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Omnichannel vs Multichannel Commerce: What’s the Difference?

Here’s some realtalk on the terms multichannel & omnichannel, ecommerce buzzwords that get tossed around interchangeably but involve vastly different concepts.

The ecommerce space has become somewhat renowned for its overuse of buzzwords and acronyms (headless commerce, BOPIS, webrooming, ugh). The good news is that, while some of these catchphrases may seem complex on the surface, when you dig a little deeper you’ll find it’s easy enough to make sense of their meaning and industry significance. What? You’re busy keeping a growing online business alive, you say? No problem, we’ll do the heavy lifting.

Let’s kick things off with some realtalk on the ecommerce terms omnichannel and multichannel, phrases that have been getting tossed around for the past decade, but are quite frequently erroneously used. Spoiler alert: While the two terms may sound similar, they certainly aren’t the same. And knowing the difference between the two concepts is becoming increasingly crucial for businesses as customer expectations grow and ecommerce expands into new marketplaces and sales channels. So without further ado, here’s the breakdown. 

Multichannel, Omnichannel & the Customer Experience

Both omnichannel and multichannel ecommerce strategies involve selling products and services on more than one physical and digital channel. The significant difference between the two is how the customer experience is unified across those channels.

Multichannel commerce means separate customer experiences by channel.

Multichannel commerce is defined by the use of two or more sales channels with siloed customer experiences.

The traditional multichannel retailer may have a website as well as physical stores. These two channel categories tend to work in isolation and have little integration or interaction with one another. Here are a few examples of a siloed multichannel customer experience:

  • A brand’s physical store has its own stock and sells that merchandise directly to the customer, while its website maintains a separate inventory and sells the associated stock only through digital channels.
  • Purchases made in a brand’s physical store can only be returned in-store. Returns of online orders are not always accepted in-store.

Catch my drift? The multichannel approach results in a customer in-store experience that is entirely separate from their online experience. In essence, these sales channels operate almost like two independent businesses.

Omnichannel commerce means a unified customer experience across channels.

Omnichannel commerce is a multichannel sales approach that provides the customer with an integrated and unified customer experience across each sales channel.

Here’s the deal: Today’s consumers do not dissociate their in-store and online experiences within a brand. They expect to have multiple touchpoints with a retailer, and they demand that their experience from each touchpoint or channel be seamless. Here are a few examples of an omnichannel experience:

  • A physical store’s sales associate uses a mobile device to assist an in-store customer by checking inventory on an item that isn’t available in the physical store, instead placing an online order to have the product delivered to the customer’s home.
  • The brand offers a loyalty program whereby customers can earn points and redeem rewards no matter where or how they are shopping.

In contrast to the multichannel approach of treating each channel separately, omnichannel takes into account that many consumers cross over between channels, and allows consumers to choose their customer journey across all channels and touchpoints, each being equal in importance to the overall customer experience.

If you take one thing away from this piece, let it be this: It’s crucial to make it clear that an omnichannel experience is NOT synonymous with a multichannel experience. Yes, all omnichannel experiences utilize multiple channels, but not all multichannel experiences are omnichannel.

Transitioning from multichannel to omnichannel requires embracing technology.

Making the Transition from Multichannel to Omnichannel

Many businesses offer elements of omnichannel, such as the ability to order online with in-store pickup. However, only a few brands have fully embraced or implemented omnichannel strategies holistically.

In order to truly implement omnichannel across a business, an organization must embrace both technological changes and operational pivots. For a tech stack to be effective, it must be implemented across the entire business and possibly even replace some legacy systems. Apart from the omnichannel marketing technologies, here are a few operational areas for critical consideration:

  • Inventory Management: Without constant inventory updates across channels, brands risk marketing out-of-stock products. Integrating technology that can manage and sync multiple inventory systems in real-time is vital.
  • Point-of-Sale System (POS): Streamline your sales channels by powering your POS with the same back-office order management system that’s driving your online ecommerce channels.
  • Omnichannel Data: An effective omnichannel strategy relies on the consolidation of data from multiple ecommerce platforms, including POS, sales channels, CRM, etc. This approach not only provides insights on how the omnichannel experience is being delivered, but offers a comprehensive view into retail profitability.

There, that wasn’t so bad, right? Stay tuned to the Webgility Ecommerce Blog, as well as our LinkedIn, Twitter, and Facebook channels for further insights that will help high-growth sellers fuel predictable, productive, and profitable results.

Interested in discovering how your business can use technology to embrace an omnichannel approach? Talk to our team today!

Anati Zubia, Webgility VP of Marketing

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