Where Multichannel and Omnichannel Selling Diverge

Wikipedia's editors removed the omnichannel retailing entry and redirected it to multichannel retailing in early March. What prompted the move? The editors didn't see a clear difference between the two.

Retail isn't the focus of Wikipedia's editors day-to-day jobs, so a clearer definition is obviously in order. But if the folks at Wikipedia are unclear where the two diverge, there are probably people involved in B2B and B2C today who don't understand the difference as well.

Let's start with a brief history of retail to show how we arrived at multichannel selling -- because we’re now over 20 years into this.

A Walk Down Retail Memory Lane 

Until the early 1990s, retail meant either a physical brick and mortar store or catalog sales where people placed orders by mailing them to the merchant or over the telephone.  Sears & Roebuck ushered in catalog sales in the late 1800s when it issued its first catalog. Over 20 years later, L.L. Bean started its catalog business. And retail sales channels stayed pretty consistent until the late 20th century.

Fast forward to the early 1990s. AOL, CompuServe and Prodigy experimented with selling through their proprietary online services. This was the start of sales channel expansion in a fairly static retail environment. A handful of merchants had both a brick and mortar and catalog presence, but they were the exception.

And while general merchants (e.g. the corner store) evolved to department stores and big box, electronic ordering was a whole new frontier. Internet transactions were taking place infrequently, but they weren't secure (e.g. customers submitted credit cards in the open rather than through an encrypted site).

NetMarket changed this when it processed the first Internet sale with an encrypted credit card in Aug. 1994. Shortly thereafter, Jeff Bezos founded Amazon.com and the e-commerce sales channel quickly established itself. Mobile Commerce (m-commerce) arrived in 1997, and that’s when multichannel selling really started taking off.

Connecting the Customer Dots 

Multichannel selling is about selling through a variety of sales channels. These sales channels generally act independently of one another, are not integrated and rarely provide a consistent customer experience.

This inconsistency is a key point and the primary differentiator between multi- and omnichannel selling. To keep the peace inside of companies, businesses separated e-commerce and m-commerce initiatives from the traditional brick and mortar and possibly catalog business environment. This resulted in little, if any, integration between the different channels. And the customer bore the brunt of this.

Shoppers now use multiple channels when making a purchase, which is widely viewed as the next evolution of retailing -- omnichannel retailing. Companies have pushed concepts like 360 degree views of cross-channel customer activities for many years, but only recently has the concept become a reality. Businesses recognize they are providing inconsistent customer experience across sales channels, because customers are letting them know.

And with Amazon and other e-tailers delivering a vastly improved customer experience, companies have no choice but to play catch up. Don't underestimate the impact of pure play e-tailers emergence on omnichannel retailing. As sales keep migrating online -- topping over $300 billion in the US in 2014 --companies have to stem the tide. And knowing they aren’t going to become e-tailers, this means leveraging all of their sales channels to competitive advantage.

Consider these scenarios which couldn’t have taken place until just a few years ago:

  • A customer browses and buys via a website on their lunch break. Rather than waiting for the purchase to ship, she picks it up in store on her way home from work
  • A customer browsing on a website adds an article of clothing to his cart. Before buying, he stops by the store to try on the item to make sure it fits. As he enters the store, his mobile device alerts a representative that he has just entered
  • Someone orders a gift via a contact center. The recipient decides the gift isn't a perfect fit. She goes online, prints a return receipt and schedules a pickup from a parcel company

These few examples highlight how customer experiences and customer expectations are quickly changing. While the transition from multi to omnichannel selling is just picking up steam, it’s the logical evolution for companies that expect to maintain their market position.

And though the e-commerce and m-commerce waves arrived within the last 20 years, companies should expect shorter release cycles for new disruptive technologies. The days of maintaining a relatively stable business environment for 50, 60 or 70 years are long gone, but the businesses that can embrace omnichannel selling will retain their relevancy and ideally prosper.

Creative Commons Creative Commons Attribution 2.0 Generic License Title image by  r.nial.bradshaw