Unlock Paris is coming: March 8 - 9 Register

en

Ecosystem

Jan 09, 2023

8 min to read

Omnichannel vs. Multichannel eCommerce: What It Means for Digital Transformation

Many organizations have been expanding operations to take full advantage of new online touchpoints. But how do you know which eCommerce strategy is right for your team, and how do you get started?

Keywords

digital transformation

eCommerce

multichannel

omnichannel commerce

It wasn’t long ago that catalogs ruled the day and brick-and-mortar stores ruled High Street. Malls were the place to be. Salespeople hit the actual pavement hawking manufacturers’ goods from coast to coast. 

Then came the digital transformation

First there was dial-up internet and chat rooms. Then there was Amazon. Social media. Yelp reviews. If your business didn’t at least have a Google listing, you barely existed. 

Each of these new creations became more than a fad. They became channels through which potential buyers learned about your products. And the debate between omnichannel vs. multichannel eCommerce was born. 

We’ve written a lot about omnichannel eCommerce. But what about multichannel? Could it benefit your business? And what’s the difference between omnichannel vs. multichannel, anyway? Let’s find out. 

 

What is multichannel eCommerce?

Multichannel eCommerce is short for “multiple channels.” It simply means that you sell your products on more than one channel. For many retailers, this means having a physical store and a digital website, as well as selling on social media, search engines, marketplaces, and other platforms. For manufacturers, multichannel eCommerce has been truly revolutionary, allowing them to sell direct-to-consumer rather than having to rely on third parties and catalogs. 

Businesses following a multichannel approach focus on building out these new channels while ensuring product information is accurate and consistent. You can put certain inventory on certain channels, customize which product information you show based on your audience, and more. 

Strategies can be tailored to each channel, and results tracked, but each channel is a “solo act” rather than a player in an orchestra. That’s the biggest difference between omnichannel vs. multichannel eCommerce, as we’ll see later.

 

Benefits of multichannel eCommerce

Multichannel eCommerce is the natural progression of the digital transformation. Even the most old-school retailers and manufacturers probably have at least a basic website or a social media page, making them multichannel. And in our connected world, there are tons of benefits to this strategy:

  • Reach more customers and new audiences
  • Reach shoppers when and where they are most likely to buy
  • Increase incremental sales and total sales volume
  • Increase awareness of your brand
  • Drive higher average order value
  • Grow your online presence and sales
  • Provide a more consistent and rewarding shopping experience

 

Drawbacks of multichannel eCommerce

So why the debate between multichannel eCommerce vs. omnichannel? You’ll get many of these benefits with omnichannel as well—and there are challenges with multichannel strategies: 

  • New infrastructure and processes needed for fulfillment, shipping, logistics, etc.
  • Increased costs due to these new requirements
  • Greater demands on the supply chain
  • Channels and data become siloed rather than working together
  • Inconsistent product information, branding, and customer experiences

While the top three concerns can be remedied with new business strategies, the last two bullet points above are a big reason that multichannel vs. omnichannel eCommerce remains a sticking point. 

 

What is omnichannel eCommerce?

Omnichannel eCommerce goes one step beyond multichannel, bringing together all of the different channels on which your customers interact with your brand. Rather than acting in silos, all of your channels connect, interact with and influence one another, creating that beautiful “orchestra” and moving your customers along in their buying journey. Check out our previous articles for more on the benefits of omnichannel eCommerce and why building an omnichannel future is so essential. 

 

What’s the difference between omnichannel vs. multichannel?

The biggest difference between omnichannel and multichannel eCommerce is that while omnichannel is people-focused, multichannel is product-focused; while omnichannel is customer-centric, multichannel is channel-centric. Multichannel eCommerce is all about moving inventory as efficiently as possible through various channels. Omnichannel takes a more holistic approach, aiming to provide a seamless experience throughout the entire customer journey. 

Both strategies have data at their core, but even then, there’s a difference: The foundation of multichannel eCommerce is product data. The foundation of omnichannel eCommerce is both product and customer data. 

Multichannel presents your products on various channels and allows your customers to purchase them or otherwise communicate with you. You’ll collect data on what’s selling, when, and how quickly, but not on customer behavior and preferences. And while you’ll be able to see individual channel performance, you won’t be able to see how all the channels work together.

Omnichannel retail is an integrated experience. Product and customer data is shared among channels so that buyers can be properly targeted, retargeted, and provided with seamless experiences that allow them to pick up where they left off, even if it was on a different channel. Each interaction builds upon the last, fulfilling the customer’s needs as they progress through the buying journey. 

Essentially, omnichannel takes multiple channels and synchronizes them, while multichannel leaves them separated and siloed. Thus, all omnichannel eCommerce is multichannel, but not all multichannel is omnichannel.

 

So why isn’t everyone doing omnichannel?

When you look at omnichannel vs. multichannel side-by-side, it’s easy to say that omnichannel is better. After all, great product experiences can increase one-time sales, but they won’t mean anything in the long-term if they don’t ladder up to great customer experiences. And whether you’re in retail, manufacturing, or distribution, the digital transformation is here to stay—and it’s omnichannel. 

So why aren’t more companies focused on omnichannel?

The truth is that omnichannel strategies typically require a large investment of resources, especially in the beginning. If you operate out of a brick-and-mortar store or warehouse using a catalog or third-party partnership model, creating even a multichannel strategy means you’ll need to build a website, leverage marketplaces, learn about social media, and start advertising.

To reach true omnichannel status, you’ll also need to syndicate your product data, optimize your tech stack, synchronize your customer data, and then use analytics to segment and target your audience, following them across all channels, both online and offline, and delivering personalized content at every touchpoint. This requires additional tech, expertise, and experience. 

When a simple, straightforward multichannel strategy can still increase sales in the short-term, many businesses don’t want to make a further investment in omnichannel. But that’s a mistake.

Omnichannel vs. multichannel eCommerce is ultimately about a long-term vs. short-term approach. The fact is that the digital transformation is turning the world toward omnichannel experiences. And while it may not have reached your industry quite yet, it will. You can either build an omnichannel commerce strategy now and get ahead of your competition—or you can be left behind. 

Luckily, many of the differences between omnichannel vs. multichannel can be mitigated with the right technology and partners. While a multichannel strategy will use separate and disparate technologies, like eCommerce platforms for selling, customer relationship management (CRM) systems, or customer data platforms (CDPs), omnichannel technology allows you to orchestrate and automate all of your processes. 

Product information management (PIM) systems are a great place to start implementing an omnichannel strategy. A PIM provides a central database for your product information, allowing you to distribute consistent, accurate data to all of your channels while also conforming to their rules—providing a superior experience across all touchpoints of the customer journey. 

Ready to learn more about omnichannel marketing with PIM? Book your demo today to see the benefits for yourself.

Continue Reading...

Want to see more?

Join 40,000+ other e-commerce marketers and get proven strategies on email marketing, CRO and more