Multichannel vs. Omnichannel Supply Chain

Multichannel vs. Omnichannel Supply Chain

As a business, you want to make things as easy as possible for your customers. After all, their commitment to your brand will be dependent upon both the quality of products you deliver to them, and the ease of doing business together. As eCommerce is growing and a number of brick-and-mortar stores are creating expansive online sales channels, the urgency to create a more streamlined supply chain process is more important than ever. This topic revolves around the concepts of multichannel and omnichannel supply chains:

Multichannel Supply Chain

When the internet grew and provided opportunities for businesses to sell their products online, the concept of the “Multichannel Supply Chain” was born. The process stems from this type of case:

Customers are looking to purchase a product from your company. They have a physical store near their home and are now able to buy the product either in-store or online.

The mentality behind multichannel supply chain often creates an attitude within an organization that departments should work independently of each other. This type of mentality leads to what we call an “organizational silo”. Said differently, the online store may have its own sales department, shipping department, warehousing software, etc. that does not overlap with the company’s brick-and-mortar location’s departments. As sales increase and grow, so does the disconnect between the two departments, which ends up creating more costs and a slower supply chain.

A few common examples of issues that the multichannel supply chain creates are:

  • A person purchases a product online but cannot have it shipped to the store – only their own address.
  • Prices in-store are different than online.
  • Online sales/discounts are not applicable to in-store items and vice-versa.
  • Emails from the company may only be relevant to the online store.

This causes customers to get frustrated when the product options or discounts are not available on their preferred channel. The omnichannel is seeking to fix this issue.

Omnichannel Supply Chain

The omnichannel supply chain is an attempt to unify the departments of an organization across all sales channels. Whether in-store or online, the goal is organizational unity in process and approach to order fulfillment, sales, marketing, warehousing, shipping, and all other departments of a company.

A classic example of the omnichannel is the ability for customers to ship online orders to their home address or a local store. Customers who have the freedom to order as they wish – fulfilling online orders with in-store pickups or vice versa – are more likely to purchase frequently from a company. The omnichannel meets the customer where they are at by uniting all sales channels seamlessly for an easier, more engaging shopping experience.

Conclusion

Sales success today is all about convenience. If you make a shopping experience for a customer incredibly inconvenient, you will lose their business. There’s hundreds, or perhaps thousands of other solutions any customer can turn to that promise ease of business. The multichannel supply chain does not provide the same convenience as the omnichannel supply chain.

The multichannel supply chain keeps departments such as sales, marketing, shipping, warehousing, inventory, etc. separate between online and in-store sales channels. Customers don’t have the option to order online purchases to be shipping to their local store, and local stores cannot integrate a customer’s online account with their in-store purchases for discounts and deals.

The omnichannel is fixing this issue by uniting all departments from online to the brick-and-mortar locations of a business to create a more integrated, seamless shopping experience for customers.

If you would like to learn more about omnichannel supply chain, or how your business can begin to implement it in your organization, reach out to one of our team members! We are happy to answer any questions that are within our range of expertise!

(Digital Marketing Coordinator)

Chris Fleming manages and oversees all digital marketing efforts and strategy of Interlog USA, including content marketing, email marketing, video production, and market research. Chris also works in supervision of the marketing and sales department to restructure, fine-tune, and manage the company's sales process to increase the effectiveness of outbound and inbound sales tactics.

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