnichannel vs multichannel appear to be similar, crucial differences between the two will affect which of these you choose as your eCommerce model:
1. Omnichannel is more customer-centric than multichannel
While multichannel gives the user access to a variety of communication options, each channel is generally not connected. With omnichannel there are multiple channels, but all channels are connected. allowing consumers to move between them seamlessly, and providing an enhanced customer experience.
2. Omnichannel provides a better customer experience than multichannel
Multichannel focuses on having many channels to engage customers, providing them with a choice of channels to purchase from. Omnichannel concentrates on the customer, improving the customer experience by providing an immersive and singular experience. While omnichannel customers can still make purchases from multiple channels, the boundaries between sales and marketing are removed.
3. Omnichannel is more convenient for shoppers
Multichannel customers may use different channels for different purposes, such as customer service enquiries or returns. Moving from one channel to another, the customer in a multichannel environment will have to start searching or researching from scratch and repeat information – and is therefore more likely to be left frustrated.
Omnichannel provides a similar variety of channels for customers, but the connectivity of the channels provides a convenient and streamlined experience, and data exchange regardless of the channel being used.
4. Data is synchronised with omnichannel
Omnichannel eCommerce – unlike multichannel – syncs customer data and product information across channels, so intelligence is gathered, matched, managed and enhanced. This ensures that customer data collection becomes a central source of truth, continuously updated from every interaction – and this can then be used which can and used as a tool for targeted and personalised customer communication and promotions.
5. With omnichannel you can achieve better data collection
With multichannel eCommerce, important data is often owned and maintained by different teams across the various channels. By contrast, omnichannel focuses on the integration and interaction of channels with each other and across numerous consumer touchpoints. A data-driven approach improves forecasting ability, meaning omnichannel offers significant benefits over multichannel.
6. Omnichannel ensures consistency across channels
Multichannel operates each channel independent of others, creating stylistic inconsistencies between the channels and inconsistency in consumer messaging. Omnichannel offers consistent messaging that avoids miscommunication across channels and a consistency of style – regardless of the channel(s) chosen by consumers.
7. Omnichannel is more effective for sales than multichannel
Omnichannel places the customer at the centre of everything, focusing on the customer’s needs and providing personalised messaging in a seamless, unified experience. Customers have easy access to information from any of the channels and are more likely to make repeat purchases from companies that maintain continuous unity between eCommerce channels.
8. Omnichannel makes processes more efficient
Multichannel operates in silos which impacts the workflow efficiency of multichannel teams. Without access to consolidated client information customers may get bombarded with overlapping campaigns from the various channels. This is not only duplicates work but can be annoying to the customer. The speed and convenience of omnichannel and ease of navigation between channels help to gain and retain omnichannel shoppers because it is designed to make the shopping experience as easy and efficient as possible for the customer.
9. Omnichannel allows you to continuously adapt your approach
For omnichannel eCommerce to provide a flawless customer experience, it needs totally connected systems and cohesive integrated technology. Contemporary software systems offer a range of solutions with the flexibility to adapt and grow with the business.
On the other hand, technology implemented in a multichannel business operates solely within the individual channels. While there may be some level of integrated software within one channel, this is not true of all channels and any integration does not transfer across channels.
The complexity of omnichannel vs multichannel means that it is much harder to set up and the investment is higher. However, omnichannel eCommerce results in greater efficiencies and an improvement in customer service. It also improves customer retention and brand loyalty due to increased customer engagement.
Omnichannel vs multichannel: how these approaches work in practice
Multichannel increases brand visibility across several consumer touchpoints, enabling businesses to tailor marketing and communication activities to specific channels.
Here customer engagement is a primary focus. For example, a social media channel concentrates on growing the number of followers or to increase likes, comments, and shares. At the same time, digital and print advertising focuses on keeping the brand front of mind and on driving more traffic to a website.
The multichannel approach in practice
In practice the multichannel approach has a disconnect between channels because they are independent of each other.
An example of this is Starbucks:
- Starbucks operates under a multichannel marketing strategy heavily centred on its loyalty rewards program. The strength of Starbucks’ perks has enabled the company to cultivate fierce loyalty among its rewards customers and encourage more frequent purchases. Starbucks also sells its coffee products through online marketplaces and brick-and-mortar stores. These channels operate completely outside of the café operations, and purchases made via these channels do not offer the same rewards and incentives.
The omnichannel approach in practice
The omnichannel approach is about improving the experience of people already engaged with the brand. Customer experience is the primary focus through developing a consistent and enhanced experience for customers regardless of what channel they are using.
An example of this is Warby Parker:
- When someone visits the Warby Parker website to search for eyewear, the website chatbot advises the customer of three ways they can try out the eyewear frames: in store; virtually via the brand app; or by ordering frames to try on at home. The customer then switches channels from the website to the Warby app to virtually try on frames. The app highlights any frames the customer had interacted with on the website, and the app chatbot will continue the same conversation with the customer that had begun on the website. The customer experience is streamlined, integrates across channels, and the customer does not have to start from scratch at every channel or touchpoint.
Omnichannel vs multichannel: Which is more popular with consumers?
Omnichannel is increasingly more popular with consumers because this strategy makes it easier for the customer to complete their online journey. Omnichannel provides a better customer experience, allowing customers to shop where, when, and how they want to. Over 70% of instore shoppers say that using mobile devices for research in-store is an important part of their physical shopping experience
An effective omnichannel strategy helps organisations to deliver a cohesive and consistent brand experience across all sales and marketing channels – and when it’s effective, it removes the discord for customers moving between channels and from one touchpoint to another.
When should you choose omnichannel or multichannel?
When deciding on whether to implement an omnichannel or multichannel strategy, there are several factors to consider, including:
- How your eCommerce operation is already set up
- Your budget and other resource considerations
- Your marketing strategy
- Growth plans and forecasts
Companies choose a multichannel strategy for many reasons, the primary one being the relatively low cost of entry. Multichannel involves selling goods and/or services across multiple channels, including eCommerce sites, marketplaces such as eBay, Amazon and Catch.com in addition to the business’s own social channels and brick-and-mortar stores.
With multichannel a business can reach new customers quickly to increase brand awareness and product visibility. It is possible to tailor messaging, promotions, and customer service to each channel. Multichannel helps to reduce risk through diversification, and it is relatively easy to remove the brand from underperforming channels.
On the other hand, omnichannel has clear benefits for businesses, so while it’s harder to implement, it may be worth investigating. Start-ups and SMEs without either an omnichannel or multichannel strategy can more readily progress into omnichannel by implementing integrative technology and software solutions that adapt and grow with the business.
It is more difficult to transition from multichannel to an omnichannel experience. So if you are currently operating under a multichannel strategy, the transition will be slower. It will require significant investment to integrate all platforms and to train and upskill staff.
How is omnichannel inventory management different from multichannel inventory management?
Inventory management presents its challenges regardless of whether you are operating in omnichannel, multichannel, a single eCommerce site or brick-and-mortar store. Robust inventory management solutions are crucial for the successful implementation of an omnichannel or multichannel strategy. It’s important to ensure you have the right inventory software systems and solutions that are capable of handling multiple sales channels.
Multichannel inventory management
Multichannel inventory management needs to manage complex multichannel capabilities such as dropshipping and order fulfilment from multiple suppliers. The demands of multichannel businesses are inventory-level-dependent, with a linear relationship of the inventory stock levels of the various channels. Multichannel inventory management requires a scalable platform that easily integrates with both current and new platforms as you grow.
Serving the buying habits of your customers is possible through a multichannel sales approach. Maintaining accurate inventory levels is a major challenge to multichannel businesses, and the right inventory management is essential. When selling products simultaneously through multichannel, automated inventory control will help prepare businesses for unexpected sales peaks and to avoid inventory shortages. Inventory software solutions will mitigate the risk of stock-outs and inaccurate inventory valuation, helping to streamline fulfilment processes.
Omnichannel inventory management
Omnichannel inventory control has many moving parts, so automated technology solutions are critical to facilitate a streamlined process and ensure order fulfilment is synced across all channels.
The ability to identify sales patterns across channels allows for more proactive ordering decisions and optimisation of inventory levels at each location. This is where omnichannel inventory control comes in, providing inventory visibility across channels and departments, making omnichannel inventory processes more efficient and cost-effective. Without inventory visibility in your omnichannel business, accurate reporting and order tracking becomes cumbersome and pick, pack, and shipping processes are prone to error.
Omnichannel shoppers want a seamless shopping experience, and an omnichannel inventory management system connects and integrates different ends of your supply chain, including the ability to integrate with accounting, channel management, and shipping software.
As consumers continue to control the where, when and way in which they shop, it is crucial that businesses match customer preference and customer service experiences with an optimised inventory management platform to service expectations.