Omnichannel vs. Multichannel: What should Retailers know?

July 23, 2018

Home » Omnichannel vs. Multichannel: What should Retailers know?
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Multichannel and omnichannel eCommerce might seem like the latest marketing buzzwords, used interchangeably to describe modern marketing and eCommerce activities. However, multichannel and omnichannel represent two very different approaches to marketing, and the shift from multichannel to omnichannel signifies an enormous change in the way that companies approach business activities.

Omnichannel vs multichannel ecommerce

Multichannel marketing was a recognition of the fact that customer shoppingpreferences were changing. eCommerce was taking market share from brick-and-mortar stores, and retailers reacted by ensuring products were available for purchase on a variety of channels: owned websites, third-party marketplaces, physical stores, and more.

Omnichannel, on the other hand, is a recognition that customer experiencepreferences are changing. Omnichannel ensures that a customer can have a consistent shopping experience across many different channels, with seamless transitions from one to the next. This includes the accurate reporting of inventory numbers regardless of which marketplace or store they are attempting to make a purchase on.

Multichannel often involves an extension of the traditional business model: adding a web sales department, or a third-party marketplace to existing retail or catalog departments, each working in isolation. Customer data and customer service were apart, and the organization was structured to maintain separate silos for different channels.

Multichannel marketers create consistency across channels by sending a fixed message, crafted for a wide appeal to different kinds of shoppers. Separate silos also create a channel bias, reflected by the lack of shared data from one channel to the next.

eCommerce customers’ experience

A change from multichannel to omnichannel requires a shift in perspective that needs to reflect in organizational processes. For a cohesive customer experience, departments must integrate and break down silos to ensure consistent information is available to customers across different channels.

Omnichannel marketers craft an experience based on optimizing the customer experience as they transition from one touchpoint to the next. An advertisement is sequenced logically, with a view to optimization. Trust is built over time by reflecting a deeper understanding of customer needs, showing consistency through brand personality rather than by repeating the brand message.

Customers engage with brands on many different channels, with each touchpoint representing another step on the path-to-purchase. A study by the Harvard Business Review found that 73% of customers use more than one channel regularly. 15 years ago, the average consumer used two channels to buy a product, while today’s shoppers average almost six – with 50% regularly using more than four.

Customers expect more from brands than ever before. The consumer experience must be effortless, and free of friction as shoppers transition from one channel to the next. A growing number (35%) even expect to be able to contact the same customer service representative on different channels – an expectation that would be impossible to meet without integrated CRM, customer data, and customer response mechanisms built into the organizational structure.

However, a successful omnichannel strategy pays off for retailers. Companies with strong omnichannel engagement strategies retain 89% of customers, compared to 33% of those without. Customer satisfaction ratings are 23 times higher, average spend is greater, and the lifetime value of omnichannel customers increases by 30%.

Transforming a company from a multichannel to omnichannel business is a complicated undertaking. However, it can provide a significant competitive advantage for those organizations that do it well. Providing a consistent customer experience across all the different brand touchpoints, creating a logical progression along the path-to-purchase, is critical in meeting the expectations of modern consumers.


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