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Omnichannel vs Multichannel: What Sellers Should Know

Pandemic or no pandemic, the e-commerce industry’s growth spurt is well underway. 

In the US alone, e-commerce sales in Q3 2021 rose by 6.8% compared to the third quarter in 2020. 📈

But in order to keep up with these solid growth rates, modern sellers will need to take big, bold action in the ways that they run their stores. 

That’s where multichannel and omnichannel e-commerce swoop in. With the right setup, skills, and plan, these e-commerce growth strategies can take a store from good to great.

In this article, we’ll dive into multichannel and omnichannel e-commerce and the defining characteristics of each. We’ll also show you how to choose the right strategy for your brand so that you can meet your biggest, hairiest e-commerce goals with as little stress as possible.

The scoop on multichannel vs. omnichannel e-commerce

  • Omnichannel vs. multichannel e-commerce: What’s the difference?
  • The pros and cons of multichannel and omnichannel e-commerce
  • Multichannel vs omnichannel: How to know which is right for you

If you’re ready to scale your e-commerce store to the next level, you’ve come to the right place. Explore SellersFunding’s fast, flexible e-commerce funding solutions.

Omnichannel vs. multichannel e-commerce: What’s the difference?

Omnichannel. Multichannel. These buzzwords are thrown around together so often, it’s easy to think they’re synonymous. 

But omnichannel and multichannel e-commerce have some key differences that every online retailer should know. 

Let’s dive into some definitions and traits that separate omnichannel from multichannel online selling.

What is multichannel e-commerce?

Multichannel e-commerce refers to using multiple channels to sell your goods and share information about your brand online. These channels stand alone, meaning they aren’t integrated. 

In a multichannel setup, each sales avenue can have its own look, feel, and agenda. 

For example, under the multichannel approach, your website, Amazon store, Walmart shop, and eBay store could each give off a different brand vibe depending on the goal of that channel.

With multichannel e-commerce, when you increase sales avenues you expand your customer contact points and your sales volume.

What is omnichannel e-commerce?

Just like multichannel selling, omnichannel e-commerce also takes place on more than one channel. 

But there’s one big difference. Omnichannel e-commerce sets itself apart by connecting all channels with a unified message, voice, feel and experience. Whether a customer is shopping on the company website or mobile app, it all feels like the same brand journey. 

Omnichannel aims to adopt a fully customer-centric approach, providing a seamless shopping experience optimized to the consumer’s taste, no matter where they begin or end their shopping journey.

The store’s content is also optimized to help equip the consumer to make informed decisions about the brand and its products. Another way to think about it is, with omnichannel, your brand is Yoda and the shopper is Luke.

Your job is to guide them through every step of the way, until they’re ready to make their big move.

The pros and cons of multichannel and omnichannel e-commerce

Multichannel and omnichannel both come with their wins and misses. It’s important to get clued in on what each avenue can offer before you get started. 

Let’s zoom in on some benefits and drawbacks of both multichannel and omnichannel e-commerce.

The pros of multichannel e-commerce

  • Fast way to attract new customers: If you’re looking for a quick and cost-effective way to gain more customers and sales, multichannel e-commerce can be a good option. On some platforms, you can get set up in a matter of hours, quickly increasing your scalability. Plus, you’ll gain useful data on your audience to further optimize your strategies across channels.
  • Expand your brand reach: Everyone has their shopping channel favorite, making multichannel e-commerce a great way to expand your store’s reach. Placing your products on different channels simultaneously will expose you to people who may not have otherwise known about your brand, but are now lifelong fans.
  • Get ahead of your competition: When you have your products on different channels you’re not only more discoverable, but this extra attention can also be just what you need to get on your competitors’ customers’ radar and potentially entice them into your store.

The cons of multichannel e-commerce

  • Learning all the different rules can get tricky: Since no sales channel is the same, you’ll have your work cut out learning all the different rules, tricks, and quirks to make your store successful. The steep learning curve also increases the odds of potentially making costly mistakes. 💸
  • Your workload and expenses may increase: Each time you add a sales channel, you’re committing to additional duties and costs — whether it’s the monthly subscription charge or updating listings. These additional responsibilities may be manageable in the beginning, but as your store grows and sales channels increase they can start to pile on fast.
  • Managing inventory can be a challenge: Since your sales channels aren’t connected, you’ll need to invest time and money into tools that keep a close eye on your inventory levels and fulfillment. Without these systems in place, you could find customer orders and requests falling through the cracks.

The pros of omnichannel e-commerce

  • Get in shoppers’ good books: Omnichannel shopping is no longer a nice-to-have, it’s now expected from customers. By giving shoppers what they want (i.e., flexibility and choice), you’ll improve their experience and set yourself up to win their loyalty long-term.
  • Boost your revenue and profits: When customers feel valued, they spend more and are also more likely to make repeat orders. In fact, customers that use four or more channels are known to spend 9% more in the store. 
  • Build stronger relationships through personalization: Since you unify all your sales channels through an omnichannel approach, you get the opportunity to forge deeper connections with your customers via increased personalization. As you gain shoppers’ trust you can become their go-to resource and advisor, helping to guide their future purchase decisions.

The cons of omnichannel e-commerce

  • Setting up can be costly: Omnichannel e-commerce isn’t just a case of setting up accounts and ploughing ahead. It’ll take investments in market research, high-tech solutions, tailored messaging and expert consultancy to give your brand the best chance at success. These costs can initially cut into your margins and bring down profitability if sales volumes aren’t high enough.
  • Your message needs to be top-notch, always: Since omnichannel e-commerce relies on open communication across channels you can’t afford any hiccups in your systems, such as data not being shared between channels. This can create an additional burden because, as with most tech, issues often crop up and can interrupt the experience.
  • Security concerns are no joke: You’ll be sharing data across channels to provide a unified shopping experience. With these perks comes the added responsibility of keeping your business security super tight. Data breaches not only break trust but can be devastating if costly lawsuits arise.

Multichannel vs omnichannel: How to know which is right for you

Now that you’ve got the full scoop on multichannel and omnichannel e-commerce, you may be wondering which one to pick. 

Unfortunately, there’s no one answer. What’s right for your business isn’t set in stone. It depends on specific factors like your experience level, available capital, and commitments — all of which can change and evolve over time. 

To help guide your decision, here are some steps you can take:

First, get clear on your goals

To get started in the right direction, it’s critical to figure out exactly what you want to achieve with your store in the next few years. 

For example, if improving your profits and widening your customer base is a priority, multichannel could be just the ticket. But if deepening customer relationships and loyalty is high on your agenda, omnichannel could be what you need.

Really get to know your customers

When all is said and done, customers run the show. 

Make your decisions based not only on what will bring in more cash for your business, but what will make your customers happiest.

And when in doubt, conduct a little market research to understand things like:

  • How your customers shop
  • When and where shoppers encounter your brand
  • How much buyers spend on each channel

Work out how much time you can invest

No qualms about it, going either omnichannel or multichannel is a huge time commitment.

It’s important to assess how many hours you and your team can realistically commit to managing your store long-term. Don’t forget to consider how you will cope in peak seasons and on big events. 

This information will not only tell you whether taking on more channels is or isn’t a good idea, but will also help you understand how many channels you can realistically operate at one time.

Study your budget 📝

Whether you go omnichannel or multichannel, you’re going to need cash to get set up and pay for ongoing expenses like subscriptions, marketing, and administration. 

These expenses can add up fast, so before you commit, take a long hard look at your finances and ask, “Can we afford the e-commerce strategy we’ve chosen long term?” 

If the answer is yes. you’re good to go.

You may also want to look into the option of securing e-commerce funding, such as flexible working capital, to act as a cushion for the bills that arise at the outset of your new strategy.

The “right” way to select an e-commerce growth strategy

Growing an e-commerce store beyond its original channel is an exciting challenge filled with countless opportunities. 

But to make sure your store can profit from your expansion, it’s vital you take time to understand the responsibilities and commitments you’ll be taking on when you go multichannel or omnichannel. 

Don’t be afraid to start small, test the waters, and adjust to find the right sales channels and marketing strategy for you. With a little luck and a solid plan, you’ll be well on your way to hitting the level that’s right for you.

Thinking about a new growth strategy for your brand? Get your funding lined up and ready to go.


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Contact a SellersFi expert to see your growth options and get started!

By clicking on the button above, you agree to receive SellersFi marketing communications.

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