May 03, 2022

10 min. read

Omnichannel vs Multichannel : Which is best for your E-commerce Retail Business

By Sander Kah

Omnichannel vs Multichannel banner

In recent years, customers have used many options for getting in touch with a business, including the company's website and online marketplaces like eBay and Amazon. Getting in touch with a business can sometimes be as simple as sending an email, calling on phone, or visiting a physical location in person. For this reason, online retailers have designed systems that integrate all of these channels into their e-commerce platforms so that customers can get the most out of their shopping experience.

Multichannel retail and Omnichannel retail are the two most common types of integrated systems. As companies try to figure out which strategy will work best for their specific business model, the argument over which integrated system is better rages on. However, in practice, only certain businesses can benefit from the use of omni channel and multi channel technologies.

Omnichannel vs multichannel E-commerce systems

We'll look at both multichannel and omnichannel e-commerce in this post, compare the two, and suggest the best use cases for a business.

What is Multichannel e-commerce?

Multichannel E-commerce System

Multi channel e-commerce is the process of selling products on numerous marketplaces and platforms rather than just one. For instance, a brand can list a product on its online store, list the product on Amazon, have the product in its physical locations, and advertise the same product on Facebook and other social media platforms.

This is a popular strategy for sellers that want to increase their brand’s reach and attract new customers. According to emarketer forecasts, multichannel sales will make up close to 46% of e-commerce sales by 2023. In the United States, e-commerce sales generated by multichannel online retailers in 2020 exceeded 350 billion dollars. By 2023, the total sales from multichannel e-commerce are predicted to reach 575 billion.

It's clear why so many online brands use a multichannel approach to e-commerce. Instead of managing orders on each channel separately, many brands use multichannel e-commerce software or order management solution to manage orders and optimize operations.

Why Is multichannel platform necessary for e-commerce?

If your team uses spreadsheets and performs manual inspections, you're working hard, not smart. Multichannel stores can benefit from software solutions designed specifically for their needs.

This means that tasks that would otherwise have to be performed on many platforms can be consolidated with multichannel e-commerce software. In addition to streamlining your operations, multichannel e-commerce software lets you better serve your clients. Meanwhile, you're keeping track of your inventory levels, sales, and client interactions.

Your primary priority should be ensuring that your customers receive the best service possible. This is especially critical if you are a marketplace seller because bad reviews could harm your chances of enjoying seamless product sales and growth.

How does multichannel e-commerce work?

The first step in multichannel e-commerce starts by utilizing the right e-commerce software platform. With the ideal platform, all sales channels of a company's e-commerce system will be connected to the multichannel platform via APIs to a single dashboard. When customers order on any of the channels, the order will reflect on the main dashboard of the Multichannel platform. In this way you can serve your products on multiple channels and still keep your inventory in control.

The ideal multichannel platform works in three simple steps:

Multichannel platform infographic

Product data is housed in a central multichannel platform

Data about a product must already exist before it can be transferred to other channels. In this first step, the e-commerce brand will upload product data to the central platform, including photos, descriptions, UPCs, variations such as different colors and sizes, prices, and stock availability. There is only one source of truth for all of the product data, and it is this repository.

Product data is organized and shared to other channels

Data requirements, integrations, and policies vary widely between channels. Therefore a company's product data cannot be exported to any of the web's various channels without modification. Utilizing a world-class technology solution, especially for organizations with many SKUs in their catalogs, simplifies this process.

The company uses the multichannel platform to share product data across several channels, adjust product listings to improve performance on each targeted channel, and then use APIs to sync data across all channels and the central point. The product feed is updated on a regular basis with the most up-to-date product information, such as availability, new products, and price changes.

Some brands consider creating the multichannel platform in-house. However, it will take a considerable investment in terms of time and money to create internally, acquire channel expertise, and maintain ongoing data feed maintenance.

All Channels are Monitored and Managed from One Dashboard

To fulfill orders from a marketplace, a company must first receive the order, then match the ordered item to the relevant product, ship it, and provide tracking information to the marketplace so that the consumer is notified. Using the multichannel platform, this is accomplished effectively.

Fulfilling orders will become even more efficient when more marketplace channels are added to the mix because some processes will be automated, allowing a company to dramatically optimize its operations and online sales.<br><br>Orders will be processed efficiently through this multichannel network, whether they come from Amazon, eBay, or a company's physical store. Stock inventory will also be updated across all channels.

Types of Multichannel E-commerce Software

When managing many channels, you can use software to simplify many aspects of your sales process. Let's look at some of the critical tasks that multichannel e-commerce software may help with and a few industry-leading technologies.

  • Multichannel Order Management Platform

The Multichannel Order Management platform is a software system designed for retail businesses that sell both online and offline. This software addresses two significant issues. First, the software collects orders from all channels and displays them in one dashboard. Second, when prices change, they update all channels with the new prices.

Some Multichannel order management platforms go above and beyond to provide complete commerce management solutions. Afosto’s order management software provides a central connection between a physical store, marketplaces, POS systems, social media sales channels, In-store screens, and a company’s webshop. Managing all business sales channels is a sure way to guarantee that your customers will have a seamless experience with your brand.

  • Multichannel Inventory Management Software

Multichannel inventory management software lets you keep track of all your stock and orders from a single location. With this tool, you won't have to cancel any customer's orders if you run out of stock on any platform you sell on. It's much easier to keep track of all of your inventory and orders when they're all funneled through a central system.

Inventory management is on another level with Afosto’s inventory management system. A retailer or wholesaler using this system will save time because they can manage product texts, images, prices, and specifications in one place for all sales channels.

Key Benefits of Multichannel Selling?

You're undoubtedly aware of all the advantages of utilizing a multichannel platform at this time. However, just to put things in perspective, we've included a couple more benefits.

Increases potential revenue

A multichannel e-commerce platform gives you extra sales channels, which means your brand's visibility improves dramatically while also allowing you to explore a broader range of market segments. This will assist you in attracting more potential customers and increase your sales. It also offers a variety of chances to upsell your customers, ranging from everyday necessities to impulse purchases and personalized recommendations, all of which contribute to your bottom line.

Reach a broader audience

A multichannel order management system increases your customer base and helps you reach a broader audience by increasing your mass-market distribution. Even if you're a tiny business, you may reach a far broader audience by leveraging the enormous reach of giants like Amazon to promote your products and services. This additional exposure would lead to more money with the simple fulfillment and checkout processes provided by multichannel selling software.

Easy access to customer information

When you have a lot of sales channels, you'll have a lot of data to work with to build a thorough profile of your target clients. Demographics, purchasing history, time zone, location, shopping devices, and interests are all examples of data. This data can assist you in developing a more precise sales strategy and a more effective marketing strategy to improve your conversion rate.

Improved forecasting

Each year, overstocks cost businesses around the world a lot of money. Often, overstocking is caused by lousy purchasing and planning decisions resulting from inaccurate forecasts and incomplete data. A multichannel inventory software lets you see every performance and sales statistic from your sales channels. As a result, your company's sales forecasts are more accurate, and inventory management is more precise, improving performance.

What is Omnichannel E-commerce?

Omnichannel commerce is a multichannel commerce strategy that emphasizes a personalized shopping experience for customers. An omnichannel strategy integrates sales and marketing to ensure that customers smoothly transition from one channel to the next if there's a need. These platforms try to retain their customers by providing personalized experiences through their websites, apps, and some marketing channels.

Key difference between Omnichannel and Multichannel E-commerce

There are a few differences between Multichannel and omnichannel. The decision to use one of the two platforms boils down to a company's business model, marketing, and customer requirements.

Multichannel is channel-centric; such platforms ensure that a brand's entire sales channels are effective and well managed. Order and inventory management are the same in a multichannel system, whether at a physical store, webshop, or marketplace. Customization happens in a multichannel platform, but these platforms don't lead with it. A multichannel e-commerce system is ideal for retail brands.

Omnichannel is customer-centric and focuses on personalizing a client's experience by understanding where they are in the buyer's journey and interpreting their behavior across several touchpoints. The goal of omnichannel platforms is to increase customer retention by prioritizing customer follow-ups across all channels.

Subscription-based brands such as Netflix and Spotify, as well as some retail brands such as Nike, come under this category. Nike employs an omnichannel approach to ensure that marketing and customer experience are consistent and customized across numerous touchpoints such as their online store, mobile apps, and in-store screens.

Key Similarities between Multichannel and Omnichannel E-commerce.

There are some striking similarities between multichannel and omnichannel e-commerce systems. First, in both systems, store owners can integrate multiple sales channels like marketplaces, physical stores, and social media stores, to reach far and wide for new customers.

Secondly, inventory and order management and product shipping on both omnichannel and multichannel platforms are done from a single dashboard. Whether a customer purchases a product from a marketplace or through a social media platform, both multichannel and omnichannel systems process orders from a central point.

In addition, in both e-commerce systems, the only way to track customer behavior is through cookies or a registered email address. For instance, unless a customer visits a product website and receives browser cookies or registers with their email address on the website, the website owner has no way of tracking the customer if they decide to go to a different sales channel.

Finally, CRM integration is possible with both platforms. When a customer purchases something from Amazon, information about the customer's order, identity, and location are sent via API to the seller's commerce system, whether it's omnichannel or multichannel. Both commerce platforms can generate customised campaigns to communicate with the buyer using their data saved in the CRM.

What is the Most Effective Strategy?

In many aspects, multichannel and omnichannel are similar. An omnichannel strategy is still a multichannel strategy because it provides clients with more than one sales and marketing channel. The primary distinction between the two systems is based on which one best fits a company’s business model. Subscription businesses such as Hulu, where retention is an essential aspect of the business strategy, can benefit from an Omnichannel system.

Retail brands require a multichannel system that efficiently manages many sales channels, the easy integration of relevant software, and a world-class inventory management system. Afosto, a robust multichannel e-commerce system, is an easy way to ensure that channels are connected to your CRM and current customer interaction channels. Schedule a free demo today!


A multichannel retailer is a brand that sells its products through many channels. Such a brand could have a webshop, a physical store, marketplace stores on Amazon and eBay, and even sales channels on social media sites.

The major difference between omnichannel and multichannel customer experience is in a company’s business model. In omnichannel, the company’s business model survives on retention, hence the reason for customized customer experience. Whereas, in multichannel the priority is more sales and efficient order and inventory management.

Written by
Sander Kah

I'm Sander, a SaaS entrepreneur with over 5 years of experience in co-owning and growing a software company, Afosto, that helps retailers succeed using smart and scalable software solutions. I'm also the co-founder of Sanwin Beachwear, an exclusive beachwear brand for men, and a pilot, flying Boeing 737 aircrafts across Europe and beyond. I'm passionate about creating value for my clients, partners, and customers, and seeing them achieve their business goals and reach new heights. When I'm not in the cockpit or the boardroom, I love to explore the world, kitesurf, and camp in my van. I'm always open to connect and exchange ideas with like-minded people, so feel free to reach out to me.

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