Multi-channel and omni-channel are two hot buzzwords in the retail world right now. Both terms represent a shift in the way retailers sell and customers buy. And on the surface, multi-channel vs. omni-channel seems like a moot point because they apparently describe the same thing. I was one of those people who thought they were one-in-the-same: Both describe a retail strategy that combines traditional bricks and mortar with other selling channels.
I was wrong.
Others had been making the distinction between multi-channel vs. omni-channel for years, but I was not one of them. The topic is up for debate—conduct a Google search and you will encounter much disagreement and confusion on what each exactly means, as well as if they actually differ. Some consider omni-channel as a consistent brand experience, whereas multi-channel refers to strategies within a given channel.
Although I now believe omni-channel and multi-channel are two different animals, I don’t subscribe to the definition above. The contrast runs much deeper than that, and retail real estate reps and researchers must know the difference in order to be effective in 2016. Here is my take on the struggle to sort out multi-channel vs. omni-channel:
Sears: A Multi-Channel Pioneer?
Multi-channel may seem to be something new, emerging only after the Internet exploded onto the scene a couple decades ago, but its roots go further back than you can imagine, all the way to the 19th century. Consider the history of Sears, the venerable (and yes, I know, currently flailing) department store. Sears started a mail-order catalog in 1888, then expanded into retail stores in 1925. The store was exclusively in one channel (catalogs) and then expanded into another (bricks and mortar). If you are of a certain age, when you hear the name Sears, you think of both channels (and if you are young enough, you might also connect Sears with its online store).
The Difference, Metaphorically and Practically
Given the Sears example, you see how the retailer clearly has been multi-channel for more than a century. I like to think of multi-channel as a personal computer from the 1980s. Those old machines were more a collection of parts than one consolidated technology. You had the CPU, the monitor, a standalone disk drive, a standalone modem, multiple cables, and so on; many of those parts were bought separately and patched together. Even the PC towers of the 1990s still had to be assembled somewhere along the line—for example, the sound and video cards might have been from a different company than the processor. Sometimes, the damn things would work well together, and sometimes, they wouldn’t and you would be left fiddling with IRQ settings and jumpers. This, in essence, is multi-channel: A collection of possibly disparate parts that aren’t necessarily in union.
Omni-channel in this metaphor is Apple inventing the Macintosh (and then, eventually, the iMac), which combined most of the various components into one convenient package. All you did was plug it in, turn it on, and get to work. All the parts on those old Macs—the same basic necessities as in a PC—existed perfectly together, carefully crafted to work in sync. This is the omni-channel, and from a retail perspective, practical examples of its capabilities include:
- If I buy something online and must return it, I can seamlessly do so at a bricks-and-mortar store. A clerk doesn’t tell me to ship it back via UPS, even if the item is one that isn’t carried in the physical store.
- By researching online, I can determine if an item is at my local store. If it is, the price is the same as it was online. If it’s not, I can order it for pickup at the nearby location.
Returning to the Sears example, the retailer saw an opportunity nearly a century ago to adjust its sales model to consumer needs and tastes. And consumers then were changing—they were more mobile and could easily go travel to a nearby store to view goods before purchase. The multi-channel made sense then, as it did over the past two decades with the proliferation of the Internet. Most retailers today are multi-channel, given the necessity of having an online store. But few are omni-channel—a reality that is beginning to change.
I am thoroughly convinced that omni-channel is the future of retail, which, thankfully, means that bricks and mortar is very much a part of the future of retail as well. All retailers will eventually need to implement an omni-channel strategy in the future in all facets of their operations, including retail site selection. But if we can’t agree on what exactly omni-channel and multi-channel are and aren’t, we won’t be effective at discussing it.
What is your opinion on multi-channel vs. omni-channel?