Multichannel Vs Omnichannel Fulfilment: Which is Better?
Multichannel and Omnichannel sound extremely similar but they are two distinct approaches to fulfilment. They both have benefits and drawbacks that make each approach worth considering but ultimately, they are both far more superior than a single channel approach.
Although they can be applied to both physical stores, social media, and other digital channels; they’re more than empty buzzwords and can be used to help improve your e-commerce strategy by providing a more holistic approach to managing different channels.
Here at Allegro Logistics, we are one of the leading ecommerce fulfilment specialists in the UK. In this blog post we’ll discuss what each of the two approaches mean and how they can benefit your e-commerce business.
What is Omnichannel Fulfilment?
Omnichannel fulfilment refers to an approach of digital channel management that is very customer focused. This type of fulfilment strategy therefore aims to provide a seamless experience between different channels. This is achieved by more integration of different channels and data synchronisation which makes sure the various channels are working towards the same aim.
Because of this integrating different digital channels by providing a consistent offering is important for achieving an omnichannel approach but physical stores also play a vital role in creating a smooth experience for customers. This is why things like ‘click and collect’ or returning e-commerce goods to a physical store are more associated with omnichannel fulfilment.
Having both digital channels and a physical location doesn’t automatically create an omnichannel approach though, all the channels have to work well together and provide a consistent experience.
What is Multichannel Fulfilment?
Multichannel fulfilment refers to fulfilling e-commerce orders from various channels. This can include different types of channels such as physical and online stores. This allows a business to target a wider audience by getting their product portfolio in front of more people and providing more means of taking orders.
Contemporary marketing strategies already typically use a multichannel approach with marketing channels like social media, the official website and email marketing. This makes it easier to apply multichannel fulfilment because all it requires is setting up an additional website or joining a marketplace like Amazon or eBay.
Multichannel vs Omnichannel Fulfilment: what’s the difference?
It’s quite easy to confuse multichannel and omnichannel fulfilment because they are so similar, and it can be quite difficult to distinguish between the two unless you have all the information about how a business promotes its products and interacts with customers.
One of the major differences between the two is that multichannel fulfilment prioritises the products whereas an omnichannel approach focuses on the customer and their experience with a sales/fulfilment channel.
There are also differences in how inventory is allocated, multichannel fulfilment channels will have their own inventory whereas with omnichannel fulfilment, inventory is available to all the respective channels. This centralised approach to inventory management requires complete integration in order to be accurate and avoid taking orders for out-of-stock products.
With multichannel approaches, customer typically only interacts with one channel. On the other hand, an omnichannel approach typically leads to the customer engaging with multiple channels.
The last difference between the two approaches to retail and fulfilment is that multichannel usually uses separate marketing strategies for each marketing channel and omnichannel fulfilment requires an integrated and holistic approach to marketing and sales channels.
Benefits and Drawbacks of Multichannel Fulfilment
Although a multichannel approach may seem less effective than an omnichannel one, it does have its benefits. One of the main benefits is that it allows a business to differentiate between different channels and keep them separate. This is particularly useful for brands that want to:
Additionally, it allows brands to reach a wider target audience without creating a completely integrated approach to different channels.
The drawbacks of Multichannel Fulfilment are mainly related to the fact that channel would require more attention than if they were all on the same page such as with omnichannel fulfilment. One of the drawbacks this causes is that inventory management can become more complicated and costly as you’d have to keep track of multiple inventory sources.
A major drawback is potential customer dissatisfaction which can be caused when a customer anticipates omnichannel benefits like returning an e-commerce order in-store and finds out that it’s not possible to do so.
Learn more about how to create an effective returns solution >
Benefits and Drawbacks of Omnichannel Fulfilment
A lot of benefits related to an Omnichannel approach are based around the fact it’s a holistic, seamless approach and this makes management a lot easier. Inventory management is therefore a lot easier and can be more affordable due to stock being centralised. The consistent experience for customers on each channel helps build a strong brand and customer loyalty.
Customer satisfaction also improves due to the convenience and added value associated with an integrated approach. This can however lead to physical stores becoming overwhelmed with e-commerce related orders and returns. Another drawback of omnichannel fulfilment is that it can be costly and extremely demanding to successfully implement a completely integrated approach.
Learn more about how to improve the customer experience for your business >
Omnichannel vs Multichannel: Which approach is better?
Ultimately this will depend on a range of factors such as how experienced you are with different sales channels or marketing strategies and how many resources you have available to you. If you’re not a large retailer and don’t have a physical store, then it’s quite difficult to achieve a truly integrated approach.
It is considered worth it to go with an omnichannel approach compared to a multichannel approach though due to the increase in customer satisfaction and the brand strength associated with the consistency of different channels. The reduced number of marketing strategies and other management tasks also makes it a very attractive option.
This doesn’t mean a multichannel approach cannot also be beneficial and it is far more effective than a single channel approach. It still has the potential to massively increase customer satisfaction and can help you significantly increase the size of your audience and therefore potential customers.
Regardless of the approach you end up going with, the ability to effectively implement each approach will depend on how committed you are to expanding your sales channels. To create a truly seamless Omnichannel fulfilment approach, you will need a reliable fulfilment service provider.
Seamless Integration of Channels with Allegro Logistics
Here at Allegro Logistics, we understand the importance of truly seamless omnichannel approach and therefore aim to provide the best possible experience for your fulfilment needs. Our WMS and other software integrations allow to connect multiple sales channels and manage them more effectively by maintaining consistency and having full control over your approach to fulfilment.
Get in touch today to find out how we can help you take your e-commerce sore to the next level.
