Multichannel strategy and omni-channel strategy
BLOG – November 2016
When brick and mortar companies first started with selling products and services online, the online store was its own sales channel. A company had multiple channels to sell their products, a channel on the web, a channel on your phone, and off course a channel in the street. This was also known as a multichannel strategy where every channel had their own demand forecast, promotions, customers and price adjustments.
If you look at the current retail landscape, most retailers no longer have a multichannel strategy. An Oracle survey report showed that only 5% of retailers are not having or working toward an omni-channel strategy. But what is an omni-channel strategy and how does it differ from the multichannel strategy?
An omni-channel strategy entails that no matter what channel you use, you will get the same experience. This means that where a multichannel strategy had their own demand forecast, promotions, customers and price adjustments, these are all consolidated in an omni-channel strategy.
The difference is best explained with an example. Joe goes online to buy a book at an online webshop. He looks for a great book and adds it into his cart. Joe buys the book and it arrives at home. When Joe goes into town he sees the brick and mortar bookshop where he bought his book online and goes in. Joe wants another book of the same author but he doesn’t remember the name. So he goes to the desk and asks the employee if they can tell him what the name is of the author. With a multichannel strategy the employee of the brick and mortar store would not know which book Joe bought since this is in a different channel. With an omni-channel strategy the employee would be able to look into Joe’s order history and tell him the name of the author, creating the ability for a cross-channel sale.
Consumers now a days expect the same experience on every channel. When they add a product to their cart on their laptop they should be able to finish their sale on their mobile while commuting to work. Channels no longer work side by side but all the information is available on all channels, ideally in real time.
The real question that comes from looking at multichannel and omni-channel strategy is the following:
If consumers expect an omni-channel strategy, why wouldn’t businesses?