MULTICHANNEL SALES   |   3 minute read

The difference between multichannel and omnichannel retail

Futurology, or the systematic forecasting of the future based on present trends, has been instrumental in pushing us to improve, advance, and grow as a civilization. This is hardly a new idea - a brief glance at Leonardo da Vinci’s body of work is proof of that.

We’ve now reached a stage where the internet has become the tool that we use to acquire most of the information we use to make decisions.

In The New Rules of Sales and Service, David Meerman Scott says that businesses no longer hold the ultimate power in deciding what consumers buy and when. With consumers just as able to access information as those who sell to them, it’s no longer possible to profit off asymmetry in information. This notion is fast becoming conventional wisdom.

Instead, the pressure is now on for retailers to offer consumers a value proposition that they can’t refuse.

It seems like the long term vision is that the world is becoming more like the Jetsons' world, with technology incorporated into every corner of our lives. So what does the play-by-play adoption of this vision look like?

Multichannel and omnichannel retail

Although the two terms are sometimes used interchangeably, multichannel and omnichannel retail are actually completely different concepts.

But what exactly is the difference? 

multichannel omnichannel

The biggest difference between multichannel and omnichannel retail is that the former focuses on the different sales channel offerings, whereas the latter is much more consumer centric. Omnichannel retail focuses on enhancing the customer experience by offering more flexibility to consumers to engage with the brand as they wish.

The evolution of the consumer

A little history might be useful in understanding the gradual transition from the multichannel to the omnichannel model.

Mass media was the primary catalyst for launching the multichannel movement - and to some extent, it continues to be the overarching strategy that dominates the retail landscape.

Even retail giants will typically gravitate towards a multichannel strategy. After all, with different segmented sales channels, it’s far easy to calculate sales metrics this way. “X investment in Y channel brought in Z amount” might be a report that’s generated for the management team. Under that model, management can easily evaluate how effective different channels are operating and make business decisions based on Return on Investment (ROI).

multichannel omnichannel

Omnichannel retail completely breaks this model.

At no other time in history has calculating ROI from different marketing channels been so complex. Since consumers are engaging with so many different channels during their purchasing decision, it may be difficult to evaluate each channel to measure its individual effectiveness. Since different mediums are working in tandem, it's integral that channels are evaluated holistically.

For instance, a Google research report says that 8 in 10 smartphone shoppers use their mobile in-store to help with shopping. The entire shopping experience transcends channels.

Depending on your business model and industry, there are likely to be significant differences in when and where you make contact with potential customers. Ensure that you have a clear strategy that takes into account all the channels and resources that your customers might use in the buying cycle. Having a more comprehensive understanding of customer behaviour is key to success.

Challenging but rewarding

For marketing and sales professionals operating in the retail landscape, it's clear that consumer behaviour is increasing in complexity. The juxtaposition of different personas, purchasing habits, and sales data are all contributing factors to understanding what customers are doing and how they're buying.

Using technology and big data to map out some of this information will allow retailers to identify touch points that can show better results. It's only through continued experimentation that retailers can understand what the omnichannel experience looks like for their customers.

Omnichannel retail is far from complete as a strategy, particularly with regards to establishing best practice. There’s still a lot of room for experimentation, and as consumer habits and expectations evolve, retailers must learn to keep up or lose ground to competition.

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