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Multichannel Vs. Omnichannel Retail

Boaz Gam

Boaz Gam

CEO

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27.09.2021
9 min

What’s the Difference Between Omnichannel and Multichannel Retail?

Article content
  1. The Difference Between Omnichannel and Multichannel Retailing
  2. Omnichannel Vs. Multichannel Customer Experience Comparison
  3. What Is Cross-Channel Retail?
  4. Which Approach Should You Use for Your Business?

Every retail business strategy aims to build customer loyalty and ensure an excellent shopping experience. To succeed at this, it is important to track the consumer journey and have a competent strategy that covers every point of interaction with the customers.

Nowadays, there are multiple approaches for companies to choose from, with multichannel and omnichannel retailing among the most widely used ones. Read ahead for a detailed overview and comparison of these two strategies, alongside tips on which one to integrate into your business and marketing approach.

The Difference Between Omnichannel and Multichannel Retailing

What’s the Difference Between Omnichannel and Multichannel Retail?

Even though both omni- and multichannel solutions deal with multiple offline and online sales outlets, they implement different approaches. Let’s start the comparison by taking a look at their definitions:

Multichannel Retail

What’s the Difference Between Omnichannel and Multichannel Retail?

Multichannel retail is a marketing and sales approach where a business uses multiple separate channels to attract customers and communicate with them. For example, a traditional retailer may have a physical store and a website with little interaction between each other.

The main advantages of multichannel retail are as follows:

  • Wide audience outreach. The more channels are involved in the promotion of your product, the more people it is likely to reach.
  • Tech simplicity. The multichannel approach provides you with the ability to communicate independently through different channels without the need to use complex software.

The main disadvantages of this marketing strategy are:

  • Varying pricing. The product pricing often differs from one channel to another, resulting in consumers flocking to one sales outlet with the lowest price. This ultimately leads to a smaller net profit margin.
  • Complex logistics. Managing product information across multiple non-connected sales channels might be a challenge. Besides, the merchant often needs separate warehouses for their offline and online stores.
  • Lower processing speed. The lack of synchronization between channels may lead to longer waiting times for the customers, which is not a positive factor for customer satisfaction.

An example of a multichannel retail strategy among well-known brands is Apple. It’s considered a “click-and-mortar” store, meaning that it operates both offline and online sales channels.

Yet, Apple’s land-based stores are primarily designed not for sales, but rather to complement its ecommerce platform.Thus, the company’s offline stores work as touchpoints with customers that support an immersive experience and boost brand loyalty.

Apple’s multichannel retail approach follows specific brand guidelines to ensure a consistent visual style across all online and offline marketing channels. This contributes to the perception of this brand’s overall shopping experience as holistic regardless of which sales channel is delivering it.

Omnichannel Strategy

What’s the Difference Between Omnichannel and Multichannel Retail?

Omnichannel retail, on the other hand, is a strategy that implies different channels integrated into one seamless system. The omnichannel technology enables the customers to interact with the merchant via any of the synchronized channels that are convenient for them. For more detailed information, check our comprehensive guide on omnichannel retail.

The major advantages of the omnichannel strategy for a brand are:

  • Seamless interaction system. The entire history of communication with the customer alongside product data and availability, regardless of the channel, is synchronized and easily accessible.
  • Higher client retention rate. The omnichannel approach contributes to an excellent consumer experience, which has a positive influence on the clients’ desire to return for more purchases.
  • Valuable data collection. This strategy also allows you to effectively collect customer data and analyze consumer behavior.

The biggest downside of omnichannel integration is considered to be the need to implement special software and update the organizational structure. However, with all-in-one solutions, such as the one from Payneteasy, this is no longer a reason to worry about synchronizing your business sales channels - read ahead for more details.

An example of an omnichannel brand that demonstrates an excellent job managing its online and offline channels as one inseparable mechanism is Zumiez. It’s a US clothing retailer that offers its customers items for sports like snowboarding, skateboarding, and motocross.

The omnichannel brand boasts click-and-collect orders, shared cart, in-store products search online, loyalty points across channels, and plenty of other perks, making its customer journey extremely convenient.

Omnichannel Vs. Multichannel Customer Experience Comparison

What’s the Difference Between Omnichannel and Multichannel Retail?

The customer journeys are a major difference between multichannel and omnichannel approaches. Here is an example of a customer’s experience with a brand using a multichannel retail strategy:

  1. The client orders a product on the website, but the item fails to arrive on time.
  2. The customer contacts the company’s offline store by calling to clarify the shipping issues.
  3. The sales assistant lets the client know that they have no information regarding the order, and the user must contact the website's customer support via email.
  4. The client writes an email to the customer support team.
  5. The next day, the agent responds with tracking information and solves the customer’s query.

As you can see, the physical store and the website in the example are not interconnected channels, which causes confusion for both the customer and employee and delays the issue’s resolution. Now, let’s take a look at what a typical customer journey looks like with an omnichannel strategy:

  1. The client receives a promotional email and proceeds to the website.
  2. Then, the customer starts choosing a product and contacts the store via a chatbot for extra information.
  3. After making up their mind to purchase the item, the person places an order online and selects the option of same-day pick up at a physical store.
  4. The consumer calls the store to confirm the order is ready to be received.
  5. Finally, the client visits the land-based shop and collects the product.

Here, the omnichannel process of switching between sales channels was seamless and convenient for the customer.

Thus, with a multichannel approach as opposed to omnichannel marketing, the retailers are not always able to maintain the brand image, ensure the integrity of the pricing policy, deliver the same quality of services, and provide equivalent access to goods through different business channels.

However, an average customer has little to no understanding of how many channels the brand uses to sell products and provide services. They are focusing on how smooth the shopping process is, how consistent the prices are, and whether the availability is matching on all commercial platforms.

Linking channels into an omnichannel system by introducing ecommerce solutions to physical stores enables the business to use them as a unified tool to deliver the best possible customer experience.

What Is Cross-Channel Retail?

Apart from omnichannel and multichannel marketing approaches in retail, there’s yet another strategy. In cross-channel marketing, companies use different communication methods, such as promotional emails, SMS campaigns, web push notifications, and so on.

Brands use several channels at the same time that complement the work of one another and enhance the overall impact on the customers. The performance of marketing strategies can be tracked simultaneously, allowing companies to calculate and analyze ROI.

Here’s an example of a common cross-channel journey for customers:

  1. A shopper decides to log onto a bookstore website to check out some products.
  2. The client then calls the land-based store to check the availability of a book at that specific location.
  3. The shop assistant answers that their location doesn’t have that book and suggests the customer inquires for it at another store of the chain, since they don’t have information about their stock.
  4. The customer decides to visit that store in person and gets the item.

In a store with an omnichannel marketing strategy, the customer would’ve been able to check for the product’s availability on the website.

Which Approach Should You Use for Your Business?

Now that the difference between omnichannel, cross-channel, and multichannel is clear, you can decide which strategy suits your retail niche and customer base better.

Generally speaking, when your goal is to create a new sales channel, it is likely that your company and customers will benefit from cross-channel communication.

An effective marketing strategy for a complex or a heterogeneous audience, on the other hand, is likely to require an omnichannel strategy due to its ability to cater to a variety of audiences through multiple channels that work together as one.

Finally, if your target audience is so wide and diverse that your customers will be better off using separate channels and don’t really need them to coincide, the multichannel retail strategy will work just fine.

All in all, as long as you realize where your company is at this point, which goals it’s facing, and keep your data collection and marketing channels up-to-date, you are doing a great job.

However, it’s crucial that you understand that both multichannel and cross-channel retail models are typically just temporary measures. As your company scales and as new payment trends keep arising, the omnichannel strategy will prevail due to its convenience and holistic approach.

Payneteasy Omnichannel Solution - Utmost Convenience for Businesses and Clients

What’s the Difference Between Omnichannel and Multichannel Retail?

The omnichannel marketing approach is clearly a more advanced system, making it one of the leading retail strategies today. With it, you can introduce a unified service standard, provide your customers with an individual approach, improve client experience, and increase brand loyalty.

So, why wait? With the help of a smart omnichannel solution, your business will thrive and increase its customer retention rate and revenues significantly. Luckily, Payneteasy is here to help you with updating your retail business approach across all sales channels.

Since 2006, Payneteasy has been successfully providing customers worldwide with payment solutions of varying complexity. When it comes to our omnichannel solution, you will be receiving a service with extra-fast integration and branded payment pages on the following purchase channels:

  • Websites. Manage multiple payment options for your clients’ convenience via a single interface.
  • Mobile apps. Our SDK library integrates the payment acceptance feature.
  • ChatBots in any social media channels.
  • mPOS and POS terminals at your offline sales outlets.
  • Phones using MOTO transactions.
  • One-touch payments via Apple Pay, Google Pay, etc.

The optimization of your business’s payment operations is our goal. Send us a request now, and we will get back to you with a custom omnichannel solution within the shortest time frame!

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Commentaries 4

Brendon R

Wow you got me intrigued with your omnichannel marketing concept, lol. So, I'd like to know which tools you will apply to make my small company work in such a perfect sync.
Respectfully, Brendon R.

What’s the Difference Between Omnichannel and Multichannel Retail? Boaz Gam

Hi, Brendon and thank you for your interest!
As I've mentioned in the article, we offer a repertoire of tools that make you entire enterprise work in unison.
They include various payment options, POS/mPOS terminals, quick payment acceptance, automated customer service with the help of chatbots, and more.
As a result, you can relieve the workload of you personnel (especially if it's small in numbers), synchronize data valuable for the clients, such as prices, number of items in stock, delivery dates, etc. And of course make the payment process fast, simple, and secure.
As you can see, omnichannel retail delivers quite a smooth customer experience. In turn, this can guarantee a greater customer retention.

Nicholas Fischer

Ho, Boaz! I read your article, but don’t quite get it: how are omni and multi approaches different? Isn’t it all the same thing?
Nicholas Fischer

What’s the Difference Between Omnichannel and Multichannel Retail? Boaz Gam

Hi Nicholas, thank you for showing interest!
You’re right — this multichannel vs. omnichannel dichotomy does sound confusing. But the difference is actually simple to understand.
Multichannel retail allows you to advertise and sell your stuff online and offline. Plus, you can easily stay in touch with your customers, update them on important news, etc.
Omnichannel retail does the exact same thing. But it also allows you to coordinate your efforts smoothly across all of your channels.
Thanks to omnichannel approach, you can accept payments right in your store or online. Locally of globally. In dollars or in Indian rupees, Brazilian reals, or Malaysian ringgits.
With its your marketing strategies can be truly universal. And in turn, it will lead to a better customer experience!

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