Across both business to business (B2B) and business to consumer (B2C) online sites, social media, and marketplaces, all of us are glued to our various devices more than ever before. The COVID-19 pandemic only served to increase our reliance on digital channels for practicality reasons, a trend that’s set to continue as the world becomes more digitised.
It's therefore imperative that businesses provide a satisfying experience to customers across multiple online and offline channels.
But to that end, what’s the key difference between multichannel vs omnichannel marketing and what do those differences mean for your business?
Omnichannel and multichannel business and marketing strategies have some crossover and similarities. Both are about communicating and selling to customers through multiple channels using multiple devices and preferences but there are distinct differences.
Ultimately, omnichannel is the prefered modern approach because it integrates the experience for the buyer across all research and purchase channels. Alternatively, multichannel marketing keeps each channel largely separate.
So let’s clarify exact definitions and differences between multichannel vs omnichannel, look at where the market is moving, and then explore a range of costs and benefits associated with both so you can understand how either approach may affect your business.
Definitions: Multichannel vs Omnichannel
What Does Multichannel Mean?
Multichannel marketing refers to the multiple channels that a business uses to interact and engage with customers and ultimately sell them goods and services. A multichannel approach could refer to in-store, online, mobile, catalogues, direct mail, social media, text messages, and other digital channels.
The key takeaway is that with multichannel sales and marketing strategies - each channel is often not going to be integrated and they are effectively separate and isolated avenues of customer engagement.
What Does Omnichannel Mean?
On the other hand, omnichannel marketing and business strategies can also include all aforementioned customer engagement and sales channels but they’re unified together via digital integration.
Omnichannel therefore integrates these multiple channels of customer communication together. This ultimately produces a more consistent, relevant, and satisfying customer experience, making omnichannel marketing the superior ecommerce business strategy. You can see this playing out as a preferred strategy across various industries, including the insurance sector.
So think of omnichannel as a way to unite engagement for all channels under one centralised strategy. It’s about creating and delivering a seamless experience across all stages of the customer journey on any channel where they happen to be browsing or buying.
Trends and Statistics for Multichannel and Omnichannel
- Giving customers all options - Today’s customers want the freedom to research and buy on their terms. According to a Forrester study, 59% of consumers are likely to look at a product online and buy in-store, while 54% are likely to look at a product in-store and buy online. Providing both options is vital.
- Achieving cross-channel attribution - This trend allows businesses to collect data across all channels in real time, deploy analytics to understand customer behaviour, and then direct the business to the most profitable channels, products, and customer experiences to boost revenue and profit.
- Personalising the omnichannel experience - Up to 80% of customers are more likely to purchase when a brand offers a more personalised experience. This is only achievable through omnichannel integration, which involves collating data from multiple customer interactions to arrive at each person’s preferences.
- Adopting social selling - More than 60% of brands are already using some kind of social ecommerce functionality, something an omnichannel strategy ensures. This can range from social selling and event marketing through B2B channels like LinkedIn, to seamless in-app purchasing experiences through channels like Instagram.
Compelling Statistics to Build Your Case for Omnichannel Sales and Marketing
- Companies with strong omnichannel customer engagement retain 89% of their customers on average, compared to 33% for companies with weak omnichannel customer engagement.
- Marketers using three or more channels in any one campaign earned a 287% higher purchase rate than those using a single-channel campaign.
- Purchase frequency is 250% higher on omnichannel vs. single-channel, and the average order value is 13% more per order on omnichannel vs. single channel.
- 90% of customers expect consistent interactions across all channels.
- Companies with strong omnichannel engagement saw a 9.5% year-over-year increase in annual revenue, compared to a 3.4% increase for weak omnichannel companies. Similarly, strong omnichannel companies see a 7.5% year-over-year decrease in cost per contact, compared to a 0.2% year-over-year decrease for weak companies.
What are the Key Differences Between Omnichannel and Multichannel?
It can be useful to further understand the key differences between omnichannel and multichannel by digging a little deeper into the following three areas.
1. Customer Engagement vs Customer Experience
It’s important to note that omnichannel unifies every channel of engagement whereas multichannel focuses on each channel individually. Because of this, there is a resulting impact on the customer experience - omnichannel aims to achieve overall consistency in customer experience regardless of channel, but multichannel is concerned with customer engagement on each individual channel.
Ultimately, this is about consistency. Omnichannel is the means to deliver that consistency to customers regardless of which platform, device, or channel they are using to engage with your business.
2. Channel-Centric vs Customer-Centric
The multichannel approach is focused more on individual channels, whereas the omnichannel strategy puts the customer at the centre as an overriding focus.
Multichannel marketing aims to maximise the channels, and therefore engagement opportunities, for a business to increase interactions and sales. However, since omnichannel connects different channels together, allowing the customer to enjoy a more seamless experience regardless of which channel they are using, this is a more customer-centric strategy in comparison to multichannel.
3. Quantity vs Quality
Given multichannel is focused on individual channels, it follows that a multichannel strategy aims to build and foster as many channels as possible. The logic is more channels, more opportunities for customer engagement and sales. But there are of course drawbacks if these channels are not connected for sharing and reacting to relevant customer data and other analytics. It’s much like that classic complaint from customers who are trying to resolve an issue on the phone, online through their mobile device, and in-store. In each case, the sales or service agent at the end of each interaction is unaware of the historical context for the issue at hand.
However, while it also aims to maximise business levels, an omnichannel strategy is less focused on quantity of channels and more concerned with the quality of support and the experience the customer is receiving. This will especially be relevant when a customer is moving between different channels. Rather than having to begin the interaction again - service or sales - each time they move, an omnichannel approach will facilitate the movement by retaining the customer’s ongoing interaction data.
Barriers to Creating Omnichannel Experiences
Given that businesses recognise the advantages of an omnichannel experience for customers, why isn’t everyone deploying it successfully?
One of the major impediments or barriers in the way of omnichannel implementation is cost and complexity, although it must be said that not every business will face the same degree of each. Consider a business that is currently using legacy, highly customised in-store or showroom point of sale systems. Couple that with bespoke ERP, CRM, inventory, and customer management systems which integrate with other internal business systems. An organisation like this is likely to be facing significant investments in new technologies to integrate everything together for a true omnichannel retail or B2B strategy. This is possible but will require vision and commitment to drive this change across the organisation.
To that end, another major barrier to making omnichannel a success is culture. Just like any core digital transformation project, an omnichannel strategy must be driven from the most senior parts of the business across the whole organisation and communicated well, with enough incentives behind the project for the whole team to get on board.
Business Benefits of an Omnichannel Strategy
We’ve explained why an omnichannel approach is superior to multichannel for improving relevance and the customer experience. But what are the defined business benefits that can result as a result of pursuing this strategy?
- Improved customer lifetime value - Customers that engage with digital experiences that put them first are more likely to remain loyal because they feel valued. For businesses, it’s not just about the sale today, it’s about repeat business (and referrals) over time.
- Better business efficiencies - When organisations use an omnichannel strategy, they only need to collect customer data once, then share it across other channels. This eliminates the need to repeat the process again and again, lowering costs while boosting operational efficiencies.
- Increased sales - As mentioned earlier in this article, customers that enjoy a better buying and service experience are more likely to spend more money and share their positive experiences. Both of these activities help to increase sales.
- Smarter inventory practices - While there is some considerable technology strategy and implementation work required, a good omnichannel strategy and platform can positively impact an organisation's stock management outcomes. With a better, more unified view of inventory, a business can optimise stock levels and roll out improved replenishment strategies.
Ready to Learn More?
Whether you have yet to develop an omnichannel strategy or are in the midst of executing one and looking for improvements, this blog post will help. It covers headless APIs and their usefulness in helping you roll out content and a consistent CX across multiple channels for a true modern omnichannel experience.