Battle of the Buzzwords: Why ‘Omnichannel’ Beats ‘Multi-Channel’ eCommerce

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Steph Fenton
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Believe it or not, there’s a gulf between ‘multi-channel’ and ‘omnichannel’ eCommerce.

Yes, they’re both buzzwords. Yes, they were both born out of the ongoing explosion in different sales channels. And yes, they’ve both been said so many times and for so long that we’re tired of hearing them.

But there’s also a vital difference here.

It’s a difference you can measure in your marketing ROI, in your creeping operation costs, and in your long term business growth. In short, it’s a difference every e-tailer should care about.

So here’s our guide to these two elusive terms, and exactly why they matter.

Multi-channel: the choice is yours

A ‘multi-channel’ approach means tackling the explosion of sales channels head on. It’s about meeting consumers wherever they prefer to be.

Simply put, multi-channel strategy means getting out there onto ‘multiple’ channels - the more the merrier.

Part of the shopping boom that’s doubled mobile commerce since 2010? Have a favourite marketplace in mind? Or are you like the 37% of consumers whose main shopping inspiration is social media? (PwC, Consumer Insights Survey 2018)

Whatever a consumer chooses, a switched on multi-channel retailer will have them covered, with a well-optimised platform ready at hand.

Being multi-channel is pretty much a given in modern eCommerce, and for good reason. When 73% of shoppers use multiple channels to make retail purchases (McKinsey), more channels means more ways to drive sales, boost revenue and ultimately grow your business.

At least, that’s the theory.

Friction burns

The reality of shopping across channels is a little more complicated. Because consumers don’t just live their whole shopping lives in one channel - they move around.

“A consumer might get inspired to make a purchase on social media,” explains our own Chris Maule, “but that doesn’t necessarily mean they want to buy then and there.

“For example, they might flick over to their preferred marketplace instead - maybe Amazon, maybe a price comparison site - so they can compare a few options. And when they do find an option they like, that consumer might head over to your desktop site and do some in-depth research, before buying a few days later from their phone, and expect to collect it in store at a time that suits them.”

A purely multi-channel retail strategy can’t cope with this kind of consumer. Multi-channel gives you a presence on all the right channels, sure, but it can’t link them together. Instead each channel operates in a silo, making sales and running operations in isolation.

The result is all too often a fragmented customer experience.

Enter the omnichannel

These days ‘omnichannel’ sounds like old news, another well-worn buzzword with plenty of years behind it. But it’s still achingly relevant for achieving growth in eCommerce.

Omnichannel strategy is a more sophisticated response to the growing range of shopping channels. It’s not just about meeting the consumer on multiple channels; it’s about making sure that they have a single, seamless experience across them.

“Simply put, omnichannel is multi-channel done properly!”
- John Bowden, Senior VP of Customer Care, Time Warner Cable

Being omnichannel is a far more ambitious goal than multi-channel. It also offers far, far greater rewards. But is it really worth the extra time and investment to turn your multi-channel approach into a genuinely omnichannel eCommerce experience?

4 reasons to go omnichannel:

1. Popular demand

‘Omnichannel’ certainly isn’t a niche concept for consumers. Over 77% of shoppers want a more unified multi-channel experience - but just 20% of retail businesses say providing one is a strategic priority for 2018 (Manhattan Associates).

There’s an obvious gap between what consumers want, and what retail businesses are providing. This is a ripe opportunity to simultaneously delight your consumers, and stand out in a landscape where even the biggest eCommerce players struggle.

2. Smarter use of staff time

The few extra seconds it takes for your warehouse team to manually log and chase stock can quickly add up, especially in peak season. That effect is multiplied tenfold when you’ve got different teams juggling different channels.

Omnichannel operations achieve a single inventory view across all channels, keeping teams across your entire business on track and on time - slashing costs while getting more from your back end operations.

3. Reduced stock holding

eCommerce inventory management can end up being a serious headache for retailers: either pay the price for larger reserves, or face the possibility of that dreaded ‘out of stock’ notice on your website.

The good news is that an omnichannel system sidesteps this conundrum. When you can see where your stock is across all of your channels, locations and suppliers - and see when you’re projected to sell-through - you’re primed to take swift action to maintain the precise level of stock needed.

The result is a smoother shopping experience for your customers, and warehouse investment freed up to start generating real ROI elsewhere.

4. Better marketing

Omnichannel operations are built on a ‘single customer view’, tracking customers across every channel they interact with - whether that’s in-store, online, mail order, events, or another channel altogether.

That gives omnichannel e-tailers a wealth of data to work with, and the ability to really get under their customers’ skin to learn what’s working, what isn’t, and where and how the business can move for maximum returns and future growth.

Final thoughts

The hard work starts here. Getting omnichannel right is an immense opportunity for mid-sized retail businesses. Do the hard work - line up a genuinely seamless experience - and you might be stealing a march on even your biggest competitors.

But achieving omnichannel is easier said than done.

To get omnichannel tactics in action and working for your business, and slot them into your broader game plan for eCommerce growth, download our free eBook Beyond the Hype: Four Fundamentals For Sustainable eCommerce Growth.

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