The way companies engage with their customers online and in-store has radically transformed over the last two decades and is something that is continuing to evolve. The complex landscape can include a mix of e-commerce, social selling, marketplaces, physical stores and multi-brand stores, with advertisers using 2.7 channels on average to promote their products online.
Multichannel and omnichannel are common buzzwords that represent two different sales strategies. There are similarities between the two, however, there are also several key differences that set them apart.
Selecting the right sales strategy for your business is fundamental, so in this article, we explore both Multichannel vs Omnichannel marketing in depth, to arm you with the insight needed to make the right decision for your business.
Understanding the difference between omnichannel and multichannel strategies is crucial for businesses looking to optimize their sales strategy. Although these two approaches share the common goal of reaching customers across multiple channels, there are some clear differences.
As the name suggests, multichannel marketing refers to e-commerce brands developing a strategy across multiple channels. The main aim is to create multiple touchpoints where customers can interact with the brand, whether that’s on a website, social media, email or in physical stores.
Multichannel marketing increases a brand’s reach and visibility thanks to its presence across lots of different channels, however, channels can operate in isolation from one another.
Check out these 8 Tips on how to master your multichannel e-commerce strategy, ideal for businesses looking to expand their reach and increase sales.
Omnichannel marketing is similar in that it’s about adopting a multi-channel approach, however, the main difference is the customer-centric nature of omnichannel marketing. With omnichannel marketing, the chosen channels work in harmony to provide a more seamless, integrated and consistent experience for customers hence why it is customer-centric.
For example, as customers switch between channels, an omnichannel marketing strategy will ensure the messaging and overall experience remain consistent. This, in theory, paves the way for a more personalized and coherent experience for customers.
Let’s take a look at some of the main differences between an omnichannel and multichannel strategy, in their approach to channels, customers and implementation.
Source: Clevertap
|
Strategy |
Omnichannel |
Multichannel |
|
Channel Approach |
|
|
|
Customer Focus |
|
|
|
Implementation |
|
|
With each of the two approaches to e-commerce marketing having distinct differences, it can be hard to determine which option is right for you especially as there’s often no right or wrong answer.
Although it ultimately boils down to individual business objectives, flexibility and resources, it is also good to understand the pros and cons of each to help determine what the best strategy might be. Let’s take a look:
Firstly, let’s look at the main pros and cons of an omnichannel strategy, now that we know the fundamentals of this approach and how it differs from that of a multichannel approach.
With an omnichannel approach, the main benefits are centered around customer experience and how that can translate to better performance. So, how does that compare to a multichannel approach?
You can overcome many of the problems of multichannel management if you decide to use a multichannel management software like DataFeedWatch.
The advantages and disadvantages of omnichannel vs multichannel ecommerce marketing suggest that an omnichannel approach is more sophisticated, however, it comes at a greater cost. One question businesses face is whether or not it’s worth the additional time and expense. There are also gains to be had from a sales volume and reach perspective when considering a multichannel approach.
In the US in 2023, the number of channels used by retailers decreased by more than 25%, something that was also true for places like New Zealand and Finland. In fact, most e-commerce sectors see a significant decline in channel usage. Channel adoption is changing too, with the majority of fashion marketers including TikTok in their paid strategy. A new study by Accenture forecasts that social commerce will grow three times faster than traditional e-commerce.
This could suggest there’s been a shift towards quality over quantity when it comes to choosing the right marketing channels. Perhaps businesses are now decreasing the number of channels in their strategy, however, they are putting more effort into consistency and integration.
If it’s not immediately obvious which strategy is right for your business, then there are two further concepts to bear in mind. Considering the advantages and disadvantages of each strategy, paired with the below, you should be in a stronger position to work out how best to move forward.
Consider the level of investment you have at your disposal and this isn’t just from a financial perspective, but also from a time and resource perspective. Implementing a multichannel approach will require a lower investment in comparison to omnichannel, therefore if you are also strapped for time, money and resources, perhaps a multichannel approach is the best fit.
Alternatively, if you do have the required investment and there is perceived value in investing in the infrastructure and technology needed, consider omnichannel as the solution.
The second consideration is whether or not it’s possible to unite all of the channels internally, based on the agility and flexibility of the company. Rewarding individual channels and departments that deliver the highest number of sales will pose a challenge in adopting an omnichannel approach.
Instead, the focus should be on the unity of channels, with the overall goal in mind to boost customer experience. Channels should be looked at together and company culture should also reflect this.
If you’ve decided to adopt an omnichannel marketing approach, work through the five steps below to form an action plan that will help aid the transition.
If your chosen approach is multichannel, discover how one retailer managed to generate a +451% ROAS Increase from Google Shopping as part of their multichannel selling strategy.
The first step is to achieve a better understanding of your customers and to do that, you must consolidate data and customer information. This includes online channel data with offline data, from performance to data on consumer behavior.
For example, if a retailer can collect and consolidate data from online purchases, in-store loyalty cards, and mobile app interactions, this will help form a central customer database.
From there it’ll be easier to create a well-rounded customer profile, including purchase history, preferences, and even individual customer feedback. What can follow is the ability to identify patterns and trends, discover who the high-value customers are, and personalize marketing efforts.
Unifying data is the first step to creating a more customer-centric strategy and a way to monitor and improve the customer's journey before and after a sale.
Once channel data is unified, the next step is to map out your customer journey so that you can visualize it from start to finish. This will highlight opportunities for improving or even just developing engagement with consumers.
It could be as simple as identifying where the highest number of cart abandonments take place, once consumers have added items to their basket. Identifying this can help e-commerce businesses take the necessary steps to reduce cart abandonments, whether that’s with email reminders, discounts, incentives to encourage a purchase or a retargeting campaign. If the company has an app, it could also include sending push notifications to the users to encourage or incentivise the transaction.
Mapping out the customer journey should provide you with a clearer understanding of where things can be improved and how channels can work together with one end goal in mind.
The third step in adopting an omnichannel marketing approach follows nicely from the previous two steps. Connect and align sales channels to facilitate seamless communication and coordination as well as a cohesive experience for customers.
For example, a busy restaurant will benefit from connecting its online reservation system with its point-of-sale system in the restaurant. This means that when a customer makes a reservation online, the restaurant staff are immediately informed so they can prepare for the reservation and manage numbers.
Or if a customer orders a product online and wishes to return that product to a nearby store for convenience, connecting online and offline channels to facilitate this for the customer should be part of an omnichannel strategy. It improves the overall service and customer experience and then relates to the previous steps of unifying data and mapping the entire customer journey.
As a way to boost engagement and increase customer experience, tailor content and messaging to match individual customer preferences and behavior. From recommending relevant products based on past purchases or online behavior or speaking to your customer segments in a tone that they can relate to and understand.
For example, if a customer frequently browses athletic wear, it would be appropriate to send them tailored emails featuring the latest activewear arrivals. Not only will the customer feel more understood, but it can also increase the likelihood of generating a purchase.
One of the considerations when adopting an omnichannel approach is the ability to invest enough time, capital and resources into the strategy, to ensure it’s a success. Analyzing and testing your strategy is one of the main reasons why this level of investment is required.
Testing and analyzing should be ongoing in order to refine your omnichannel marketing approach and optimize it. It’s unlikely that the strategy will be a winning formula from day 1 and instead, it’ll need to be measured and tweaked, so that the strategy can evolve to boost effectiveness and customer engagement.
Here’s a selection of multichannel vs omnichannel examples that showcase how global household brands have found success with their sales strategy.
Source: Nike
Nike is a recent example of omnichannel retailing, whereby the brand has put a lot of effort into changing its approach to improve the experience for its customers. This has been fuelled by a digital transformation, a decision made to help Nike stay current and relevant amid the evolving e-commerce landscape.
Nike’s goal is to create authentic two-way interactions with customers and provide consumers with an experience that is both unique to Nike, as well as unique to each person.
Firstly, this is achieved by collecting large amounts of customer data via their Nike Plus App, along with customer data on general online shopping behavior. Data analysis and insight into consumer behavior have allowed Nike to personalize the retailing experience to individuals based on behavior.
As well as this, Nike is focusing efforts on brand loyalty by creating a community experience within their app, allowing consumers to go from in-store to online and receive their tailored shopping experience.
This omnichannel approach is earning Nike high customer satisfaction from its seamless offline-online integration.
Source: WanderDisney
Another stellar example of a multinational organization that excels in delivering a seamless omnichannel experience is Disney. From their well-designed e-commerce website that’s responsive and mobile-friendly, to the customer experience for those lucky enough to visit one of their theme parks.
For those traveling to one of Disney’s parks, they have a tool called ‘My Disney Experience’, which helps consumers plan their entire trip, from dining reservations to securing ‘Fast Passes’. Disney’s mobile app comes to life inside their theme parks, with maps and useful information about the rides and experiences.
It doesn’t end there - Disney has also introduced the Magic Band program, a tool that doubles as a hotel room key, a secure storage device for photos taken with Disney characters, and a place to order food.
Their comprehensive omnichannel approach is well thought out and well executed, down to the fine details of their customer’s experience.
Source: Heart.co.uk
Sephora is a renowned beauty store that sells personal care and beauty products and stocks roughly 340 brands, including its own brand. Sephora is another retailer that’s developed an exceptional omnichannel experience, seamlessly linking online purchases with in-store visits.
Personal touches in-store include beauty workshops and complimentary makeovers, however, Sephora also provides customers with in-store tablets so that customers can easily access their online accounts during their shopping trips. This is an excellent example of bridging the offline-online gap, something a lot of retailers struggle to do.
The success of Sephora’s omnichannel marketing strategy is the smooth integration of in-store technology to help customers make better informed and faster purchasing decisions. Thanks to this, the overall shopping experience for consumers is enhanced and customer satisfaction has been boosted.
Source: Shopify
High-growth fitness and apparel brand, Gymshark, decided to transition to Shopify Plus to improve their website’s performance and reliability. This move marked a pivotal moment in their approach to multichannel marketing.
In short, Shopify Plus is a fast, customer-facing portal that allows retailers to use custom-code promotions, which they’ve proven to be successful for e-commerce. Therefore, following the adoption of Shopify Plus, Gymshark reported a 9.3 times return on investment and an increase in overall revenue from the Black Friday event by +197%.
Shopify Plus has created the space for Gymshark to tailor and personalize customer experiences, execute site-wide promotions, and manage global campaigns more seamlessly. This is something that hasn’t gone unnoticed in the world of marketing, with many aspiring to replicate the success Gymshark has garnered.
As we have highlighted, choosing the right strategy depends on a business's ability to invest in the strategy and unite channels. One clear thing is the need for retailers and e-commerce businesses to evolve with the constantly changing times.
Something else that’s noteworthy is how across the globe e-commerce has seen a decline in the average number of channels that are being used. However, with 42% of advertisers planning to spend more on digital in 2024, this is likely to reignite multi-channel growth making it very important to establish an e-commerce sales strategy that will allow your business to flourish.
DataFeedWatch has put together a free comprehensive Multichannel Marketing Report that gathers valuable insight from over 16,000 e-commerce businesses spanning retailers, brands, and digital agencies. Download your copy to explore advertising and marketing trends, strategy and planning, as well as troubleshooting issues and unlocking an execution plan.