Omnichannel Vs Multichannel eCommerce: Complete Guide for 2023

According to research published in Harvard Business Review, 73% of consumers favor using various channels while making a purchase decision. Therefore, when you’re starting an eCommerce business in 2023 and want success in the digital realm, you can’t afford single-channeled retail anymore. But the big question all merchants face in the transition is which approach wins the battle of omnichannel vs multichannel eCommerce. 

LinkedIn shows 78% of businesses that leverage social sales do better than those that ignore it. Additionally, the chances of those businesses meeting their sales quota are 51% more. We already know that you want to be one of those businesses; otherwise, why would you even be here? 

But the problem is that customers aren’t just confined to a single platform. They’re on Facebook, Instagram, Reddit, TikTok, you name it! So it’s essential that your business is present on several channels and interacts with clients in diverse ways and there are two ways to do it – omni-channel or multi-channel retailing.

You’ve come here for an answer that perplexes many merchants seeking to scale their business online– which one is best for them? Don’t worry, we’ve got you covered in helping you choose one in this battle of omnichannel vs multichannel eCommerce. Simply keep reading till the end and you’ll know everything there is about each option. Then you can select the best option for you and your business. 

Let’s start by understanding omnichannel eCommerce first and see what it has to offer!

What is omnichannel eCommerce? 

Omnichannel eCommerce is a customer-focused sales and marketing approach that unifies the process across all different channels.

To put it simply, omnichannel eCommerce is the practice of merging formerly separate sales and marketing channels into a single operation. Omnichannel marketing takes the hub-and-spoke approach to create a single, seamless experience for the customer, in which individualized offers, products, and marketing campaigns are presented across several channels, including but not limited to:

• Websites,  
• Emails,
• Retargeted advertisements,
• Social media marketing,
• And brick-and-mortar stores.

Therefore, when you adopt an omnichannel strategy, customers may shop from anywhere they find convenient. But due to data synchronization between all these channels, instead of operating each channel separately, omnichannel takes into consideration the interaction across channels to provide a consistent and seamless experience for the consumer across all touchpoints. 

Let’s discuss some major advantages offered by omnichannel eCommerce that supports customer journey and prioritizes customer experience:

Advantages of omnichannel eCommerce

Seamless customer experience

Taking the consumer’s point of view, omnichannel customer interaction ensures that the customer experience remains uniform, uninterrupted, and seamless regardless of the channel or device used to initiate the interaction. You also provide your clients with consistent branding, this means, no matter where the buyer meets your brand, your messages and experience are always the same.

Personalization for customers

With omnichannel e-commerce, your business may gather and combine client information from a variety of online and offline sources. When put together, this information paints a clear picture of the demographics and habits of your brand’s most engaged consumers, empowering you to tailor your approach to each individual. 

Catering to your customer’s preferences and personalizing their experience results in greater lifetime value; therefore it is especially important for businesses with an omnichannel presence.

Offers flexibility to customers

Omnichannel eCommerce allows businesses to provide more options for the convenience of the customers. A business may, for instance, accept returns and provide refunds in stores for purchases made online, in addition to the usual mail-in and web-based options. Satisfied customers will be more likely to visit your store if you offer them more options, and that might mean more money in your pocket.

Because of these amazing advantages, many businesses have implemented omnichannel eCommerce successfully. We’ve listed some examples below for you!

Popular omnichannel eCommerce Examples:

Walgreens

Forbes recognized Walgreens’s mobile commerce app as one of the best in the United States in 2013. The pharmaceutical retailing titan owes its phenomenal growth to its adoption of an omnichannel approach.

Despite the fact that it’s an app designed for use on mobile devices, the emphasis here is on enhancing the in-store buying experience. Users may do the following with the convenience of the app:

• Check the status of their prescriptions, 
• Request speedy refills, 
• Browse shop specials, 
• And place orders for in-store pick-up.

Sephora

The Beauty Insider Rewards program at Sephora is designed to foster deeper connections between the company and its customers. If you’re a Sephora Beauty Insider, you are able to:

• Use the Beauty Bag from any computer or mobile device,
• May browse products, 
• See your wish lists, order histories, and reward points, 
• Scan products in-store to see similar alternatives online, 
• View how-to videos, 
• And locate nearby stores. 

In North America, this highly effective omnichannel marketing approach has fostered a membership base of over 17 million people who are responsible for 80% of the company’s sales and who also serve as a reliable source of free, positive advertising.

Starbucks

Starbucks does a fantastic job at creating a fuss-free, seamless user experience throughout the digital and physical realms. Customers may earn rewards by making purchases with their Starbucks card, whether they use a physical card in-store or tap the QR on the mobile app. Their app supports the customer journey in the following way: 

• Letting users locate nearby shops, 
• Sending presents and gifts, 
• Pre-ordering beverages for faster service,
• Browsing the latest menu additions, 
• And, as of late, using Spotify to listen to the music being played in any given location and add the tracks to their personal playlists.

Impressive, right? Looking at its advantages and these successful examples might make you feel omnichannel may be the right choice. But hold up! Before you make a decision, let’s look at some of its challenges too.

Disadvantages of omnichannel eCommerce

Although the biggest benefit of omnichannel eCommerce is providing seamless customer experience, incorrect implementation can result in worsened customer experience. This happens due to issues with channel integration or the difficulties of monitoring and assessing success. This brings us to the first challenge of omnichannel eCommerce:

Increased Complexity

Proper recognition and support for consumer behavior are crucial to the omnichannel approach. To successfully carry out the plan, you must understand your customers and provide them with helpful responses and comprehensive guidance at every stage. It takes a lot of time and effort to ensure effective integrations, gather the necessary data, maintain it, and then design strategies around that data. Additionally, the ability to use complex software that aids businesses in studying consumer behavior and preferences is another skill that may be necessary to implement.

Many retail facilities, some big ones, and many small ones face severe problems such as technological breakdowns, fulfillment difficulties, or insufficient stock over the time period of the study. This could result in a low return on investment (ROI), which brings us to the second challenge of implementing omnichannel eCommerce:

Expensive Implementation

An omnichannel eCommerce strategy will need appropriate technologies to be effective, which may be rather pricey. When implementing an omnichannel strategy, workflow-optimizing software is crucial. The omnichannel strategy calls for a platform that can easily adjust to changing client needs and circumstances. For omnichannel marketing to be successful, specialized technologies and people who can operate them are a must.

At this point, you have a complete picture of what omnichannel eCommerce encompasses. Let’s move on to understanding multichannel eCommerce so we can compare omnichannel vs multichannel eCommerce.

What is multichannel eCommerce? 

A multichannel approach simply means that your products and services are offered on different channels. You have options in terms of where you operate, but it does have individual standards for how businesses must operate inside the channel’s parameters. 

Multichannel eCommerce takes an individualized, point-to-point approach to selling products on different avenues. Your business sources products and services that reach consumers through different locations without interacting with one another.

The primary objective of multichannel eCommerce is to broaden the company’s consumer base by making the company’s goods and services accessible through more channels to appeal to a wider range of buyers. 

Unlike Omnichannel, where data synchronization supports inventory management and content distribution, retailers might have to aside specialized stock for individual sales platforms. They will also have to modify and optimize product names, photos, and characteristics for each channel individually. It can be supported by multichannel marketing that incorporates a wide variety of consumer interaction channels, including:

• Online websites, 
• Social media, 
• Email, 
• Mobile apps or messaging, 
• and Brick-and-mortar locations. 

Let’s understand the benefits of multichannel eCommerce to understand why many businesses still choose it when they could integrate the systems for an omnichannel approach.

Advantages of multichannel eCommerce

Despite not being completely integrated, multichannel retail allows firms to reach more potential customers and increase their brand exposure by providing them with many points of contact. Let’s discuss this and other benefits of multichannel eCommerce further:

Diversification of business communication channels

A company’s chances of successfully reaching its target demographic improve as the number of channels presenting its products and marketing campaigns grows. One of the main advantages of the diversity of channels is that it gives clients more options for how they may buy things. Having many different avenues to make a purchase might attract new clients of different demographics and give organizations an edge over their single-channel competitors.

Focuses on Information Delivery

One common objective of multichannel e-commerce is to spread knowledge about a company and its products. Every platform will develop and spread unique content within its audience. When a business wishes to increase sales, for instance, it may urge all of its channels to announce an impending discount to their respective audiences. After a campaign ends, businesses may use the data they gathered to learn more about which channel had the most impact with their offers on consumer behavior.

Independence from other platforms

Each of the channels in a multichannel framework may function autonomously. You can concentrate on strengthening your channels of communication if there are fewer channels to focus on. Additionally, you may do more in less time and with better outcomes. For this reason, it’s better to focus on the channels that prove to have the most traction with your target audience. This way, you may get the most out of the money you spend on marketing and advertising, and customer support. 

Now that you understand the benefits of choosing multichannel eCommerce, let’s look at some big names that employ this strategy. 

Popular Multichannel eCommerce Examples:

Gymshark

Gymshark is a well-known gym apparel business that became increasingly popular recently. It provides a trustworthy and adaptable framework for individualized customer service, site-wide promotions, and international marketing through multichannel marketing. Gymshark’s success may be attributed in part to the company’s creative marketing initiatives, which have been recognized by top officials at Facebook.

Vrbo

Vrbo, a vacation rental platform, distributes messaging and user-generated content throughout social media networks to increase brand awareness. It aims to facilitate online and mobile bookings for vacation rentals by coordinating its social media efforts with its business objectives and the demands of its consumers. Vrbo also works with cross-platform search queries and serves ads to users based on their search history to entice them to come back to the site while they’re planning their next vacation.

By now, you know the advantages of multichannel eCommerce and you’ve also seen some successful brands implementing it. Let’s talk about its challenges.

Disadvantages of multichannel eCommerce

One major disadvantage of multichannel eCommerce in omni channel retailing vs multi channel is that it won’t personalize customer experiences. Here are some related drawbacks of employing multichannel eCommerce:

Risk of inconsistent branding

The biggest difficulty in the multichannel approach comes from the need to be consistent throughout all channels. Unlike omnichannel eCommerce, it needs to customize branding and messaging for each channel. And usually, when you do that individually, it’s hard to keep it consistent. For example, Facebook interaction will likely unfold differently than an email one with multichannel eCommerce. 

Modifying your tone, language, format, and messaging style for each medium is a must to reach the people who use it. However, it doesn’t matter what medium you’re using to communicate, your brand’s values and voice must be reflected in everything you say and do. Doing so will increase the client’s trust and loyalty. However, with a multichannel eCommerce strategy, it will need significant time and effort.

Risk of misinformation

When you’re managing multi-channels for eCommerce, there will be times when you make an error with content on one or the other platform. You may even share outdated/incorrect/ambiguous information about your company by mistake. This happens due to human error when data is not synchronized throughout the system. 

Therefore, it will be crucial to review what goes on each channel and identify/fix content separately. If your clients feel misdirected with incorrect information, you might hurt your business. Make sure you communicate properly and consistently across all channels to avoid losing consumers and causing misunderstandings.

Time-consuming

Unlike integrated marketing through omnichannel, which would streamline stock management and order processing, multichannel marketing promotes separate channels. It might also take a lot of time to coordinate different systems, different tools, and different people. Problems like inadequate stock or a delayed response time for orders might arise when you’re trying to handle various channels.

Competition increases

When a business launches a new product, it might cannibalize sales of an existing one. This is sales cannibalism. Let’s use an example to understand– A store in one location suffers because of the establishment of a branch in a competing location. In multi-channel eCommerce, your two or more channels of sales and marketing might compete against each other. If the new product does well in the marketplace, it may eat into the sales of the old items, preventing the company from expanding its market share. Sales cannibalization is a prevalent problem in multichannel marketing due to the lack of connection across channels.

Which approach is best: omnichannel vs multichannel retail

By now, you know everything that you need to learn about omnichannel and multichannel eCommerce, along with its advantages and disadvantages. Some key distinctions in omni-channel retailing vs multi-channel are:

Approach	Omnichannel	Multi channel
Integration	All channels integrated	All channels function independently
Customer experience	Personalization and seamless experience	No personalization and could lack consistency in brand messaging
Data Synchronization & Analytics	Data synchronized through all platforms, enabling a holistic view of the customer journey	Little to no data synchronization; therefore independent data collection of the customer journey on each channel

We’re sure that in this battle of omnichannel vs multichannel retail, you might think that the answer is clear– omnichannel is the way to go. After all, omnichannel can actually be seen as the upgraded multichannel approach, where the business is enabled to shift the focus from sales and marketing to customer experience. And when you enhance customer experiences, sales just follow, right? Sorry to burst your bubble, but the choice isn’t as clear as you may think.

Whether you have a physical shop or a digitally native brand, it will influence the approach you take. It will take a lot of time and money to transform a physical store into an omnichannel one. Additionally, once implemented, you will also need to consistently work on it because if your omnichannel platform isn’t working properly, your customer experience will be worsened– and that’s counterproductive and wasteful.

When you want to adopt an omnichannel approach, you’ll need to invest considerable money into:

• An appropriate infrastructure, 
• Tech stack, including a powerful content management system (CMS) supported by a product information management (PIM) system,
• And a skilled system development and management team.

From our long-term experience in the field, we believe the best way to go about it is to start with a multichannel eCommerce approach and eventually transition to omnichannel operations. If you don’t have your own IT department, you can leverage third-party partners with experience in such projects. They can help you provide your customers with a streamlined shopping experience and you’ll have two major benefits:

• No need to develop anything from scratch
• No investing in purchasing expensive technology 
• No need to hire in-house professionals.

According to research by Arlington Research, almost half of the omnichannel retailers contracted their omnichannel activities in 2020 and more than 54% of them stated that doing so was their intention for the foreseeable future. By doing so, they save costs and time and free your in-house resources. 

Anglara is an expert custom eCommerce solution provider. We’ve worked with businesses in several sectors for eCommerce mobile app and website development. With extensive experience under our belt, our experts of can help with a smooth transition of your local business into an international omnichannel retail store. We provide you with all the resources– tech and skills– to start with a multichannel approach, and smoothly implement a headless business system start. Have questions about our process or would like to discuss your project? Simply schedule a free 30-min consultation appointment with us by filling up the form below. We’ll get back to you in no time!