Multi-Channel vs Omni-Channel eCommerce

e-Commerce

The difference between a multi-channel and omni-channel ecommerce strategy is the approach you take towards driving sales through your digital channels and the approach you have towards your customer’s shopping experience through UX (user experience). So before reading any further consider what your focus is across all your channels. Is it a sales objective? Or is it brand perception?

The Longstanding Multi-Channel Approach

The activity of selling across different channels with the focus on maximising the performance of each one is considered as a multi-channel sales strategy. As a quick and easy activity to implement and one that is relatively affordable, multi-channel sales is still being adopted by many retailers as their go-to ecommerce strategy. Its primary purpose is to create fast paced product placement and promotions across various platforms as a means of driving sales and meeting targets.

Multi-channel selling was traditionally perceived as a single online and offline presence, but over time evolved to include marketplace channels such as amazon, ebay and Rakuten. More recently it has included the new selling feature of social media such as Facebook and Pinterest's 'Shop Now'. Compared to what we used to know as the typical product only platforms, what we are now seeing are a growing number of platforms consumers use aside from shopping, being adapted to include ecommerce as part of its ecosystem. These days, the multi-channel sales strategy has fast become the bare minimum an organisation should look to achieve when devising an ecommerce strategy.

Pros & Cons of Multi-Channel Sales

Up until 2014 the integration and handling of a single product entry, central inventory and consecutive order management across all channels but via a single CMS/sales platform was an expensive and time consuming exercise to conceive yet alone implement. Nowadays, with the range of ecommerce platforms available and the competitive stance they all take to develop apps, extension and API’s, it has become a lot easier and more affordable to roll out a centrally managed multi-channel function as part of your organisation's online sales capability.

When trying to picture how a multi-channel structure works, it is best to imagine it like a running track or Olympic swimming pool, whereby each lane represents a sales channel or platform being used. Each channel looks towards the finish line as their sole objective and focuses on the distance they have go as revenue goals. Like different sales departments within a company, each channel does not look to work with the other channels running alongside it. It is an internal competition to see who achieve the most sales in the shortest amount of time and with the least amount spent from the marketing budget.

If you are an ecommerce business that sells very fast moving products or products that have a popular or “craze” reputation, a multi-channel sales strategy can be very successful. However, without careful consideration of the products you are selling and the audience of each platform you are selling from, a multi-channel strategy can easily end up being overwhelmed with poor choices. With a mismatch of relevance between the product and platforms, the end result is that certain channels end up not performing to your expectations.

Considering the growing need to personalise the shopping experience of our customers as a commercial differential for 2017, the ability to do so using a multi-channel strategy can be difficult. With a trending growth in online and mobile sales, bricks and mortar stores are in decline. Given how multi-channel sales work, such a strategy for a business with both an online and physical store can end up causing friction internally. With both channels working against each another for the purpose of achieving sales, the subsequent result is a misalignment of purpose within the business. As we have seen in the real world and in the news, such a strategy effectively ensures the closure of your physical shop due to its continuing weakened position in the long term.

Considerations You Should Take for Multi-Channel eCommerce

  1. Manage your products and channels in one place
  2. Diversify your product range across your channels
  3. Consider the product bias of each channel
  4. Focus on the type of audience each channel attracts
  5. Consider the risk vs rewards for each channel – address any friction
  6. Paid platforms will offer an audience in a shorter space of time
  7. Ecommerce is a zero sum game - Expand your distribution network

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Introducing the Omni-Channel Approach

Blink and you will miss it. As a fairly new ideology, the essentials of omni-channel have evolved from the multi-channel sales approach but with a change in focus. Rather than looking towards a sales target, the omni-channel strategy focuses on providing customers with a seamless and integrated shopping experience across all channels and devices. Omni-channel takes into account a customer’s ability to not only flick between sales channels simultaneously but also use online and offline channels that are intended for different purposes. For example, a customer using their mobile to check out a review on social media or a forum for a product they are considering purchasing either online or in a physical store.

Companies that adopt omni-channel are ones that have decided to put the customer at the centre of its strategy and not the sales objectives of each channel. However, as we will soon see with Amazon hitting our shores, the Omni-channel approach will be vital for the Australian retailer’s survival.

Pros & Cons of Omni-Channel Sales

Omni-channel has an ‘outside looking in' approach and recognises that customers engage with products and brands differently across multi-channels/platforms. Regardless of which channel the customer is using at the time, the purpose of omni-channel is to create a singular interpersonal relationship with the customer based on how they perceive your brand or product. With omni-channel you are looking through the eyes of the customer to ensure that the channels work together and thereby setting out your objectives through understanding the customer's expectations. Unlike a multi-channel strategy which stops-starts the customer’s journey, an omni-channel strategy allows the customer journey to flow between multiple channels, thereby ensuring the customer receives a more personalised experience.

For omni-channel to work the infrastructure has to focus largely on the backend systems of the company and the website. For instance, the sales assistant must be able to identify a shopper who has previously purchased online in order to tailor the customer’s shopping experience in-store. Vice versa, when a customer goes on web chat the customer agent must be able to identify purchases that that customer has previously made in-store.

The potential of omni-channel is huge and the strategy goes a long way in supporting the longevity of a bricks and mortar store in co-operation with its ecommerce presence. The processes involved in getting a business to that point does however have the potential for the back end implementation to be costly. But, as we continually see with ecommerce and just as we have done with multi-channel, rolling out the necessary technology or adapting your current ecommerce platform to cater for that type of functionality is slowly being developed. Certain features of existing platforms already allow for a small level of omni-channel implementation, such as creating and assigning customers to groups based on the buying trends, behaviour or market segments you have identified. Creating online promotions that can be handed out in-store to existing customers or following up an offline transaction with an online promotion for the same product or similar, is something that can already be easily rolled out with most off the shelf ecommerce systems.

7 Considerations You Should Take for Omni-Channel eCommerce

  1. Future proof your online infrastructure for omni-channel
  2. Consider what features can you use already with your platform
  3. Ensure you have the ability to target your segmented customer data
  4. Don’t just push promotions towards a general audience
  5. Find ways you can combine the online experience with in-store and vice versa
  6. Look at ways you can personalise your channels for a singular experience
  7. Place emphasis on your brand and customer experience over the bottom line
Category: e-Commerce

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