In a fast-paced digital world, when customers are more digitally engaged than ever before, selling on a single channel like only one of the eCommerce platforms is not enough anymore. Businesses have to figure out how to reach customers across different channels. That’s where two strategies come into play: multichannel vs omnichannel. These terms might sound similar, but they actually have some important differences that can make a big impact on your business.
However, what is the difference between omnichannel and multichannel? This article will cover these two concepts and how they differ:
- What is multichannel?
- What is omnichannel?
- What is the difference between multichannel and omnichannel?
- What are the multichannel and omnichannel examples?
- Multichannel vs omnichannel: Which one is right for your business?
Let’s first explore what each term means.
What is Multichannel?
By definition, multi means many. Multichannel refers to a business strategy that utilizes several different channels, such as physical stores, social media, eCommerce platforms, or marketplaces, to reach new customers and sell products. For example, at the same time, brands create fun and engaging content on social media and optimize their search ranking on top marketplaces like Amazon or eBay.
A principle of marketing: Be everywhere your customers are. Nowadays, as customers are active on multiple channels, brands need to be present on multiple channels. A multichannel approach helps businesses to have more touchpoints to reach and connect with potential customers, which potentially increases their leads and then sales. This diversity of channels also allows your brand to avoid spamming customers with a bunch of messages all day long on the same channel.
Multichannel activities usually include multichannel marketing, multichannel retailing, or multichannel selling. While multichannel marketing covers the whole customer journey, multichannel retailing or selling focuses on building sales channels on different platforms.
Moreover, in each stage of the customer journey, your brand also can choose different channels to leverage the strengths of each one. For instance, you can use social media and email marketing to promote your brands in the awareness stage. As for selling, you can list your products on various sales channels, including physical stores, eCommerce stores (e.g. Shopify, WooCommerce), and marketplaces.
Pros and cons of multichannel
By implementing a multichannel strategy, your brand gets more chances of reach and sales. However, more channels mean more management. Let’s see the pros and cons of the multichannel strategy.
What is Omnichannel?
Omnichannel is a strategy in which all of the brand’s channels are integrated to create a consistent experience for customers across all channels, platforms, or devices. For instance, with an omnichannel approach, customers can switch from Facebook Messenger to a live chat on the company’s website, receiving uninterrupted support throughout their journey.
All channels in omnichannel marketing need to be integrated. This eliminates the barriers between channels and offers a seamless customer experience. An omnichannel strategy involves multiple channels. Therefore, all omnichannel activities can be seen as multichannel. However, not all multichannel marketing activities are omnichannel.
Like multichannel, omnichannel also comes up with omnichannel marketing and omnichannel retailing. Omnichannel marketing covers all touchpoints of the customer experience, from the top to the bottom of the marketing funnel. When it comes to omnichannel retail, this strategy focuses on building a seamless customer experience on different sales channels such as brick-and-mortar stores and online stores. The buy-online in-store pickup is an obvious example of omnichannel activity.
Pros & cons of omnichannel
Omnichannel aims to provide a seamless and consistent shopping experience for customers across multiple channels and touchpoints. However, it also comes with the hassle of multichannel management. Here are some pros and cons of omnichannel:
What Are the Key Differences Between Multichannel and Omnichannel?
The most important question: Multichannel vs omnichannel: What is the difference?
Although both multi-channel and omnichannel involve using multiple channels, there are three main differences, centering on the purpose of different approaches and how they work.
#1. Product-centric vs customer-centric
The first and foremost key difference between multichannel and omnichannel is their approach. While multichannel is a product-centric approach, omnichannel is a customer-centric approach. The primary goal of a product-centric approach is to put the products on as many channels as possible. On the other hand, a customer-centric approach focuses on creating a seamless customer experience throughout the multi-channel customer journey.
In the product-centric approach, channels can operate separately, which might lead to inconsistent experiences when customers switch between channels. In contrast, omnichannel customer service is likely to take customer experience to the next level.
#2. Customer engagement and customer experience
Customer experience is crucial for any business or organization. With this in mind, omnichannel is better at designing customer experience than multichannel.
In a multichannel approach, companies offer various channels to engage with their customers. These channels can operate separately, which might lead to inconsistent experiences as customers switch between channels. Unlike multichannel, omnichannel customer service takes customer experience to the next level. The omnichannel method provides a system where interactions and data are shared across all channels, enabling customers to switch between channels without any disruption.
#3. Channel integration
Another obvious difference between multichannel and omnichannel lies in the meaning of these terms. In simple terms, multichannel means “many channels,” while omnichannel means “all channels.” This difference not only shows the number of channels but also can the level of channel interactivity.
With a multichannel strategy, the different channels, such as social media, brick-and-mortar stores, or online stores on the best-selling platforms, can work independently. Meanwhile, all the channels in the omnichannel work together. Omnichannel eCommerce strategies aim to integrate channels to ensure a cohesive and interconnected experience for customers. As a result, channel integration in omnichannel might require more technical and financial effort.
#4. Data and analytics
Data and analytics play a crucial role in both multichannel and omnichannel strategies. However, the level of data integration and analysis may vary.
For example, in an omnichannel retailing approach, data is often centralized and leveraged across all channels to gain comprehensive insights into customer behavior and preferences. This holistic view allows businesses to deliver more targeted and personalized experiences. In contrast, multichannel strategies may involve analyzing data specific to individual channels, limiting the overall view of the customer journey. In this case, multichannel listing software like LitCommerce may help you a lot in simplifying your multichannel selling.
You have gone through all the differences between multichannel and omnichannel. Which approach aligns best with your business? We will explore right next!
Multichannel vs Omnichannel Examples
Oddie’s multichannel strategy
Multichannel strategies are mostly found in retail or the B2C area. Let’s take the example of The Oddie, an Australian’ oversized blanket hoodie brand, and see how they implement multichannel strategies.
This brand has employed a variety of channels to expand their reach and drive sales growth. Oddie has built their own web store, where customers can easily see all the product categories of this brand. Besides, they also tapped into the Amazon marketplace to showcase their products.
Regarding social media, it’s no secret that fashion brands love Instagram and TikTok. Oddie is no exception. They harness the power of short videos to reach their young audience. In 2019, this brand got $1.6 million in sales. Remarkable result: Last year, in 2022, The Oddie reached $184 million in sales. Impressive, right?
Starbucks’ omnichannel strategy
A notable example of an omnichannel approach is Starbucks. The Starbucks Rewards app will reveal why this brand stays on top of offering a great omnichannel experience.
Let’s say you get a free rewards card that you can use when you order a drink in any Starbucks store. Unlike other brands that offer traditional loyalty reward cards, Starbucks allows their customer to check and reload cards in the app, by phone, on its website, and in-store. Any changes will be updated immediately, in real-time. The process is quick enough that you can reload the card while waiting in line to order.
The online order and curbside or in-store pickup model is also a part of Starbucks’ omnichannel strategy. This brand offers a variety of ways to get your order store by store. Whether you’re in a car or on foot, you’ve got options when it comes to getting your order.
Multichannel vs Omnichannel: Which is Right for Your Business?
So, omnichannel vs multichannel: Which one to choose? – It depends.
When it comes to eCommerce strategies, you should consider your business goals and your resources to compare omnichannel vs multichannel eCommerce or multichannel vs omnichannel retailing to find out the most effective one for you.
- If you start running a business or your business is still small, multi-channel marketing might be a better choice because it requires less effort. Alternatively, if your brand is well-known, omnichannel may bring a novel experience for your customers.
- If you want to focus on optimizing specific touchpoints and channels, a multichannel approach may be suitable. However, an omnichannel retail strategy is recommended if you aim to deliver a seamless and integrated customer experience across all channels.
Assess your resources, customer journey, and desired level of channel integration to determine the best fit for your business.
Multichannel vs Omnichannel: FAQs
- What is the difference between omnichannel and multichannel customer support?
The critical point that differentiates omnichannel from multichannel is that omnichannel offers a seamless experience, regardless of where the customer begins the interaction. Whereas multichannel customer service is simply to provide customer support across multiple channels.
- What is the difference between omnichannel and multichannel payment?
Omnichannel payment refers to a unified payment experience across all channels, allowing customers to make seamless transactions regardless of the channel they are using. Multichannel payment, on the other hand, refers to the acceptance of payments through multiple channels, but the experience may not be fully integrated or consistent.
- Is Netflix omnichannel or multichannel?
Netflix is considered a multichannel service. Netflix provides its streaming services through various channels such as its website, mobile applications, smart TVs, gaming consoles, and set-top boxes. While it offers a consistent user experience across these channels, it does not fully embody the concept of omnichannel, as the customer experience is not necessarily synchronized or continuous across all channels.
- Is Amazon multichannel or omnichannel?
Amazon is an example of both multichannel and omnichannel. Amazon operates as a multichannel retailer by offering its products through multiple channels such as its website, mobile app, physical stores (Amazon Go, Amazon Fresh), and third-party marketplaces. Additionally, Amazon incorporates omnichannel elements by providing seamless integration and consistency in the customer experience across these channels, allowing customers to switch between channels effortlessly.
The Final Words
When it comes to reaching customers effectively, businesses can choose between two strategies: multichannel and omnichannel. The multichannel approach uses various channels like physical stores, online platforms, and third-party retailers, but each might work independently. On the other hand, omnichannel goes the extra mile by integrating all these channels, giving customers a seamless and connected shopping experience. At the end of the day, it’s you who know exactly which strategy is best for you.
If you want to learn more about growing your business by selling your products on marketplaces, feel free to contact us or join the eCommerce Growth Hacking community for more insights. Enjoy reading the LitCommerce Retailer Blog!