In the ecommerce world, there’s been a lot of talk about omnichannel, multi-channel, and single channel, but not everyone knows what those terms really mean. Does omnichannel refer only to ecommerce sales channels? What does it mean to be an omnichannel brand? Is multi-channel the same as omnichannel? What is the difference between sales channels and distribution channels?
Yeah, things can get pretty confusing …
To help out businesses who are interested in expanding or maintaining an omnichannel brand, Extensiv recently hosted a webinar, Tools and Tips for Creating and Growing an Omnichannel Brand, presented by two omnichannel brand experts—Frazer Kinsley, Director, Consulting and Professional Services at Extensiv and Jacob Sussman, CEO and Co-founder, BX Studio—who shared their insights on topics such as:
The webinar also includes a detailed and helpful section where the presenters offered the pros and cons of both single and omnichannel methods and discussed the key factors (e.g., operational, marketing) brands should consider when determining their path to success.
Before we get into the nitty gritty, if you are brand new to the concept of omnichannel, or would like a refresher on the fundamentals, here’s an explanation of all the channels and what they’re used for.
Simply, sales channels are the methods brands use to sell their products to their customers. There are direct sales channels, where brands sell their products directly to their customers (DTC) through a brick-and-mortar store or their own ecommerce store. There are also indirect channels, where brands use an intermediary to sell their products, such as online marketplaces like Amazon.
Single channel brands use only one method to sell their products to customers. They can be direct or indirect channels (e.g., a brick-and-mortar store, selling on Amazon marketplace or Shopify), but like the term suggests, single channel brands sell through one channel and that’s it. Brands often choose a single channel method when they are just starting out, because managing only one channel makes it easier to target a specific customer base and concentrate their efforts into a single point of sale.
Omnichannel brands use a variety of sales channels to move their products and offer a seamless shopping experience for customers, no matter what channel they’re using. This strategy offers benefits like a broader customer base, better geographic and up/down market reach, and more diversified purchase options and point of sale. Again, these channels can be direct or indirect—the key takeaway is that the brand uses many channels instead of a single channel.
For example, let’s say a customer places an item in a Shopify shopping cart, but abandons the cart before the purchase. That triggers an automatic email, which is sent to the customer offering them a discount. Ads for your product also start popping up when they go to YouTube or Facebook. Then as part of your email marketing strategy, another email goes out offering them a 20% off coupon to entice them to return to their shopping cart. As you can see, an omnichannel strategy offers brands countless ways to reach their customers across their entire online experience.
Shopify defines multichannel as a business strategy that blends the customer experience and gives consumers a choice to engage on the channel they prefer. So while omnichannel employs multiple sales channels, multichannel uses one or two marketing channels to promote and advertise their products.
The terms, “sales” and “distribution” are often used interchangeably, but that’s a bit misleading. Sales channels help brands sell their products, while distribution channels are used to deliver the products. Distribution channels also include both direct and indirect delivery options. An example of a single distribution channel would be using Amazon to deliver your products, while multiple distribution channels could include Amazon, Walmart, BIPOS, etc.
If sales channels are platforms where you sell your products and distribution channels are how you deliver your products, marketing channels provide opportunities to communicate with your customers, promote your products, and create buzz about your brand. For example, you could promote your products on social media platforms like Facebook and TikTok and through events, direct mailings to an email list, and paid and free digital ads.
Now that you know the channel types, it’s time to check out our webinar, Tools and Tips for Creating and Growing an Omnichannel Brand.
And when you’re finished watching, be sure to check out these additional resources to help you grow your omnichannel brand.
How Extensiv Helped Vincero Grow Across Channels
Omnichannel Inventory Management 101: How to Optimize & Boost Efficiency
A Complete Guide to Multi-Channel Ecommerce