Omnichannel vs Multichannel Retailing: The Ultimate Guide

Cody Cromwell
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Omnichannel vs Multichannel Retailing: How It Works

Back in the day, we used to have a counter and a cashier. And for over 30 years now, this has been how most retail stores did business. With increased competition and digitization, things have changed. Today, instead of having a physical counter and a cashier, most stores use mobile apps or a website to manage transactions.

So if you’re still operating under the impression that Amazon, Walmart, and Best Buy are three completely different businesses, you need to familiarize yourself with the latest methods of doing business. Because from the customer experience perspective, you’re not doing them any favors by having different customer interactions and experiences depending on which channel you visit.

Some of the advantages of using multiple channels are:

Faster checkout times for customers. (Splitting your attention across 3 screens is going to help things go a lot smoother.)

Quick and easy product research. (Product pages from the same retailers can be used to create a richer and deeper search experience.)

Improved navigation, making it easier for customers to check out. (Multiple-channel sites are less likely to have error-prone URLs or confusing navigational structures.)

Enhanced customer loyalty. (Customer feedback on multichannel sites actually improves over time.)

Omnichannel Retailing

The Ultimate Guide

The Art of Omnichannel Retailing: Find the perfect balance between online, in-store, and mobile offers. It’s a tricky task, but one that many brands are taking on with innovative ideas. Indeed the omnichannel deals with scale is becoming increasingly attractive – it’s changing the way we shop, but it’s also challenging store and brand management teams to transition and truly focus on future customer service and experience.

Increasingly, omnichannel models focus on extending the customer’s experience across all channels, from the physical store to the various online storefronts and from the marketing and social media space to the ever expanding realm of mobile.

As you can see, the variants often overlap, meaning that delivering maximum value to a customer across multiple touch points can be a tricky challenge. But more than ever, businesses are working to develop a –true omnichannel” approach that can deliver enhanced customer experiences and better merchandising across a range of channels.

As customer expectations grow more sophisticated, retailers and brands are finding that they need –all channels” strategies to thrive and customers expect more. As such, many are learning to support omnichannel retailing while they also develop omnichannel marketing.

Multichannel Retailing

Tradition Vs. Omnichannel

While e-commerce and multi-channel retailing have become the norm with credit cards and search engines offering shoppers an infinite number of buying options, the channel strategy to maximize the upfront sales of products remains stagnant.

The retails buying power of omnichannel retailing is based on the fact that nearly all the stakeholders in the retailing chain are involved. It includes audiences, communities, digital platforms, and content, which is why it creates the perfect storm for maximizing the return on marketing investments.

Companies have a tendency to think of omnichannel retailing in terms of content and are driven by the fact that it can lead to cost efficiencies and maximize the sales of products. As a result, there’s a desire for retailers to create a digital content strategy to build online communities.

Online communities are the biggest profit center for retailers, but there are problems with the ability to collect data, delivery of content, and marginalization of customers. But it’s important not to overlook the positive impact an omnichannel retailing strategy can have on retailers.

Omnichannel vs Multichannel Retailing: Which is Best?

Retailers have known for some time that the customer wants more than one channel to shop from. That’s what omnichannel retailing is about. But the number of channels has escalated considerably in recent years, and retailers have struggled to respond effectively.

In short, omnichannel has always meant multi-channel, but around the millennium, we decided that omnichannel meant all sorts of things, from Amazon to eBay.

The term is now so diluted that it’s difficult to know where to make a reasonable distinction. While it’s clearly about having many viable channels, we must also recognize that some channels make it easier than others, thereby qualifying as offering an omnichannel experience.

For retailers, the acquisition and use of the right data has transformed how they can deliver a reasonable omnichannel experience. Amazon is a model of what is possible, but how should other retailers compare?

Here’s a simple shorthand guide to the best ways to have a reasonably good experience across multiple channels. Simply note where access to information makes a difference.

Multichannel vs Omnichannel Retailing Costs

Whichever channel your business uses, the costs will still follow the rule: the more that go through, the more that come back. What will determine if you, your company, and your product(s) can cut through the clutter is the strength of sales and marketing.

If your business is in another channel and you have treated that as your only channel by investing in sales and marketing campaigns through different channels, chances are you have a tough hill to climb in switching to an Omnichannel strategy.

This is why we focus more on fundamentals and principles of Omnichannel Retailing so that you can evaluate your current channel mix.

Omnichannel Providers

Vs Multichannel Providers: How to Choose…

There’s a lot of buzz around the phrase omnichannel retailing at the moment. Omnichannel is also referred to as ‘omni-channel’. The idea is that you should have a single strategy to drive your customer’s experience across your various channels, be that a store, website, mobile apps, live chat, social media, or all these things.

Multichannel retailers, on the other hand, have a strategy that is split across many requirements and channels. To choose the strategy that’s right for you, it’s important to understand what you’re getting from an omnichannel strategy as well as how much your retail channels overlap overall.

This is where it’s important to know exactly what unites and differentiates channels. A multichannel approach is likely to need more than one channel for customer service. In this sense, there is overlap, deeper into those channels. They might also rely on pre-established relationships with other channels.

BigCommerce

One of the clear advantages of the BigCommerce platform is that it allows retailers to power their entire shop on one platform. Simply put, you no longer need to manage two –and sometimes three” different stores. You can have all the features of your BigCommerce platform in one place.

With that said, this does not mean that you can’t manage multiple stores. In fact, you can manage as many as you like, but all of the stores will be under the same user account. This allows you to do everything from one location.

The BigCommerce Platform provides retailers a single point of contact to handle their entire shopping experience. Understandably, this a huge benefit for small business owners and retailers because it frees up time to tackle other pressing business issues. Mobile optimization, stock management, marketing, customer support, and more can all be managed more effectively and can often be better managed by one individual than by two or three separate people.

An additional benefit to retailers is that they can also integrate all of their inventory into one platform. This allows for a better understanding of inventory on hand and a better control of the overall customer experience. This is especially important because counterfeit products are often sold on online marketplaces, putting small business owners and retailers at risk.

Shopify

With the deluge of information in the marketplace today, it’s really hard to prioritize the various brand channels that have to do with retail marketing. Best Buy, Nordstrom, L’Arche, Saks, Neiman Marcus․ they all have their own unique strategies, and when it comes down to it, it’s really hard to know who to trust.

The truth is that the best brands in retail all work within an omni-channel store format. They currently have no brand channel, they just have omnichannel retailing. Many people have a hard time getting their heads around that so here’s a news flash: I’m going to show you why it’s the way you should be going, too.

What Do We Mean By Omnichannel?

It’s a well-known fact in most organizations – we’re all too aware of the sustainability of the traditional eCommerce stores. You can’t ignore the fact that you’re losing the customer base you have geographically. This is not sustainable for retailers who want to function in the digital era.

Webgility

In the summer of 1998, Susan Fournier set out to learn all she could about multichannel retailing. She was the first to previously work with Future Shop to understand, create, and execute a digital strategy using a multichannel approach. She has created and led multiple multichannel retail teams which solved dozens of complex problems related to supply chains, operations, pricing, and segmentation.

Her background, experience, and knowledge about e-commerce have enabled her to provide retailers with a unique set of perspectives related to how the industry operates today and will in the future. Her multichannel history combined with her fertile imagination has allowed her to predict the future before any of her competitors.

Webgility Omnichannel solutions stand at the intersection of e-commerce, merchandising, sales force automation, and customer service. Webgility uses its historic understanding of retail to enter markets and support retailers at all stages of their evolution. Over the last 14 years, Webgility has helped thousands of retailers across North America to improve their omnichannel offerings and achieve better margins.

Omnichannel vs Multichannel Retailing Features

  • Omnichannel is the digital platform for shopping. Multichannel, on the other hand, refers to the multi-channel delivery (physical and digital) of retail offerings.
  • On-demand (or real-time) production and distribution of goods and services. Retailers sell the same items in many different stores … including a wide selection of stores, online, via call centers, home shopping networks and niche sites.
  • Omnichannel retail facilities offer branding, configurability, and customization that allowed a wide range of learning and storage capabilities.
  • Omnichannel retail outlets have the ability and the will to fusion their own business systems with all of their offered channels. This will push the retailer to immediate performance based approaches.
  • Omnichannel retailing has also given birth to new business models like customer-experience-based business, personalization, co-commerce, and the B2B2C environment.

Email Marketing

Email marketing and social media marketing have become virtually synonymous in the fashion and retail industries. Both have the capacity to generate more sales than traditional retail and marketing methods. Both hold considerable influence in the buying process, with 90% of consumers saying they would rely on social media before making a purchase. Both are highly targeted and provide greater insight into consumer behavior, enabling retailers to have more accurate forecasting and more accurate product positioning for their consumer.

In some cases, these channels are complementary in nature; however, in other cases, the scope has been described as a bit of a muddle and can be a challenge to understand the channel-specific differences between email and social media marketing channel.

Below, we’ve outlined the most important differences between the two channels to help you decide which is the best channel for your business and how you should implement each to maximize sales and grow your business.

EMail marketing vs Social media both include the ability to build relationships and an appreciation for customer service. Courtesy, trust, and the theme of loyalty are all attributes that are developed over time. Showing a brand’s personality through social media developed a greater bond than with email marketing, as it provides more opportunities to respond to customer concerns.

Customer Loyalty Programs

Customer loyalty programs have grown in popularity in recent years. According to a 2015 Nielsen survey, customers are more likely to shop with retailers who offer a loyalty program than customers who don’t. But while customer loyalty programs are wildly popular, not all loyalty programs are created equal.

In fact, some companies are adopting omnichannel strategies…retailers that are signing customers up for loyalty programs online and in-store. But in order to be sure that an omnichannel strategy is the right choice for your business, here’s a closer look at omnichannel vs. multichannel retailing strategies.

Interactive Video Ads

An Evolution in Retailing

These days, the world’s biggest online retailer is getting creative with their video marketing efforts. With streaming video technology, it’s easier than ever to incorporate high quality videos into their in-store shopping experience. Scan-N-Go, use of related products in one stream, and augmented reality video allow customers to participate in the show.

Here’s a short video article from Boston Retailer discussing the Omnichannel retail experience Consumers are demanding a seamless retail experience when they shop today. Omnichannel Retailing…a term that’s become a buzzword to describe the evolving ways that consumers have their shopping needs met. …allows brands to provide a truly interactive in-store experience. Omnichannel retailing isn’t any one thing, but rather a collection of tactics that combines in-store, online, and mobile services to help buyers find and purchase what they need, regardless of where they shop.

How are retailers using Omnichannel Retailing?

  • Using Video Marketing to Connect with Buyers in-store
  • Using Displays that are AR-Enabled
  • Scan N…Go
  • Apps that are used both online and in-store
  • Omnichannel Retail Store Layout

Retargeting Ad Campaigns

Retargeting Shopping Lists Differentiate Online Marketing Campaigns by Channel.

There’s an increase on the use of retargeting campaigns as a part of promotional marketing and shoppers’ flocking to marketplaces to shop. However, people’s behavior on the Internet is quite different than they are in the real world.

Retargeting is a bid to make online customers feel as they are in the shopping environment. This strategy is the most important content marketing strategy for omnichannel retailing. It allows retailers to track where customers’ browsing experience takes them and to adjust on how you are doing your marketing strategies.

Retargeting campaigns are often delivered through the Web, Search and mobile phones. Facebook and Google AdWords in particular are the most common retargeting campaigns used by retailers to increase the likelihood of conversion.

One of the most important trends in retargeting is the introduction of multichannel retargeting. Shoppers are shown the same ad for two or more products with the intention that they will be more likely to convert when presented with more than one option.

This type of retargeting campaigns has been the ultimate solution of a wide rage of retailers for reducing the costs of customer acquisition. The market for multichannel retargeting is therefore growing fast, especially for retailers and brands with a wide range of options to increase your potential customer base.

Customer Service

Ecommerce is the retail industry’s most pronounced trend over the past several years. Brands aren’t just selling on the Internet, but also through mobile websites, point of sale, catalogs, social, print, and now also TV. Boston Retail Consulting now uses an omnichannel approach to address this consumer behavior and improve their customer service at the same time.

In today’s omnichannel world, brands have more exposure to their customers than ever before. They’re able to follow up with those who purchased something via an email or who placed an order for something on social media. Many banks have also adopted the omnichannel approach to improve their customer service and the shopping experience.

The term omnichannel first entered the marketplace when Apple adopted the term to describe the features and functions it added to its more conventional brick-and-mortar retail establishment. Apple also understood the value of additional hands-on touch points, including home drive-thru kiosks.

Order Fulfillment

Inventory Management and Shipping.

When it comes to delivering your product, an omnichannel strategy allows you’re company to take advantage of faster and smoother distribution across mobile, web, and brick-and-mortar stores.

By integrating the entire customer experience in one place, you can eliminate gaps in your end-to-end process, boost sales, reduce costs and increase customer satisfaction.

Continuing to deliver an excellent result, you can now also meet your consumer demands by managing global inventory, fulfilment, and fulfil shipping.

To ensure that your ecommerce business meets its full potential, ecommery introduces Omnichannel Retailing and a guide to the complete omnichannel experience, taking into account mobile, web, and physical stores.

Analytics

There were two quick conclusions that came to mind when our research team started digging into the data, the first of which was the realization that analytics is redefining the way we’re thinking about and managing multichannel retailing. With that comes the assumption that retailers should be doing the same things as well. There are many great analytics tools out there to support retail success. However, the real issue is how many of these tools are being applied to the multichannel environment.

In our experience, just because a tool is available, doesn’t mean that it’s being used to its full potential. In fact, it’s not uncommon to find many retailers who are using the same analytics suite but without integrating or co-developing the tools with the various multichannel mediums and platforms. This has become the digital elephant in the room and one of the top challenges facing retailers today. In this multi-part series, we’ll cover the tremendous potential that analytics can hold for retailers and outline a few of the best ways to get started and the road blocks that are keeping you behind.

Successful Omnichannel & Multichannel Retailing Strategies

Sales and marketing are not separate departments. They are the same function, and they have the same purpose. Consider this quote from W. Edwards Deming, one of the earliest and strongest proponents of total quality management: ‘The purpose of the planning process is to change people, organize material resources, and design systems so that the resulting products and services achieve customer satisfaction.’

Sales and marketing are the two functions that work together to achieve this objective. In the world of marketing, where the fewest number of dollars are dedicated to the function, all other functions are also satisfied. In other words, putting a purely technical person in marketing and simply asking them to know about the product and what the company is trying to do is not sufficient.

Many marketers look at the data they have with the goal of immediately addressing a specific strategic issue such as making a sale. But they must do more than just take action after they see the data. Each person with limited resources must look at the big picture and think about which of their activities will make the biggest difference in the goal of getting customers. Therefore, the first step in marketing must play a major role in sales.

If people are not asking customers their needs and helping them to find new products or services in different formats, success for both sales and marketing is impossible.

Sephora

Evian’s retail channel is by far the most sophisticated in the beauty space.

As a parfum, for example, we go through “Conversational Mail Parcel” which is the equivalent of a package in the nonconsumer channel. It is three weeks of marketing content: a biography, an editorial, an influencer story, a video, a special section on good fragrance, all of those engaging images.

Within that is a full press kit, and at one point in time it is even a career guide for college students.

Then we offer that to wholesalers and retailers, who can then overlay it with other brands of the channel.

Wynn

Resorts, the master of Omnichannel Part 1.

Wynn is doing a lot of things right in the retail industry. They are constantly innovating and exploring new ways to deliver personalized, world class customer service to the 4 billion people that come to their website each year. This is quite a feat for a company as large as Wynn Resorts (the parent company of the Wynn/Encore complex in Las Vegas). The Wynn resort web page alone receives 15 million visitors in a month which equates to roughly 8,000 per minute.

Instructions for Superchargers are hiding out there, but so are many other tips:

Type in Supercharger on the Vehicle's menu on the Center Console

{1}. Enter the code on the outside of the driver door both forward and toward the rear of the vehicle.
{2}. Once the charging is done, you'll hear a chime

In the future, the charging cables will be integrated into the car's charging system, but this is not happening yet. Tesla has said they will start designing and manufacturing Superchargers this year, with production starting in 2016. Until then, the charging cables that have been used will remain in use.

M.A.C. Cosmetics

Magazine advertising accounts for more than 10 billion dollars in ad spend each year, but the cost of media isn’t the only thing that’s rising. As newsstand sales decline, and traditional newsstand distribution channels become more limited, organizations’ advertising budgets are focusing more on social, search, video, mobile, and viewable-by-others. Known as a ‘multichannel’ or ‘omnichannel’ approach, this integrated approach to marketing is quickly gaining traction.

Read on for a look at two variations of an omnichannel strategy and what it means for the future of M.A.C. Cosmetics.

Fresh

When it comes to fruit and vegetables, is a multichannel offer better than an omni-channel offer? The short answer is yes, if the store is consistent with their produce.

As you have probably heard from all your favorite suppliers, retailers are increasingly asking for a multichannel offer with any offer, in order to increase the chances of higher sales. But many retailers struggle with knowing how to implement a multichannel offer.

The most common mistake is that there is not a clear link made between the different channels and how they will affect the order from the customer’s point of view.

Most retailers if implementing an omni-channel offer, choose to send the same offer and copy to all channels. But if the retailer treats each channel as a different channel with different customer needs the communication can be optimized.

Targeting younger moms is usually simpler and often cheaper than targeting older moms, but the gray market always has an extra good offer for the mom’s.

In the case of fruits and vegetables the offer is natural: Adding the word –organic” to the produce selection, will increase sales.

But each channel needs to offer the same fruit and vegetables at a specific price in order to get the desired effect. For example:

Warby Parker

The Great Omnichannel Retailer?

Many have questioned the benefits of omnichannel retailing, saying that simply having an e-commerce website is not enough to truly differentiate from competitors. But in a market where consumers can’t tell the difference between products…. the whole idea of omnichannel retailing becomes much more important. And there’s no better company to demonstrate the benefits of doing it well than Warby Parker – the iconic eyewear retailer whose financial success is often attributed to their omnichannel retailing strategy.

So what does an omnichannel retailer look like? There are quite a few retailers who aim to operate across all customer channels as seamlessly and efficiently as possible. Warby Parker sets itself apart by not only operating on all channels, but doing so in a way that’s tailored specifically to each channel.

Warby Parker’s approach to omnichannel retailing focuses on the customer experience. Using your data, they strive to create unique customer profiles for each channel (retail store, website, mobile, and Home Try On function) that allow them to target each customer with different messaging depending on the channel and which products they’re looking at. Getting the messaging correct is key, as any missteps can lead to missed opportunities and lost sales.

Pros & Cons of Omnichannel Retailing

Pros of Omnichannel Retailing

Cons of Omnichannel Retailing

Today, customers demand, retailers need, and companies are implementing omnichannel strategies. This trend is over a decade old, but it has seen a recent surge among large retailers. Omnichannel retail focuses on customer access which means that businesses are investing in several online platforms such as e-commerce, mobile, social, POS, and physical channels. As businesses move towards omnichannel retail strategies, they face several growing pains. Companies are still learning what their customers want, and they want more than one way to reach them. Shopper behavior has shifted in that customers want convenience, personalization, and control. However, this also presents a risk because customers demand simplicity and control out of multiple channels. Surveys show that while companies experience an increase in sales and CSR scores, they lack trust in their salespeople because customers increasingly prefer the convenience of online shopping. Additionally, consumers are becoming increasingly aware of fraudulent behavior and they are less trusting in businesses. Summary: Omnichannel retailing is expected to become even more popular in the future. However, it comes along with risks and growing pains which will shape the future of retail.

Bottom Line

Omnichannel and Multichannel Retailing Are Here To Stay

Though not entirely new concepts, omnichannel digital customer engagement and multichannel retailing are two concepts that are bleeding through the retail world in 2009. Omnichannel retailing hopes to give a complete customer experience from every time they interact with Walmart or Amazon through every interaction they have with the brand. Multichannel retailing hopes to link every touch point into a single retail experience. The two concepts are mainly concerned with the retailer’s ability to bring in the customer through multiple channels and to maintain the customer. As these concepts begin to trickle through the retail world, the retailers that adopt them will be the ones to win customer service and loyalty. Additionally, omnichannel retailing should help a retailer in the transition to digital marketing. We’ll explain in this blog post how omnichannel retailing works, and we’ll provide some new tactics. We’ll also discuss the benefits retailers gain by adopting these strategies.