Consumer & Insights
In 2022, the online retail scene is changing at an astounding pace. Driven by technology enhancements, online retail is powered by the need to make it easy for consumers to shop for their favorite products and to streamline their digital experience across multiple channels. As such, online retail can be split into two main categories: omnichannel and multichannel.
While omnichannel is a buzzword that has been around for some time, it’s still mistaken for multichannel, especially when it comes to retail and eCommerce. Today, most retailers are multichannel, while very few are truly omnichannel.
In this article, we want to get deeper into the multichannel vs omnichannel standoff, revealing how retail companies can maximize their impact and how they can easily adapt to new ways of thinking by leveraging the true power of omnichannel.
Omnichannel vs Multichannel – Key Differences
Even if both omnichannel and multichannel involve the possibility of selling across multiple physical and digital channels, they differ in terms of how the customer experience is presented. For example, while a traditional multichannel retailer might have multiple physical stores and an online website, with the physical and digital channels being treated as separate businesses, a modern omnichannel vendor joins together all the touchpoints customers have with their brands, offering a more consistent and unified experience.
In simpler terms, in omnichannel, the customer’s experience is prioritized first, while in multichannel, the company focuses on its own channels and services. While all omnichannel experiences use multi-channel, omnichannel is quite different than multi-channel. For example, in omnichannel, the user might research a product online, and then switch over to offline, buying it in the store.
Here are four key distinctions between omnichannel and multichannel you that should be aware of:
1. The number of channels supported by each one
Omnichannel involves creating a comprehensive experience on every single channel your customers use. This means you need to be active on each one of these channels, and you need to provide a consistent level of engagement and design convenient paths to purchase on your website, physical stores, social media channels, marketplaces, third-party retailer websites, and partners’ platforms.
The more channels you use in your digital sales gateways will determine whether you are ready to utilize an omnichannel-first approach.
2. The customers’ needs versus the company’s needs
Another distinction between omnichannel and multichannel is that the former puts emphasis on the customer, enabling them to make a purchase through their favorite sales channels, while the latter focus on the company’s own needs and capabilities, driving the brand towards choosing channels based on profitability rather than the customers’ needs.
3. Each requires a specific level of investment and complexity
The truth is that omnichannel retailing doesn’t come cheap and easy. This process requires a higher level of investment, business change, and complexity than its counterpart. In order to integrate omnichannel within their processes, you will need to invest in stock monitoring tools, content compliance software, embedded solutions, analytics solutions, where-to-buy solutions, bespoke software development tools, and a wide range of similar digital products.
4. Omnichannel is capable of attracting more revenue
According to the latest research in retail marketing, brands that have a strong focus on omnichannel retail have a customer engagement rate of up to 3x higher than brands with a multichannel approach. Forbes adds to the importance of omnichannel by revealing that customer-centric brands enjoy up to 6x more revenue than their competitors that span a brand-centric approach.
How does Omnichannel Look into Practice – A Real Example
To better understand how an institution can use omnichannel to its full potential, we’re going to look at a real example of a company selling mattresses online.
Step #1: The customer enters the company’s website, adds a king-size mattress to their cart, but leaves before completing the order.
Step #2: Thanks to the high-end analytics, the company understands that the visitor is more likely in the consideration stage, but it’s not yet ready to make a purchase, so they decide to incentivize their lead by offering a whopping “20% off” for their next purchase if the user signs up to their emailing list.
Step #3: The company retargets all users who have abandoned the shopping cart, serving them ads on Facebook, Pinterest, Instagram, and Twitter with the “20% off” offer.
Step #4: The customer decides to give the mattress a try before buying it, so they leave the site once again. However, they subscribe to the newsletter.
Step #5: The company sends a follow-up email, inviting the user to visit their physical location. When in-store, the customer receives an extra 10% off, in addition to the “20% off” coupon they’ve already received online.
Step #6: The client finally makes a purchase. Within one week, he receives an email in their inbox with a message to leave a review for the mattress. The customer leaves a 5-star review and everybody is happy.
As you can notice from this example, the mattress seller has used an omnichannel approach, keeping the messaging relevant across all channels.
How can you Transition Towards an Omnichannel Approach?
Every single retail company that wants to get an edge in its niche needs to be able to start its own journey with a bespoke omnichannel approach. The omnichannel implementation should be performed with unique business needs in mind.
In order to transition towards an omnichannel approach, your business needs to work closely with some of your key stakeholders. The list includes the market team, product division, sales team, and customer support department.
By including all of these departments early in the process of migrating towards an omnichannel approach, you can pretty much guarantee the success of your approach. Each department is crucial in this endeavor and has a vital role to play in ensuring the omnichannel approach is properly implemented.
If you are interested to learn more about the tools and methods you can use in order to benefit from an omnichannel approach, do not hesitate to get in touch with us.