Omnichannel vs. Multichannel: What Is the Difference and How It Can Help Your Business?
Marketing has existed in various forms and formats throughout history, ranging from word of mouth promotion and sales letters to catalogues and print advertisements. Businesses and marketers are compelled to explore countless channels and mediums to fully understand (and exploit) consumer behaviour, buying models and trends.
The arrival of the digital age has added another layer into the already dynamic marketing discipline – none more so than multichannel and omnichannel marketing. They are perhaps the most important and complex marketing concepts of the digital era for business owners, marketers and content marketing agencies.
However, understanding these two concepts are actually quite easy once we’ve peeled off the seemingly byzantine layers surrounding omnichannel and multichannel marketing and break them down into bite-size pieces.
1. Omnichannel Definition
Omnichannel connects all your marketing channels to create a unified customer experience across all your brand platforms. This helps to improve customer conversion rate primarily by absorbing spillovers between channels.
2. What is Omnichannel Marketing?
Omnichannel promotes a unified philosophy to marketing, sales and customer service that focuses on the browsing and spending habits of users. This is vital since 54% of omnichannel customers prefer to shop with retailers which provide the convenience of switching between different computers and devices.
Businesses and marketers achieve this by using retargeting and personalisation strategies across all digital marketing channels, such as websites, emails, social media platforms, content marketing, PPC and display ads.
3. How Does Omnichannel Marketing Work?
Omnichannel marketing is customer-centric and bridges the gap between offline assets such as physical stores or print ads and online assets such as websites, videos and social media. Omnichannel allows continuous syncing of data across all marketing channels.
This marketing philosophy provides customers with greater flexibility when shopping or searching for information. A good example of this is the recent revival of physical stores.
There is still a perception that e-commerce is completely outcompeting physical stores. But the fact is that we are seeing a trend where the store’s value is increasing, both in itself and in combination with e-commerce. Advantages such as a personal meeting, an attractive environment and the feeling of being able to touch products have given the physical stores a boost.
Due to increased competition, many companies have taken a step closer to the vision of an omnichannel strategy. Simply put, it can be said that an omnichannel strategy views the channels as a seamless overall experience – there are no boundaries between any of the many channels you use. For example, more and more e-retailers are offering the customer to buy online but to pick up or return the product in store. In 2017, 23% of Sweden’s 15-74-year-olds bought something online that they picked up in stores (DIBS report).
The first step in the process is to establish identification technologies for visitors. This can be comfortably achieved using tracking tags such as cookies, image pixels and web beacons.
- Cookies: Text codes on your website which track customers’ browsing behaviour, including pages visited, time spent on each page, internal links clicked and exit link.
- Pixel Tags and Web Beacons: Tiny, 1×1 transparent images which are automatically downloaded to computers or mobile devices. These virtually invisible images are usually embedded on websites, emails and software. They are used to collect information such as operating system used, time emails are opened, type of email client, screen size and resolution, browsing activities and IP addresses.
Using these tools, you will be able to identify the products or services which your customers view, like, purchase or use. Thereafter, you will be able to personalise and serve relevant and targeted content or ads to them in your marketing emails, on social media or third-party websites.
Theoretically, a customer who visited your website to view the price of a jacket will be retargeted over a specific period of time using all of your marketing channels. For instance, they might receive a discount voucher in an email which was submitted during purchases or promotions. Subsequently, they might see a display ad for the jacket when surfing on Google or Facebook. Thereafter, they might see an ad on YouTube while watching the latest Taylor Swift music video.
While such data are almost always anonymous, there is admittedly a certain element of Big Brother involved here. Some customers are actually freaked out by this level of intrusion. Privacy is also another major concern. However, all major remarketing and targeting technology providers and ad networks provide customers with opt-out options. Many countries and regions also have legislations that regulate the collection of such consumer data.
Aside from the hard-selling aspect, the omnichannel approach also attempts to integrate other information into the sales and marketing ecosystem. Travelling data (usually purchased from Google via Maps), stock level, payment/POS solutions and rewards partners (such as credit card companies and hospitality chains) are just a few other elements which companies can incorporate into their holistic and dynamic marketing ecosystem.
4. Pros and Cons of Omnichannel Marketing
There will be pros and cons in any marketing strategy you choose to implement. Similarly, while omnichannel marketing is a great choice for consistent customer experience across all channels, it has some inherent flaws. With that in mind, we’ve compiled three of the vital pros and cons of omnichannel marketing to help you get a feel on how this could impact your organisation.
- More valuable customers: Omnichannel conversions are more valuable. According to the Harvard Business Review, omnichannel customers spent 4% more in brick-and-mortar stores and 10% more online. Moreover, they outspend average customers by as high as 9% in every marketing channel.
- Flexibility of choice: 54% of omnichannel customers claim that they prefer shopping with retailers that allow purchasing via multiple devices. In other words, they prefer the convenience of switching between their home PC, work PC, laptop or mobile devices when shopping online.
- B2B favourite: 72% of B2B businesses surveyed said that omnichannel customers are worth significantly more compared to single-channel customers. Conversely, 75% of omnichannel customers prefer e-commerce platforms which support omnichannel.
- Complexity: Needless to say, the implementation of a cohesive, seamless and efficient omnichannel infrastructure is a complex and time-consuming process. For small businesses, this might be too much of a challenge.
- Technology barrier: 46% of businesses face great difficulty in integrating new omnichannel solutions with their existing back-office technology.
- Creating new competition: By exposing products to consumers at multiple channels, you run the risk of introducing them to competitors (ads rarely run in isolation).
5. Omnichannel Marketing Examples
There are a growing number of companies which are successfully using omnichannel marketing. Let’s take a look at three of the most visible ones.
Orvis, the American retail and mail-order company, is one of the earliest large-scale pioneers of omnichannel marketing. Their innovative and award-winning (2017 IRT Retailer Innovation Awards) “endless aisle” solution allows customers to seamless connect with their entire product range and stock level, whether at home or instore. They can also place orders and transfer stock between branches.
In addition, customers can make payments via the Aptos Store POS system to iPad-wearing sales associates in the store using their mobile devices. This level of immersion and convenience has seen the company record a 10% growth in sales and double their customer satisfaction level.
After burning over $1 billion experimenting in marketing technologies, omnichannel integration is the name of the game for media and entertainment behemoth Disney. The company has integrated every aspect of their massive online presence into a cohesive unit. If you search for an Elsa costume on Amazon, don’t be surprised to see ads for Frozen on the Disney+ streaming platform.
If you fit the profile, you may then start seeing ads for their theme parks. And if you clicked on just one of the theme park ads, you will probably start seeing vacation packages for Disney resorts and hotels. Heck, you might even be presented with Disney soundtrack on iTunes and Google Play Store. And if you have shown even the tiniest bit of interest in other Disney assets like Star Wars, Marvel or ESPN, get ready to be served with regular content and ads.
Footwear and apparel giant Nike has taken the aggressive route in their omnichannel marketing. If you’re a member of NikePlus, be prepared to receive notifications whenever you’re in the vicinity of a Nike store. You will receive information about the latest product promotions.
The company is also aggressively developing new applications for the microchips already embedded in some of their apparels and sporting equipment. It won’t be long before they will be involved in your daily jog or recommend training routines!
1. What is Multichannel Marketing?
Multichannel marketing, sometimes referred to as cross channel marketing, is the standard marketing strategy for most businesses since the advent of the digital age. Businesses and marketers create divisions or silos for each channel and hire specialists to handle their disparate online portfolios.
These channels, which range from websites, PPC advertising, social media platforms, content marketing, catalogues and many others, are developed using customised strategies which do not overlap with each other. This is in sharp contrast to omnichannel marketing, which maintains a centralised approach on strategy, data, tracking and analytics.
Banks and retailers provide a good example of this difference. Banks have different teams managing their savings, loans, credit cards and mortgages divisions. Each division offers wildly different packages and interest rates, and pursue their objectives using different channels and mediums. Retailers, on the other hand, market their products using a unified strategy across all departments and channels to create an integrated shopping experience.
Multichannel marketing is action-centric, which means that it only works when you allocate resources in specific channels to promote your products or services. This allows businesses a lot of freedom in resource allocation – they are able to choose the ‘where’, ‘when’ and ‘how much’.
For instance, for product launches, businesses may use a launch event, print ads and TV commercials for the initial marketing rollout. For a digital product, companies may only choose to spend on a webinar, mobile apps, social media marketing and display ads.
Each channel will be able to calculate their reach and ROI accurately. This will help decision-makers to improve and refine their marketing strategies. Using these data, they might be able to create even smaller channels such as specific social media platforms or languages.
2. How Does Multichannel Marketing Work?
Multichannel marketing has been actively used by businesses since the mid-20th century. At first, the channels consisted of just print ads, catalogues and radio. Then TV came into the picture, followed by direct mail and even Teletext. Don’t scoff at the efficacy of these mediums – one sales letter used by the Wall Street Journal for cold mails generated over $2 billion in subscription revenues between 1975 and 2003!
The number of channels exploded after the Internet became accessible to the masses. Suddenly, marketers have to think about niche channels like Spanish podcasts delivered to iPhones. Obviously, not all channels are as focused as that. The more common ones include:
- Websites and blogs
- Email marketing
- Brick-and-mortar stores
- Press releases
- Direct mail (yes, this is still a huge, $10 billion a year channel)
- Marketing events
Marketing and business graduates of the last three generations have been trained in the art of multichannel marketing. So there really aren’t any surprises here. In brief though, multichannel marketing is based on predetermined marketing strategies and messaging that originate from the top.
Objective, message, identity, budget, schedule and manpower have all been calculated to the last cent, and managers and executives are expected to achieve these targets.
3. Pros and Cons of Multichannel Marketing
There are numerous strategies for businesses to market their product and expand their reach. One of the strategies is the tried-and-tested multichannel marketing. We’ll take a brief look at some of the advantages and pitfalls of multichannel marketing that you should be aware of.
- Wide reach: Multichannel marketing offers unlimited reach. The number of people you can reach is only limited by your advertising budget.
- Diversity of reach: You have the ability to reach out to specific audience. If you want to target millennials, especially women, advertise on Snapchat. Over 60% of its audience is millennials, and 70% of those are women. You can replicate the targeted approach across any number of channels.
- Cost: Multichannel marketing is not passive – you have to spend to reach your customers. Once a campaign ends, your ads will disappear. As such, careful planning and a focus on ROI is extremely crucial.
- Lead time: Since each channel targets a different demographic, your marketing team will have to craft different campaigns to effectively convert your target audience. A one size fits all approach will not work. As such, every campaign will require a lead time to prepare, at the cost of flexibility.
4. Multichannel Marketing Examples
There are numerous successful multichannel marketing campaigns over the last several decades. However, what about modern campaigns which use the latest channels?
Do you think it’s an accident that we all think they serve the best premium coffee around? Or that their customers consist of the young and trendy crowd? Do you think the product placements on movies and TV shows came naturally? Are the stylish jazz compilation CDs sold at their shop counters designed to bring in profit or generate emotional connections?
Is it so hard to believe that all this is part of Starbucks’ ethical and eco-conscious multichannel retail strategy?
Even though PCs have a 90% share of the global computer market, it seems every character on TV uses an iMac. Even though Android smartphones have an 86% share of the market, everyone worth knowing seems to be using iPhones. It appears people are not at all bothered to be paying a premium for Apple products.
Apple is reaping from decades’ worth of multichannel advertising which focuses on the unrivalled quality and aesthetics of their products. Once the Internet rolled in, Apple expanded their marketing to e-commerce (and even sold music online) augmented by trendy Apple stores that come across like relaxing oasis in suburban jungles.
This retail giant powered their branding by signing endorsement deals with celebrities like Olympic swimmer Michael Phelps, action star Dwayne “The Rock” Johnson and NFL quarterback Tom Brady. They added depth and utility to their brand by paying $475 million to purchase the highly-rated health and nutrition app, MyFitnessPal.
With their selective multichannel marketing and branding strategy, the company has positioned themselves as an innovative sportswear company.
OMNICHANNEL VS MULTICHANNEL MARKETING
For many executives, omnichannel and multichannel marketing are difficult to distinguish. After all, both use all marketing channels. Right?
This couldn’t be further from the truth. The fact is, although multichannel marketing is a relatively new buzz term, the business world has been practising the concept for decades.
There is nothing inherently wrong with multichannel marketing – the strategy allows you to reach different target audiences using different mediums. However, it has several systemic weaknesses, namely:
- Lack of consistency between different parts including manpower and budget – staff are assigned into specific departments with a given budget
- Lack of synergy between different channels
- Different messaging and style inconsistencies between different channels
- Limiting cross channel purchases, which can dampen conversions, affects revenue and customer experience
Omnichannel marketing, on the other hand, synergises all your resources to deliver a consistent and personalised experience to your customers and potential customers. As discussed earlier, the retargeting method using cookies, pixel tags and web beacons are legitimate source of privacy concerns for consumers, particularly if the information is mined and distributed by third-party vendors. However, this shouldn’t be an issue as long as businesses fully disclose their data policy to consumers (who are also protected by governmental regulations).
Since omnichannel is designed to be customer-centric, the conversion rates are demonstrably higher compared to multichannel marketing – by up to 60%, according to one source. Further, since omnichannel marketing is personalised to specific customers, the marketing cost will also be much lower. So the next time someone asks “Why omnichannel is important?”, you already know the answer.
WHAT TYPE OF CONTENT DO I NEED TO RUN OMNICHANNEL MARKETING?
At the risk of repeating ourselves, the key element of omnichannel marketing is personalisation. Unlike other content produced by your organisation or sourced externally from a copywriting agency or content creation agency, omnichannel content is targeted for specific customer profiles or product ranges.
Obviously, reacting and preparing content in real-time to individual customers is not practical. So how do you get ahead of this?
1. Map the Consumer Experience
Use existing clickstream, behavioural data, historical sales record, social media insights, web analytics and direct customer feedback to map consumer behaviour and create multiple customer profiles. For larger businesses, these profiles could go up to hundreds.
Remember to include more data over time into your mapping process. These may include age, location, operating system, screen size, visit time, etc. Every additional data will help to further refine your customer profiles.
2. Create Templates
Integrate these data with a content automation process and produce customised templates that can be modified with specific products or services. Many content creation services, like Contentor, are able to integrate their content automation software into the process.
These templates will be designed for specific and relevant stages of the funnelling and conversion process.
3. Types of Content and Platform
Your content could be in the form of articles, tweets, Facebook posts, newsletters, videos and even advertisements.
These templates will be designed for specific and relevant stages of the funnelling and conversion process. Remember to provide a brief outline to your copywriting services provider to ensure the content created will not appear out of place.
Be clear about your organisation’s values and messaging to ensure consistency across all your marketing channels.
4. Audit and Review
Perform periodic audits and reviews of your automated content using clickthrough, engagement, behavioural and conversion data. Split testing will also help to further refine the effectiveness of your content.
An effective omnichannel marketing strategy can strengthen your brand, improve market share and increase revenue. Seize this opportunity to get ahead of the competition.