Omnichannel or Multichannel? Which One And Why

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Photo by Heidi Sandstrom.

As we move deeper into the computer, internet, and smartphone era, the world of retail feels more complex than ever.

But this complexity is all aimed at making the path to purchase easier for the consumer. As many aspects of our lives become more connected, our expectations as consumers are at an all-time high. We’ve come to assume, even subconsciously, that we can engage with businesses in any way we like, no matter where we are.

Over the years, traditional brick-and-mortar stores have realized the potential of a multichannel approach. This started with phone and catalog sales and has evolved into online stores, email marketing, and social media shopfronts.

But is having multiple channels enough? Running an online store in parallel with a physical store used to be an advantage. Now it’s the standard. From multi-channel marketing, we have seen the emergence of omnichannel marketing. But what’s the difference? And which one is the best fit for your business?

The Differences Between ‘Multichannel’ and ‘Omnichannel’

In marketing circles, you may often hear the two terms used interchangeably. While there are some similarities, it’s important to understand the key differences.

Before we talk about the pros and cons of each, let’s start with some basic definitions.

Multichannel describes sales and marketing channels that run in parallel but operate independently of one another. This may include a physical store, an online store, social media channels, and phone or mail-order shopping. All of these channels may be part of the same brand, but they don’t share information among them.

Omnichannel refers to a sales and marketing network that is completely integrated. Just as the word ‘omnipresent’ describes something that is everywhere at once, omnichannel creates a continuous shopping experience across all touch points. A buyer’s journey that begins on one platform can be completed on another, online or in person.

As you may gather, all omnichannel systems are multichannel—but not the other way around. While many companies operate in a multichannel setup (online and offline), very few companies are truly omnichannel.

Multichannel: More Ways to Reach New Customers

With more sales channels come more opportunities. Multichannel marketing can reach new customers, increase traffic, and build greater revenue both online and in-store. Even though individual channels may not share information, brands can still create a consistent shopping experience with intelligent marketing.

The Advantages of Multichannel

Having multiple channels allows a brand to reach consumers in different ways and across different platforms. Even as e-commerce grows in popularity, there are still many people who prefer to shop in a physical location, via post, or over the phone. A multichannel approach allows consumers to interact with a business in the way that best suits them, online or offline.

The Disadvantages of Multichannel

Have you ever walked into a store with a discount code and been told you could only use it online? Or bought something online and unsuccessfully tried to exchange it in-store? This can be the result of a multichannel system. While it can improve reach, the customer journey can hit hurdles when channels are not integrated.

Omnichannel: A More Connected Shopping Experience

A simple example of omnichannel in action is online retargeting. Data is collected when a customer visits a website, and then advertisements follow them across other websites or show up in their social media feeds. The marketing channels share data to create a smoother path from the first contact to the final sale and beyond.

The Benefits of Omnichannel

Omnichannel creates a smarter shopping experience that benefits both consumers and brands. Data is shared across all channels, enabling stronger engagement and moving the consumer toward a purchase. For the customer, it creates an easier shopping experience and a stronger brand connection.

Retargeting can adapt to suggest more relevant products, discount offers can be increased based on behavior, and abandoned carts can trigger physical mail campaigns. In addition, promotions can be used online and in-store, via centrally connected POS systems.

The Challenges of Omnichannel

Moving to an omnichannel system can require a thorough re-design, as well as a large investment of time and money. Some businesses may prefer to stick with a multichannel approach and invest in the areas that are most profitable.

Another consideration is that all channels need to be connected in order for the system to work properly. If there are any broken links in the chain, it can reduce the effectiveness of the entire system.

Which Approach Is Best?

If you’re looking to create an incredible customer experience, omnichannel marketing may be the best method. You can build an intelligent, flexible sales funnel that gives consumers exactly what they want.

For a simpler approach, multichannel marketing can still yield impressive results. It also avoids the large-scale overhaul that an omni-channel system demands.

Regardless, marketing is about more than the medium. It’s about building engagement, telling your story, and showing the consumer that you care. To this end, great content will always trump even the smartest of platforms.

Kelly Davidson is a writer at Merchant Savvy, a comparison site that reviews and rates merchant account providers, ecommerce platforms and small business software. For the past four years she has focused on the retail sector and point of sale hardware and payment processing apps in particular.