Let’s start with definitions …
Omni-channel (meaning, “all” channels) unifies sales and marketing to create a single commerce experience across your brand.
Multi-channel (i.e., “many” channels), while less integrated, allows customers to purchase natively wherever they prefer to browse and shop.
When it comes to commerce — not just ecommerce but the overlapping worlds of online retail, social selling, digital marketplaces, and physical storefronts — omni-channel vs multi-channel are the reigning buzzword champions.
Unfortunately, heat doesn’t always mean light. In other words, while omni-channel and multi-channel are hot subjects, that heat rarely produces clear guidance for execution and growth.
Developing a successful approach means (1) understanding the differences and (2) picking the one that’s right for your business. To do that, let’s look at each in turn …
Are you selling everywhere your customers buy?
For an executive look at the present and future of commerce, download The Enterprise Guide to Multi-Channel Ecommerce.
Inside, you’ll get one-pagers detailing …
- Comprehensive data on the opportunities and threats
- Merchant spotlights for insights on top channels
- A checklist for selecting the right multi-channel platform
What is “multi-channel”?
The primary reason confusion exists in the omni-channel vs multi-channel debate is due to the speed at which commerce is changing.
Take the modern classic Electronic Commerce: A Managerial and Social Networks Perspective. Now in its eighth edition and clocking in at 791 pages, the text devotes only a single sentence to multi-channel without a single mention of omni-channel:
“In today’s digital economy, click-and-mortar retailers sell via stores, through phone calls, over the Internet, and via mobile devices. A firm that operates both physical stores and an online e-tail site is a click-and-mortar business selling in a multi-channel business model.”
“Lately, there is a trend to open stores on Facebook and other social network sites, in addition to selling from their own sites.”
Thankfully, Wikipedia’s definition takes us far closer to the heart of the matter:
“Multi-channel marketing is the blending of different distribution and promotional channels for the purpose of Marketing. Distribution channels range from a retail storefront, a website, or a mail-order catalogue.
“Multi-channel marketing is about choice. The objective of the companies doing the marketing is to make it easy for a consumer to buy from them in whatever way is most appropriate.”
The paramount word is “choice.” Multi-channel marketing and sales enable customers to not only interact with your products through whatever medium is most natural to them … but to purchase through that medium directly.
The best metaphor for a multi-channel ecommerce strategy is a wheel with spokes.
At the center of the wheel is your product (i.e., a sale). On the outer rim of the wheel are your customers where each channel offers a separate and independent opportunity to purchase.
There’s nothing sacred about how many channels you sell on. The point is simply to offer customers the choice to buy from you on whatever channel they prefer … and then double down on the channels that prove most lucrative.
How does a “multi-channel” approach work?
As a real-world example, let’s take ecommerce mattress seller Leesa and examine four possible channels.
Number one, their website. To a first time visitor without an existing account, Leesa serves up two overlays to maximize their online store. First, a welcome message with a “$100 off” offer and a subtle seasonal touch:
If you choose to ignore that offer and, instead, navigate around the site on your own, a second overlay eventually appears. For me, this happened after I’d selected a mattress, added it to cart, and then decided to abandon my purchase.
When I moved my mouse to leave, a similar “$100 off” call-to-action popped up, this time accompanied by an email opt-in geared so that Leesa could target me later:
True to their promise, moments after leaving the site, I received the first in a series of emails geared toward first-time buyers.
Click “Finish Shopping” and you’re sent directly to the very cart you abandoned earlier with the $100 discount already applied:
While operating through both email and onsite, this one-two combination is essentially a single channel.
Number two, marketplaces. In addition to their ecommerce site, Leesa also lists and promotes their products on the world’s largest digital marketplace, Amazon.
After once again abandoning my cart without making a purchase — sorry Leesa — I went over to Amazon and searched for “mattress.” Not surprisingly, these are the very first sponsored results I was given:
The key with multi-channel, however, isn’t to simply list your products on marketplaces … but to go native.
As such, Leesa’s product page is far from a generic. Instead, Leesa offers the same robust online experience on Amazon as they do onsite, complete with a product video, social-proof, and a detailed explanation of their unique value:
Number three, Facebook. As you might expect, the next time I logged onto Facebook, I was met with the very same mattress and offer I’d left behind onsite as well as more textually and graphically robust ads in my feed:
Given the relatively high purchase price — as opposed to something like clothing — Leesa’s Facebook ads all drive me back to their site. Your own approach might instead allow customers to purchase natively through a Facebook Shop or Buy Button.
MVMT, for instance, does this with a host of their most popular products:
Number four, Pinterest. As a hypothetical example, Leesa could also list and sell their products natively on Pinterest through a Buyable Pin:
In a multi-channel strategy, each channel exists as a separate purchase opportunity. What channels you prioritize comes down to your product, the channel themselves, and testing.
What is “omni-channel”?
As with most online searches, Wikipedia’s definition — drawn from consultancy Frost & Sullivan — reigns supreme:
While somewhat thin, that same entry’s “Omni-channel retail” portion provides this expanded definition:
“Nowadays, customers tend to be looking for information in the physical store and, at the same time, they are getting additional information from their mobile devices about offers and possibly better prices.”
“The omni-channel strategy hinges on the idea that providing a seamless shopping experience in brick-and-mortar stores and through a variety of digital channels not only differentiates retailers from their peers, but also gives them a competitive edge over online-only retailers by leveraging their store assets.”
Certainly, the overlap between digital, social, physical, and mobile is a good starting point, and yet, even that definition doesn’t do justice to an all-encompassing prefix like “omni.”
To be omnipotent is to be all powerful. To be omniscient, all-knowing. Omnipresent, in all places at all times without exception … always.
Given those kinds of lofty ideals, what does it mean to be omni-channel?
In Omni-Channel Retailing, Tommy Walker offers what is easily the most expansive summary of the term:
“Omni-channel as a philosophy is about providing consistent, yet unique and contextual brand experiences across multiple customer-aware touchpoints, including brick and mortar, marketplaces, web, mobile and social.”
“It’s about allowing consumers to purchase wherever they are while communicating in a way that is in tune with why they use a given channel and showing awareness of their individual stage in the customer lifecycle.”
In essence, omni-channel removes the boundaries between different sales and marketing channels to create a unified, integrated whole. The distinctions between channels — onsite, social, mobile, email, physical, and now instant messaging — disappear as a single view of the customer as well as a single experience of commerce emerge.
As opposed to multi-channel’s wheel, think of omni-channel as an immersion, like diving into an all-inclusive sales-and-marketing pool or pulled into the center of a brand’s gravity.
In omni-channel, the customer — and not the product or brand — lies at the core:
In place of a multi-spoked approach, omni-channel merges the worlds of websites, emails, retargeted ads, social media marketing, and physical locations to show individual customers personalized offers, products, and messages that align and respond every step of the way.
All that can sound a bit esoteric, so …
How does an “omni-channel” approach work?
To illustrate, let’s go back to Leesa. We’ve already seen how Leesa uses retargeting ads on Facebook. That’s perhaps the easiest form of omni-channel to wrap our heads around: what the customer does onsite directly affects their experience with the brand offsite.
Now imagine this …
1. A customer goes through the onsite process outlined above, adds a queen mattress to their cart, and leaves.
2. Again, the first email they receive contains the “$100 off” incentive. But they ignore it.
3. Simultaneously, they’re served a series of ads for the same queen mattress and “$100 off” coupon on Facebook, Pinterest, Instagram, and YouTube … all staggered over a week’s period to ensure they don’t become bothersome.
4. After a week of non-engagement, Leesa automatically switches their approach and begins featuring ads highlighting their socially conscious side with CTAs to check out the Giving Back page:
5. The preroll YouTube ad for Phoenix, Arizona’s Dream Center does the trick.
6. The customer returns to Leesa, watches another video, and then visits the king mattress page instead of the queen.
7. In response, a new round of social ads appear as does an email with two alterations: first, they all feature a king mattress and, second, the incentive is raised to “$150 off.”
8. This time, the offer entices them. The customer clicks through Facebook, fills out their shipping information, but at the last confirmation screen decides that a mattress needs to be experienced before purchased … so they leave.
9. The good news is Leesa has anticipated this objection and detects that the customer’s address is just miles away from their New York showroom.
10. Two days later, the customer gets a personalized invitation in their physical mailbox to check out the king mattress for themselves at The Leesa Dream Gallery.
11. Finally, that’s the offer they accept. The customer stops by, purchases the mattress, and uses Leesa’s Shopify-powered POS system at checkout which automatically updates their account.
12. When the customer arrives home, there’s a “Thank You” email waiting for them and a week later another email arrives to review the mattress.
13. Unfortunately, they ignore both. So as a follow-up — because Leesa knows how valuable reviews are — two days later, the customer gets a Facebook Messenger invitation to submit their review.
14. This time … they respond and give Leesa 5 out of 5 stars, interacting exclusively through Facebook Messenger.
15. Given that they’re so happy with their new mattress — and the customer’s last two points of contact — the following week Leesa sends both a physical mailer as well as a Messenger message outlining their “Refer a Friend” program.
16. In the meantime, all of the Facebook, Pinterest, Instagram, and YouTube ads for a mattress have stopped. In their place — staged over time — ads appear for The Leesa Blanket.
17. To Leesa’s surprise, the customer purchases not one, but three blankets. This automatically triggers a new series of mattress ads on social and via email.
18. In response, the customer clicks through one of the emails but — rather than make a purchase — they spend some time on Leesa’s financing page.
19. Most likely, this means they’re contemplating additional mattresses but are worried about dropping all that cash at once.
20. And so, the very next email they receive and Facebook ad they see speaks directly to that need.
Additional points of contact and channels could be elaborated. The big idea is that in omni-channel, every customer interaction changes their overall experience of your product and brand.
The customer lies at the center and your approach to them is aligned to their actions, both online and in real life.
Are you selling everywhere your customers buy?
For an executive look at the present and future of commerce, download The Enterprise Guide to Multi-Channel Ecommerce.
Choosing Between Omni-Channel or Multi-Channel
On paper, it might sound like the omni-channel is the right choice. After all, it creates a much smoother shopping experience, which is what really matters in the long-run.
However, the answer is more complicated than that.
Making your retail business omni-channel will take a lot of resources. Worse yet, there’s no stopping halfway. Non-functioning omni-channel technology will create the same experience as absolutely no omni-channel technology (unless you can figure out how to build it in a modular way).
So while omni-channel would be the textbook answer, some businesses might be better served starting off with a multi-channel experience before tying them all together into an omni-channel one.
Two questions should be at the forefront of your thought process …
Making your store an omni-channel experience means investing in your organization’s technology capabilities. Even if you have an in-house IT team, you might not yet have this technical infrastructure, skillset, or vision in order to kick off an omni-channel transition and see it through to completion.
For example, a product information management (PIM) system is the backbone of any robust multi-channel or omni-channel store — does your business have one of these yet?
If not (or if this is the first time you’ve heard of a PIM), you might need to hire ecommerce technology experts. You can gradually build your technology competency in-house, but expert guidance can help set up a strong foundation for future expansion (and might be able to help you recruit and hire).
In case you do hire experts, heed former ecommerce consultant Bill Davis’s advice:
“Do far more due diligence than is usually done today. Contracts need to be structured to hold vendors more accountable. Clear and measurable objectives need to be set at the start of the project, and results should be measured against those.”
In addition to outsourcing, you’ll likely invest more in your own team. RSR writes in their report that 73% of stores exceeding the industry growth rate of 4.5 percent (which they call “Retail Winners”) have actually invested more in their team in their past three years.
Their payroll costs as a percentage of sales have increased — more of every dollar they earn gets invested in their team.
Moreover, you still have to have the cash flow to keep your core business and operations moving forward. As Davis explains,
“Even the most well-run retailers, this is a 4+ year journey to really establish oneself as an omni-channel retailer. Having had some visibility into where retailers are, and the maturity of current solutions, I would say the majority of retailers are looking at more like 7+ years before they can refer to themselves as well down the omni-channel path.”
It’ll take commitment, bold decisions, and resources to sustain the transition.
While omni-channel requires a lot of technical expertise, it’s important not to overemphasize the role of technology.
A large part of making the transition is about people and incentives.
“Incentives ostensibly designed to encourage performance unintentionally reinforce the channels’ isolation — such as revenue-generation targets that push each channel to increase its own sales volume regardless of any impact on sister channels.
“Competition becomes even more brutal internally than with the outside world.”
Be wary of the incentives you set for your team and make sure they work out in the long run. Do not let your ecommerce empire fall from inside.
The potentially steep learning curve and ensuing uncertainty of omni-channel require that your teamwork in spite of uncertainty. They must be confident in technology and human innovation.
Is your team prepared? Or will they inhibit the organization from moving forward and slow things down?
Your leadership team also needs to take the reins. CMOs and CIOs, in particular, must develop a shared vision.
Organizations like Amazon have enough technical sophistication in their higher ranks to keep from having to make this transition — they started with technology from day one. Again, Davis:
“[Amazon uses] technology to create advantages, and they are willing to accept mistakes rather than shy away from taking risks, knowing that the lessons learned will make them stronger.
“A retail executive who has a deep technical background is more the exception than the rule and management tends to stick to what it knows.”
Where It All Starts …
In everything, the crucial element to grasp is the difference between omni-channel vs multi-channel because choosing the right approach starts with clear-headed understanding:
To be sure, omni-channel and multi-channel are buzzwords … but that doesn’t mean they can’t be unpacked to yield insight.
Have more questions? We’d love to hear them in the comments.