Omni-Channel Commerce and Multi-Channel Commerce: What’s the Difference?

October 22, 2024 - 11 minutes read

Breaking down the differences between these valuable practices

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Omni-channel commerce and multi-channel commerce are more than just industry buzzwords. With multi signifying “many” and omni translating to “all,” both concepts are systems designed to reach customers in a variety of ways. In the past, this might have meant a combination of brick-and-mortar stores, mail order catalogs, and delivery services. In the digital age, these concepts have taken on new meaning and importance.

Multi-channel and omni-channel are now fundamental strategies for marketing, customer service, and retail sales, but they are not one and the same. By taking a closer look at these different yet complementary concepts, we discover the important benefits and pitfalls of each, along with some strategies for leveraging the best features to optimize the customer experience.            

“You can’t wait for customers to come to you. You have to figure out where they are, go there, and bring them back to your store.” – Paul Graham

What is multi-channel commerce?

Multi-channel commerce is an approach to selling goods or services through multiple channels, including websites, mobile apps, retail stores, and shared E-commerce platforms like Amazon, EBay, and the Wal-Mart Marketplace. Since most customers have a preferred mode of shopping, multi-channel commerce allows retailers to reach a broader audience by providing a wider range of purchasing options.

One of the primary goals of multi-channel commerce is to keep product offerings consistent across each channel, even though there is no integration between the channels. Product placements, descriptions, and promotions can be tailored to the audiences frequenting each channel. The proven benefits of this approach have led to a 64% increase in multi-channel E-commerce sales over the past three years.

What is omni-channel commerce?

Omni-channel commerce also utilizes multiple sales channels to reach customers, including brick-and-mortar, online storefronts, and apps. Unlike multi-channel commerce, the goal of omni-channel is to integrate all the available channels into one compelling experience so that customers can shift between channels at will as they complete the buyer’s journey.

For example, a customer might shop for products on a retailer’s website, order through their mobile app, then drive to their local retail store to pick up the item they just purchased. Others might take the opposite approach, shopping for large or highly personal items like automobiles, jewelry or furniture in a retail location then conveniently completing the buying process online. When executed properly, omni-channel commerce provides a seamless transition between channels with personalized service that extends across all touchpoints.

Omni-channel vs. multi-channel: Side-by-side

A side-by-side comparison of omni-channel commerce and multi-channel commerce demonstrates how these two related strategies are also very different.

Omni-Channel	Multi-Channel
Integrated experience across channels	Separate experience on each channel
Personalized across channels	Personalized by channel
Data management unified	Data siloed by channel
Shared inventory pool	Independent inventory
Centralized order management	Channel-dependent order management
Integrated customer service	Independent customer service
Consistent branding	Variation in branding
Flexible order fulfillment	Limited order fulfillment options
Consistent pricing	Channel specific pricing
Unified payment portal	Multiple payment portals
Optimized mobile experience	Independent mobile experience
Cross-channel promotions	Independent promotions

 

Benefits of multi-channel commerce

While omni-channel commerce is clearly the more evolved approach, it is not the right solution for every retailer. Multi-channel commerce provides instant benefits by unlocking access to many different customer demographics. A retail storefront enhances brand recognition for those who prefer an in-person experience, while social media and websites reach more buyers accustomed to online shopping. Additional benefits of multi-channel commerce include:

• Decreased dependency on single revenue streams
• Improved insight into customer buying patterns and behaviors
• Opportunities for cross-selling and upselling to increase average order value.

Applications for multi-channel commerce can also be found within each individual sales platform type. For example, an E-commerce retailer might set up storefronts on Google Shopping, Wal-Mart, and Shopify simultaneously, each catering to slightly different demographics but collectively adding market share and brand recognition.   

Drawbacks of multi-channel commerce

Before jumping headlong into a multi-channel commerce strategy, E-commerce sellers and other retailers should consider some of the potential drawbacks and pitfalls. Expanding your footprint in multiple directions can be expensive and time-consuming. You will need to spend time managing all channels and developing tailored marketing approaches for each one.

Multi-channel commerce also increases operational complexity, making it harder to coordinate order fulfillment processes and customer service issues when each channel utilizes different processes. Channel conflict is another common pitfall where channels inadvertently compete against one another when market segments are not clearly defined.

Horizontal conflicts can develop between channels at the same level, like two E-commerce stores, while vertical conflicts might arise between channels such as a retail store and websites. These conflicts can lead to customer dissatisfaction when pricing, customer service, or quality is inconsistent.

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Advantages of omni-channel commerce

Much like multi-channel commerce, omni-channel commerce allows customers to begin their buying journey from many different touchpoints. However, omni-channel commerce brings the additional flexibility of starting and completing purchases on different channels with no loss of continuity. This is one of the reasons omni-channel customers spend 15-30% more than single or multi-channel customers. Additional benefits of omni-channel commerce include:

• Increased brand recognition and customer loyalty
• Unified view of all inventory levels and order status
• Streamlined sales and marketing strategies

Customer relationship management (CRM) practices are also simplified by omni-channel commerce, since retailers only need to collect a customer’s data once and unified data makes it easier to create insightful customer profiles and personalized experiences. This centralized data also supports more consistent and integrated customer service.

“Good service is characterized by several key aspects: The ease of resolving issues, the accessibility of information, and the integration of communication channels.” – Eric Buesing

Drawbacks of omni-channel commerce

The benefits of an integrated and seamless customer experience are obvious to both retailers and customers, but omni-channel commerce must be executed properly to add value. Connecting the channels through inventory management software can be challenging, especially when several different point of sale (POS) systems and inventory locations are involved. Creating promotions and personalized marketing strategies that resonate across channels can also be difficult, since each channel will be favored by customers with differing expectations.   

Overcoming these challenges requires retailers to design and test many variations of the customer journey to discover weaknesses or gaps in continuity that might discourage buyers. Automation can help to streamline order tracking, customer communication, and other processes that grow in complexity with each additional channel. The tools and technology needed to implement omni-channel commerce successfully might also require a significant financial investment that impacts the bottom line.

Omni-channel and multi-channel working together

How can you decide whether omni-channel commerce or multi-channel commerce is the best strategy for your business? Mega-corporations might begin their journey with a full-fledged omni-channel experience, but millions of E-commerce retailers and other small businesses bootstrap their way from website to mobile to in-person retail.

An organically formed multi-channel commerce framework can serve as a solid foundation for future omni-channel commerce expansion once the right software, architecture, and resources are in place to carefully roll out and test the system. Additional benefits of combining multi-channel commerce and omni-channel commerce concepts include:  

• Reducing redundancies and operational inefficiencies
• Building on the brand loyalty developed through individual channels
• Differentiating from single channel or siloed multi-channel competitors
• Improved customer data utilization and insights

Omni-channel vs. multi-channel: Final thoughts    

When companies like Sears Roebuck & Co. began to supplement their vast retail empire with mail order catalog services over a century ago, they realized each retail and marketing channel was complementing the other. What they couldn’t have imagined is the breadth of E-commerce, mobile, and in-person options that would one day be available, and the new opportunities this would present. These earliest attempts set a precedent for the successful multi-channel and omni-channel strategies of today.

Cloud-based Agiliron software solutions, including inventory management, mobile point of sale (POS), warehouse management, and full-featured CRM help to establish a  diverse and unified customer experience by seamlessly integrating with all leading E-commerce platforms. Agiliron also provides an extensive library of templates to help you get new E-commerce stores up and running quickly. Our mobile point of sale (POS) lets you sell in more places while managing from one.

Multi-channel commerce and omni-channel commerce are important steps on the path to a unified customer experience. Inventory management software is a key ingredient that makes these experiences possible, while remaining invisible to customers. Our solution experts can help you discover the value of these concepts for your own business and buyer experience. Contact us today to learn more.