In the overlapping worlds of ecommerce, social selling, digital marketplaces, and physical storefronts, omnichannel and multichannel are the most popular buzzwords. But it’s not always easy to tell the difference between the two.
If you don’t end up reading this entire post, here’s the TL;DR:
- Multichannel retail (i.e., “many” channels), revolves around your product and lets customers engage and purchase natively wherever they shop but often treats channels as silos independent from one another. Each channel in a multichannel strategy exists as a separate purchase opportunity.
- Omnichannel retail (meaning “all” channels) revolves around your customer and creates a single customer experience across your brand by unifying sales and marketing that accounts for the spillover between channels
We’ll arm you with the information you need to decide which approach to take.
What is multichannel retail?
Multichannel blends the customer experience and gives consumers the choice to engage in the channel they prefer. It’s flexible but expects brands to behave in the confines of the channel.
Think of multichannel marketing as a wheel with spokes. At the center of the wheel is your product (i.e., a sale). On the outer rim of the wheel are your customers where each channel offers a separate and independent opportunity to purchase.
Once it’s clear which channels resonate best with your target market, you can optimize marketing in those channels to maximize sales.
How does multichannel retail work?
Online mattress seller Leesa executes a multichannel approach like this:
Channel 1: The website
First-time visitors without existing accounts are presented with two overlays. First, a welcome message with a “$100 off” offer with a subtle seasonal touch:
Ignoring the offer and browsing the site results in a second overlay. In this instance, let’s say a user selects a mattress, adds it to cart, but abandons before purchasing.
Before bouncing, the user sees a “$100 off” CTA pop up accompanied by an email opt-in giving Leesa permission to target the user later:
Users who opt-in receive a series of emails aimed at converting first-time buyers.
Click “Finish Shopping” and the user is sent back to the cart they abandoned with the $100 discount automatically applied:
Email and on-site operate in tandem; the two feel like a single channel.
Channel 2: Marketplaces
Leesa also sells its products on Amazon. If a user abandons cart on Leesa’s site to see if they can find a cheaper product on Amazon, Leesa remains top-of-mind with its sponsored search result:
It’s not enough to simply market products. The key with multichannel is to offer native commerce opportunities across channels.
It’s why Leesa offers the same robust online experience on Amazon as it does onsite, complete with a product video, social-proof, and a detailed explanation of its unique value proposition:
Channel 3: Facebook
A user who still hasn’t completed the checkout process and accesses Facebook will see the mattress they left in their cart, as well as additional ads on their feed:
Channel 4: Pinterest
Leesa might also list and sell its products natively on Pinterest through a Buyable Pin:
Each channel in a multichannel strategy exists as a separate purchase opportunity.
What is omnichannel retail?
Omnichannel retail is immersive and puts the customer, not your product, at the core. It’s about communicating in ways that are aligned with why they use a given channel and showing awareness of their individual stage in the customer lifecycle. Customers can purchase wherever they are—rather than treating channels as independent silos, omnichannel accounts for the spillover between channels and offers customer experiences within and between channels.
In essence, omnichannel removes the boundaries between different sales and marketing channels to create a unified, integrated whole. The distinctions between channels—onsite, social, mobile, email, physical, and instant messaging—disappear as a single view of the customer as well as a single experience of commerce emerges.
In place of a multi-spoked approach, omnichannel merges the worlds of websites, emails, retargeted ads, social media marketing, and physical locations to show personalized offers, products, and messages.
How does omnichannel retail work?
If we alter Leesa’s multichannel approach outlined above, an omnichannel approach might look like this:
- A customer goes through the onsite process, adds a queen mattress to their cart, but leaves without purchasing.
- The first email they receive contains the “$100 off” incentive but is ignored.
- Simultaneously, they’re served a series of ads for the same queen mattress and “$100 off” coupon on Facebook, Pinterest, Instagram, and YouTube, staggered over a week to ensure they aren’t bothersome.
4 After a week of non-engagement, Leesa switches its approach and features ads highlighting its social responsibility efforts with calls to action (CTAs) to check out its Giving Back page:
5 A pre-roll YouTube ad highlighting Leesa’s support of the Phoenix, Arizona Dream Center, a non-profit helping to reunite families, finally prompts the customer to engage.
6 The customer returns to Leesa, watches another video, and visits the king mattress product page instead of the queen.
7 In response, a new round of social ads appear, as does an email with two adjustments—a king mattress is featured and the incentive is raised to “$150 off.”
8 The customer clicks through Facebook, fills out their shipping information, but decides a mattress needs to be experienced before purchase and abandons cart again.
9 Leesa anticipates this objection and detects that the customer’s address is near its New York showroom.
10 Two days later, the customer gets a personalized invitation in their physical mailbox to test the king mattress for themselves at The Leesa Dream Gallery.
11 The customer finally bites. They stop by, purchase the mattress, and use Leesa’s Shopify-powered POS system at checkout which automatically updates their account.
12 When the customer arrives home, there’s a “Thank You” email waiting for them and a week later, another email arrives asking the customer to review the mattress.
13 Both emails are ignored. Since Leesa values social proof, the customer gets a Facebook Messenger invitation to submit a review.
14 The customer agrees and gives Leesa 5 out of 5 stars, interacting exclusively through Facebook Messenger.
15 Given the customer’s satisfaction with their new mattress and the customer’s last two points of contact, the following week Leesa sends both a physical mailer as well as a Messenger message outlining their “Refer a Friend” program.
16 In the meantime, all of the Facebook, Pinterest, Instagram, and YouTube mattress ads have stopped. In their place—staged over time—ads appear for The Leesa Blanket.
17 To Leesa’s surprise, the customer purchases three blankets. This automatically triggers a new series of mattress ads on social and via email.
18 The customer clicks through one of the emails but—rather than making a purchase—spends time on Leesa’s financing page.
19 This likely means they’re contemplating additional mattresses but are price-conscious.
20 The next email and Facebook ad they see speaks directly to that need.
With an omnichannel strategy, customer behavior dictates the tactics used next. Each interaction alters the experience. The brand’s behavior isn’t random. It’s aligned with the customer’s behavior within and between channels.
Choosing between omnichannel vs. multichannel
Omnichannel, which offers a smoother customer experience, seems like a logical choice. It’s not so clear-cut though. Starting your businesses a physical retail store vs. a digitally-native brand makes a difference in which approach you should choose.
Converting a retail business to omnichannel requires significant resources. Worse yet, there’s no stopping halfway. Non-functioning omnichannel technology will create the same experience as absolutely no technology at all.
So while omnichannel is ideal, some businesses might be better served to start off with a multichannel experience before tying them all together.
Consider two key concepts when deciding:
- Resources – Providing an omnichannel experience requires IT investment and prowess, the right infrastructure and tech stack, and the vision necessary to integrate and execute. If you’ve built a headless commerce architecture, you may need a robust content management system to execute. If you have a traditional architecture, a product information management (PIM) system may act as your tech backbone. Without an in-house IT staff, you may need to hire ecommerce technology experts.
- Flexibility – A large part of making the transition to omnichannel is about people and incentives. Resist incentives that reward maximizing sales in each channel regardless of the impact such objectives have on adjacent channels or the overall customer experience. Buy-in is also crucial.
CMOs and CIOs, in particular, must develop a shared vision and ensure it’s adopted throughout the organization. Be sure your executive leadership team has the technical background to implement the components of an omnichannel transition.
Identifying the right approach for your brand starts with clearly understanding the difference between omnichannel and multichannel:
The future promises new channels not yet imagined or technologically feasible. Regardless of whether you invest in multi or omnichannel, developing the flexibility to adapt and integrate new channels will determine whether you’ll be successful tomorrow.
This article was originally published by our friends at Shopify Plus.