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Multichannel vs. omnichannel fulfillment: What’s the difference for your business?

visual representations of multichannel and omnichannel fulfillment

Long gone are the days where consumers were confined to brick and mortar stores or catalogs, or even to a desktop online store. 

Consumers now have a plethora of options to meet their latest shopping needs, from mobile ecommerce to social media – and everything in between. 

But they don’t simply want multiple selling channels; they want to ability to switch seamlessly between them. 

Let’s take a look at a few stats:

This is where omnichannel strategies come into play to facilitate increasingly nimble shopping experiences – but this also has a massive impact on the order fulfillment process.

We’re taking a deep dive into the differences between multichannel and omnichannel selling and order fulfillment, and what you should consider when deciding on your business’s strategy. 

What is the difference between multichannel and omnichannel?

Because the terms ‘multichannel’ and ‘omnichannel’ often get used interchangeably, it’s easy to assume that they’re one and the same. There are overlaps, such as coordinating selling activities across a range of physical and digital channels. However, there are distinct differences in how they conceptualize the customer experience.

Multichannel and omnichannel compared

Puts the product at the center of the experiencePuts the customer at the center of the experience
Each channel has its own inventoryInventory is interchangeable between channels
The customer journey is isolated to one channelThe customer journey spans several channels
Uses separate sales/marketing strategies for different channelsUses an integrated sales/marketing approach

Let’s compare two different scenarios to illustrate how the customer journey differs between these two approaches: 

Scenario A: The customer sees an item they like on an online store and purchases it for home delivery. When the item arrives, they find that it doesn’t meet their needs and go to the nearest physical store to initiate a return. Upon arriving, the sales associate informs the customer that they cannot process the return because it was an online order, forcing them to ship the item back to the warehouse independently and delay receiving a refund.

Scenario B: The customer is browsing their Instagram feed and sees ad for a product they’re interested in. They click ‘view on website’ and are directed to the product page, where they check the item’s stock levels at the nearest physical store. Upon arriving at the store, the customer shows a sales associate the product they’re interested in on their smartphone.

In scenario A, the customer is siloed to one channel and is unable to move between them – even when it would make the customer experience much more positive. In Scenario B the journey involved no fewer than four different selling channels, which the customer in question was able to switch between seamlessly.

In sum, having an ecommerce store and a brick and mortar location doesn’t necessarily make you an omnichannel retailer; the definition hinges on whether these channels integrate when required by the customer’s individual needs. 

Multichannel vs. omnichannel order fulfillment

So, we’ve defined what multichannel and omnichannel are in general terms – but what does this mean in terms of order fulfillment?

Multichannel order fulfillment

In a multichannel scenario, order fulfillment is pretty straightforward; each of your channels maintains its own inventory, order processing, and delivery methods, such as independent ecommerce fulfillment or retail fulfillment models.

For example, inventory would be sent from the warehouse to your physical store locations for in-store customers to purchase, who will then return items by the same method if needed. Thus, fulfillment and selling activity remains confined to that one channel with no crossover in operations.

Omnichannel order fulfillment

Unlike multichannel fulfillment, an omnichannel strategy oversees the complete integration of the order fulfillment process to take advantage of all available channels. They act as holistic parts of the same operation, enabling merchants to offer a broader range of fulfillment and delivery options to customers for maximum flexibility and convenience. This includes:

  • Buy in-store, home delivery
  • Store-to-store fulfillment and delivery
  • Click and collect (or buy online, pick up in-store)
  • Buy online, return in-store
  • And any mixture of the above!

So, an omnichannel approach would see a store location play multiple roles within the fulfillment process, such as:

  • A source of inventory for online orders/orders from other store locations
  • An extra location for picking/packing online orders
  • A click and collect point
  • A place to return items

Multichannel vs. omnichannel fulfillment: Which is better for your business?

At first glance, multichannel is much more straightforward for retailers to manage because your channels are effectively siloed off from one another. But this is also where things can get tricky from a customer service standpoint.

While you might classify your ecommerce store and physical locations as separate entities, your customers are likely to view this differently. 

From their perspective, your selling channels all belong to the same brand – and they expect to have the freedom to move seamlessly between them. Preventing them from doing so (as shown in a previous example) adds friction to the customer experience – and may result in that customer choosing to shop elsewhere.

By comparison, omnichannel fulfillment offers consumers much greater flexibility and convenience, resulting in positive customer experiences and enhanced brand loyalty. 

However, omnichannel necessitates a much more tightly integrated fulfillment process – and this requires a lot of support in the form of technology and strong inter-channel communication that can be challenging for businesses to manage independently.

Partnering with an omnichannel fulfillment provider

By partnering with an experienced omnichannel provider like Whiplash, your business can take advantage of powerful software capabilities that enable real-time insights for seamless order and inventory management. Best of all, our powerful integrations make it easy to view information from your selling channels from one convenient interface.

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