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Omnichannel vs multichannel: the key differences.

July 28, 2021 Simone Fiorucci

The modern business landscape has changed exponentially over the past few years. What used to be viewed as a more cut and dry approach to ecommerce sales enablement is now a series of complex commerce layers primarily influenced by the needs of modern-day consumers.

For today's businesses, merely maintaining an in-store or online presence covers only one of the many channels where customers engage with their brands of choice. Modern commerce now takes place in multiple settings, in both digital and physical formats, many of which overlap together to create one all-encompassing brand experience.

Regardless of the channel they’re shopping through, customers care about getting what they need, when they need it, effortlessly. They expect to consume products and services in the ways they find convenient, whether that’s via a website, a mobile app, a connected home device, a virtual assistant, a voice interface, or any of the countless other new devices and disruptors working through the market.

When developing strategies that address modern-day consumers' needs, businesses will often use terms like omnichannel and multichannel interchangeably. The intent of this is to describe the need for channel diversity in the purchasing process. However, omnichannel and multichannel strategies are actually two very different approaches to retail engagement. We'll explain the key differences of each below.

Understanding the difference between omnichannel and multichannel

When developing retail sales and marketing strategies, many businesses want to know if an omnichannel or multichannel approach is really all that different? The answer is YES. While both methods at their core involve selling products or services through multiple channels, their primary focus and how they are designed to integrate into business infrastructures vary considerably.

What is multichannel?

As the name denotes, the methodology behind a multichannel solution is to support multiple purchasing channels. This approach's primary focus is a product or service, making it available on as many platforms, digital marketplaces, kiosks, or social media platforms as possible.

An important distinction of this form of sales strategy is that each channel is viewed as an independent source. All channels in a multichannel solution operate within a silo and do not directly integrate or communicate with other purchasing channels.

What is omnichannel?

Like multichannel, omnichannel also involves creating multiple touchpoints for a customer to engage with and purchase from a brand. However, while the primary focus of multichannel solutions is centered around a product or service, omnichannel solutions put the focus on the customer. This is done by creating a direct communication and unification of separate sales and marketing channels, allowing for a single view of the customer and a seamless purchasing experience.

Omnichannel solutions merge all channels into one customer journey, eliminating purchasing silos and delivering cohesive brand engagement at all purchase stages. Omnichannel is often referred to as cross-channel, as it denotes multiple channels working together towards a common goal.

While the primary focus of multichannel solutions is centered around a product or service, omnichannel solutions put the focus on the customer.

Practical examples of omnichannel and multichannel solutions

How multichannel solutions work

A multichannel solution is typically the first step for most businesses looking to grow their customer base. For example, let's consider a small brick-and-mortar business looking for new ways to reach a broader market.

While in-store sales are strong, customers have requested to purchase products online and have them shipped to their homes. Responding to this need, the company launches an ecommerce platform that allows customers to buy goods from the company's distribution warehouse located in another city. Simultaneously, the company has created marketplace accounts on Amazon, eBay, and Walmart to help provide further brand exposure by selling their goods through third-party listings.

In each of these cases, both in-store and online, the business manages independent customer portals and system processes to keep these channels functioning and profitable.

How omnichannel solutions work

Looking at the same business example used in a multichannel solution, let's see how an omnichannel approach can improve the situation.

The company's multichannel strategy has proven quite successful up to this point. The business benefits from multiple revenue sources and has acquired a more extensive customer base than previously. However, over time, the company recognizes that shopping cart abandonment has increased exponentially online, and specific channels are performing much less than others. Customers shopping at the brick-and-mortar store have also begun expressing frustration that products being advertised online aren't actually being sold in-store. The business decides it's time to adopt an omnichannel approach for their customers.

Step one is addressing online vs in-store stock availability. Using an API tool, the organization syndicates real-time stock levels at the store level to their ecommerce platform. This allows customers to now purchase products online and pick them up at the store while also giving them visibility to the exact stock levels available in-store before they even leave the house.

At the same time, the company's marketing team realizes that by tracking customers' preferences and advertising engagement off-site through the brand's social media channels, they can serve them more applicable sales content once they arrive at the ecommerce store.

To further simplify the purchasing process for international customers while unifying business processes across different marketplaces, the business has invested in an omnichannel payment solution. Now, regardless of where customers are located, when they're shopping on-site, they see currency-specific pricing, real-time inventory, and delivery options applicable to their purchase location.

These are just some of the near-limitless ways that omnichannel solutions connect the dots between sales and marketing channels. Omnichannel strategies are designed to create continuous customer engagement and brand consistency regardless of where your customers are researching or sourcing your products or services.

Commerce Layer’s API-first nature as the key to true omnichannel

The reality is that both omnichannel and multichannel approaches can be useful when growing a business and creating more opportunities for customers to engage with a brand. However, if the last few years have taught companies anything, it's that customers have increased expectations of organizations they choose to engage with. This includes having higher standards when it comes to the convenience and simplicity of purchasing goods and services online and in-store.

In this perspective, a simple multichannel solution is no longer enough. Even treating omnichannel like a sort of “multichannel 2.0” is a workaround that’s not going to be of any help in the long term. In order not to build snowflake solutions for every channel and touchpoint, brands need decoupled architectures that can cater to each channel’s unique frontend technology while providing essentially the same functionality behind the scenes. It’s time to unleash the true potential of omnichannel,

Omnichannel solutions let you meet customers’ expectations by creating a more personal brand approach impacting all aspects of a customer's purchasing journey. More so, these types of strategies are now becoming the gold standard when it comes to modern-day commerce. If you want to stay innovative as an ecommerce business, you need to be wherever your customers need you, whenever they need you, the way they need you.

Omnichannel solutions let you meet customers’ expectations by creating a more personal brand approach impacting all aspects of a customer's purchasing journey.

However, designing a fully-functional omnichannel ecosystem can require significant resources, especially when created from the ground up. A fundamental component of successful omnichannel strategies is API-driven development along with powerful tools and integrations that can make seamless customer engagement challenging to achieve for many.

Here’s where Commerce Layer comes into play by giving businesses the freedom and flexibility of a headless commerce platform designed to support and simplify omnichannel business models. As a multi-market platform, Commerce Layer provides powerful inventory, pricing, and payment APIs to simplify the purchasing process while allowing businesses to easily integrate their websites, apps, and devices from a single back-end. That’s because Commerce Layer is API-first by design, and being API-first is the only way to be truly omnichannel-ready.

Commerce Layer’s API-first, developer-centric perspective makes your business ready to keep up with modern omnichannel ecosystems and prepared for whatever comes next.

Whether you want to move from multichannel to omnichannel or build your omnichannel solution from scratch, Commerce Layer can help you make your core services available anywhere — quickly, consistently, securely, and at scale. This empowers your developers and partners to build frictionless experiences that evolve with your customers' preferences and let them move seamlessly between digital and physical interactions, at the pace that they expect.

This approach allows you to deliver applications that not only operate in any channel but can scale as more channels are added without having to create new solutions for each of those. Commerce Layer’s API-first, developer-centric perspective makes your business ready to keep up with modern omnichannel ecosystems and prepared for the future. Because there’s one thing we know for sure — new channels will continue to pop up.