What is the difference between multichannel and omnichannel commerce?
As the digital world becomes increasingly interconnected, retailers looking to build future-proof shopping experiences encounter the possibility of building both multichannel and omnichannel commerce experiences. Since the two approaches serve different purposes and provide distinct advantages, it is important for businesses to understand the differences in how multi channel and omni channel commerce are defined.
What is multi channel commerce?
Multi channel commerce involves retail brands having a presence on multiple channels, such as physical stores, web shops, mobile applications, social media, and online marketplaces. It focuses on extending catalogs and reaching buyers on the channels they prefer to shop from. The multi channel approach is advantageous for small businesses looking to expand their presence rapidly, who cannot yet afford to build their own integrated ecosystem of sales channels. And that’s where omnichannel differs.
When to choose multichannel commerce
- Rapid Market Entry: for businesses looking to enter the market quickly and test the waters, the multichannel approach offers minimal complexity.
- Resource Constraints: for businesses with limited resources that can't immediately invest in extensive integration and data analysis, multichannel commerce provides a more accessible entry point.
- Diverse Product Lines: for business offering a wide range of products with varying target demographics, a multichannel strategy can help you reach different customer segments efficiently.
What is omni channel commerce?
Omni channel commerce aims to provide a seamless, consistent, and integrated product experience across multiple channels such as physical stores, websites, mobile apps, social media, and conversational commerce. Omni channel commerce involves implementing e-commerce integrations to combine all these channels into a unified and personalized customer experience. This allows customers the convenience of starting a purchase on one touchpoint or device, continuing it on another, and then ending it on a third one. It involves customer data being synchronized across all these connected channels in real-time, enabling customers to have all their shopping information seamlessly available on all touchpoints.
When to choose multichannel commerce
- Rapid Market Entry: If your primary goal is to enter the market quickly and test the waters, a multichannel approach can get you started with minimal complexity.
- Resource Constraints: If you have limited resources and can't immediately invest in extensive integration and data analysis, multichannel commerce provides a more accessible entry point.
- Diverse Product Lines: If your business offers a wide range of products with varying target demographics, a multichannel strategy can help you reach different customer segments efficiently.
A simple real-life example to explain the difference between multichannel and omnichannel is Amazon. Brands that sell their products within Amazon are examples of multi-channel experiences, while Amazon itself is an omnichannel experience. Let’s explore the bigger differences between these two approaches.
The differences between multichannel and omnichannel commerce
The key to the difference between both approaches can be found in the terms themselves. The “omni” in omnichannel comes from the term “omnipresent”, which refers to the same entity existing simultaneously in multiple places, as one unified experience. As explained, every channel that the product is sold from is interlinked with other channels and devices in an omni channel experience, and all these connected channels exchange customer data in real-time.
On the other hand, multi-channel means for products to be sold on multiple channels, where the shopping experience on one channel doesn’t have to be interlinked across other channels. The products are sold within the confines of each independent channel, catering to a specific aspect of the customer journey, and customers can buy them from a channel they prefer. For instance, customers can buy their next smartphone from an online marketplace instead of from the official website of the smartphone provider.
To delve deeper, here’s how these differences in the multi channel and omni channel approach actually make a difference to the customer experience and to the business itself:
- The multi channel vs omni channel difference: expanding product visibility
When it comes to expanding reach across a wider variety of similar channels, multi channel commerce is more advantageous for businesses. Since it isn’t an integrated approach, businesses can list their products across multiple online marketplaces, physical stores, and via other B2C avenues, ensuring greater product visibility across multiple channels.
Omni channel commerce on the other hand focuses on a more integrated approach within the brand’s ecosystems. Thus, it will involve connecting fewer external sales channels and more internal sales channels. So, for instance, H&M or IKEA will provide an omnichannel experience, where the customer can enjoy an interconnected shopping experience within the brand’s physical store, web store, mobile application, or any other channel that the brand adopts.
Read more about how businesses can build a seamlessly integrated omni channel experience →
- The multi channel vs omni channel difference: improving personalization
Omni channel commerce offers businesses a clear advantage in providing more personalized experiences to customers. By unifying customer profiles across channels, brands can highly tailor and individualize product experiences for customers, from targeted promotions to personalized product recommendations. Allowing customers to see all their purchase history, preferences, and rewards replicated across all the brand’s channels, increases brand loyalty and reliability, while providing better opportunities for customer support.
In contrast, multi channel commerce is a fragmented approach and relies on the personalization and shopping convenience of the channels that host their products. Customer data isn’t shared or seamlessly connected (by default) between channels in a multi channel experience, which makes it difficult to build personalized customer experiences. Thus while multi channel commerce will increase revenue and sales, it most likely won’t have the same brand-building effect of an omni channel experience.
- The multi channel vs omni channel difference: data-driven insights
Omni channel commerce involves building an integrated data ecosystem. By centralizing customer data from different touchpoints, business preferences, behavior, and purchase history, omni channel commerce provides great data-driven insights. Analyzing this data can help businesses get a holistic view of customer journeys, personal preferences, and purchase patterns. This can help them make informed decisions, deliver highly personalized experiences, and adapt swiftly to evolving customer needs.
In multichannel commerce, businesses typically operate different channels independently, leading to fragmented data silos. This can make it challenging to gain similar data-driven insights, and although many external channels like marketplaces do provide detailed customer insights, businesses still have to consolidate this data with their own customer data.
The catch in the multi channel and omni channel difference
Omnichannel commerce delivers personalization but requires substantial investment and commitment. Multichannel commerce provides flexibility and quick market entry, making it a practical choice for businesses with resource constraints or diverse product lines.
However, if you’ve not caught it already, here’s the catch: brands that build an omni channel commerce experience can also simultaneously build a multi channel commerce experience, and vice versa. Thus, a business can always start off with a multi channel approach and then move towards developing omni channel experiences as they grow. Also, there are new integration solutions that allow businesses to pursue both approaches simultaneously. That’s where iPaaS (integration Platform as a Service) comes in.
Bridging the gap between multi channel and omni channel with the iPaaS
While multi channel commerce and omni channel commerce have been established as distinct approaches, it is important to note that there is there is an alternative that helps bridge the gap between the two approaches. It’s called the iPaaS (integration Platform as a Service).
The iPaaS is an API-driven middleware solution that helps integrate multiple channels, applications, and data sources on one secure cloud space. It enables real-time data exchange, workflow automation, and data transformation across connected channels and applications. In the case of multi channel and omni channel commerce, the iPaaS can help businesses integrate external and internal sales channels.
Discover how Verfinwinkel.nl used the iPaaS to seamlessly integrate around 4 systems with real-time data exchange, while also ensuring their marketplace sales were processed through their e-commerce platform. Read the full case study →