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Omnichannel vs. Multichannel - What's the Difference?

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Gareth Cuddy

It’s no secret that modern ecommerce success requires brands to use various channels to stay in front of their customers. 

Recent research shows that 86% of customers move between at least two channels when interacting with a brand. They compare prices online, even when they shop inside physical storefronts. Almost all do their research ahead of time and throughout their buying journey. 

 

Ecommerce brands that offer consistent, high-quality digital experiences across every channel tend to stand out among their competitors, but there are a few ways to go about this. Different brands incorporate different strategies, the two most common being omnichannel and multichannel. 

 

These strategies have become so common that their names are practically buzzwords in the ecommerce industry. With popularity like that, the nuanced differences can get lost. Sometimes people use the terms interchangeably since the two do overlap quite a bit. 

 

Nonetheless, major differences do exist between omnichannel and multichannel, and knowing the pros and cons of each method will help your online business make a more informed choice when developing your strategy.  

 

What is Multichannel?

A multichannel approach focuses on the best ways for online businesses to list, market, and sell their product across various channels. Every channel functions as a unique, separate space for your company to communicate or engage with your customers. 

 

For most ecommerce businesses, customer engagement includes an opportunity to purchase. Think of things like your digital marketplaces, your company’s website,  and every individual social media account you use. All of these serve as different channels, and a multichannel strategy emphasizes the optimization of each channel as a stand-alone piece.  

 

Let’s take a fictional furniture store as an example. They might list a chair for purchase on their website, on Amazon, and on Facebook Shop. These individual channels don’t necessarily interact with one another in any meaningful way. Instead, each one stands as a unique buying opportunity for the customer. A multichannel strategy works best when the customer can interact with the product on the channels they use most.  

 

What is Omnichannel?

An omnichannel approach operates in a similar fashion, but there are some unique aspects to the strategy. While it, too, uses various channels, it focuses on uniting the multiple channels together, as opposed to keeping them siloed. This strategy can feel more complex, so let’s take the fictional furniture store as an example again.

 

On the company’s website, a customer adds the chair to their cart before abandoning the purchase. The company has set up targeted ads on Facebook to showcase the same chair with a discount deal to the customer. The same thing happens with Amazon’s sponsored ads and maybe in an email, too. 

 

As time progresses, the targeted ads continue to pop up periodically, but they adapt to the customer’s journey. If the customer revisits the website and checks out a different product, the ads start showing that product instead. They may even redirect the subject of the ad. Instead of promoting the product itself, the ad might showcase a nearby storefront where the customer can try out the product in person. These adaptations go on until a purchase is complete, and then a new set of campaigns begin that promote something like an accompanying piece to the item purchased. 

 

Pros and Cons of Omnichannel 

Either strategy can bring positive results to an ecommerce brand. They both help online businesses reach their customers in various ways, but both have their shortcomings as well. Ecommerce companies looking to improve their sales strategies don’t need to think about which is better. They just need to decide which fits with their overall business plan. 

 

Creating a consistent, seamless customer experience is one of the biggest advantages of an omnichannel strategy, especially in a time where 90% of consumers expect consistent interactions across all channels. The way omnichannel weaves in and out of the customer’s regular digital usage makes the interactions so consistent that the customer hardly notices. Shopping becomes intuitive in a way, part of what the customer does when they use social media or browse aimlessly on the internet. 

 

The results of these seamless experiences are incredible, too. One study found that omnichannel sales led to a 287% higher purchase rate than selling on a single channel. Not only that, but omnichannel customers have a 30% higher lifetime value. The strategy clearly works when functioning properly. Getting it to that level, however, poses quite a challenge. 

 

Brands have to be incredibly methodical when developing their omnichannel strategy. They need to know their customers well enough to anticipate their next move, and they need to ensure they don’t bombard them with too many ads. The whole experience needs to be consistent and seamless across each channel. Even minor bumps can cause the whole project to flop.  Keeping up with these campaigns and following the customer through their buying journey may be more than many online businesses can handle. 

 

Omnichannel can be especially difficult for brands transitioning into the digital world from a traditional retail setting. Making the jump from a single channel to multiple is hard enough. Throw in the technical expertise to gather data and run the sophisticated campaigns necessary for success and you have quite a challenge. It takes full commitment, so if your brand wants to make the leap into omnichannel, secure the resources and buy-in to make it happen.

 

Pros and Cons of Multichannel 

Multichannel sales can be a great way for businesses to embrace some of the advantages brought by omnichannel without the intense investment needed to plan complex campaigns. 

 

This isn’t to say that the multichannel approach is easy. Brands still need to stay aware of their customers’ needs and respond to them, but there is a little bit less emphasis on a seamless experience across each channel. Instead, multichannel works best when brands optimize and replicate the individual experiences for each channel. 

 

If you’ve got high-quality product images and helpful videos on your website, include them on your Amazon page or other channels as well. No channel should offer the customer a less-than-stellar experience. 

 

For some online businesses, the best way to ensure that happens may require them to limit the channels they use. Only 9% of marketers say they can consistently engage their customers effectively across all their channels. Struggles like this can be a product of brands going too big too quickly, so cutting out unnecessary channels can help you target your team’s effort towards the right ones. 

 

You don’t have to prioritize every possible channel. Find the channels your customers actually use and meet them where they are. Putting extensive effort into a channel that brings no return isn’t worth it, and you can repurpose that energy to improve the channels that work effectively. 

 

The Key Ingredient to Both Strategies: Visible Data

Regardless of your online business’s preference for omnichannel or multichannel, you will need information on how your products perform across the various channels. How is each channel performing? Where do the largest sales come from? What does inventory look like? Which items sell best?

 

Managing all this information can be one of the most frustrating parts about selling across various channels. Each one has its own dashboard, forcing managers to click through multiple tabs to get a holistic view of the bigger picture. 

 

StoreAutomator exists to simplify this problem. Our reporting dashboard empowers online businesses to track the success of each channel in one dedicated space. Users can customize their fields or map product data according to the fields and categories required of each unique marketplace. The platform empowers online businesses to list products across multiple channels, manage orders and inventory, and gather insightful data that can guide you when developing future strategies.

 

Consumers don’t shop in a single place anymore, so why should your online business limit itself to one channel? Embracing an omnichannel or multichannel strategy empowers you to stay in front of your customers by offering consistent, high-quality experiences no matter where they encounter your brand. 

 

If you’d like to hear more about how StoreAutomator can provide insights into your various channels, reach out to us today.


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