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Omnichannel Vs. Multichannel Supply Chain: What’s the Difference?

Multichannel Supply Chain

In supply chains, omnichannel solutions are often used interchangeably with multichannel solutions. On the surface, both forms of supply chain operations seek to provide multiple sales channels to consumers. However, understanding the elements of omnichannel vs. multichannel supply chain is essential to maximizing profit margins in a tightening economy.

What Is Multichannel Supply Chain?

Multichannel supply chain solutions rose in response to the rise of the internet. Consumers wanted options in how they purchase goods.

For example, consumers can purchase items online or in brick-and-mortar locations.

However, multichannel supply chains tend to develop organizational silos that focus solely on serving one channel. In other words, online sales may have its department, warehouse management system and transportation system, and brick-and-mortar stores use similar systems. Unfortunately, a disconnect grows between each department, increasing costs and reducing visibility across the supply chain.

Consider how consumers may feel when confronted with businesses using multichannel solutions. Product purchased online can only be shipped to a consumer’s address. Items purchased in the store may have different prices than online sales. Meanwhile, using promo codes from emails or online deals may not be used in brick-and-mortar stores. As a result, consumers become frustrated and face many different obstacles to completing orders when products are or are not available in their channel of choice.

What Are Omnichannel Supply Chains?

Omnichannel supply chains are like multichannel supply chains in respect to serving consumers across different channels. However, omnichannel solutions provide one-touch integration across all channels to provide a superior customer service experience.

Recall the previous example of consumers shopping with businesses utilizing multichannel sales. Unlike the drawbacks of multichannel sales, omnichannel solutions give consumers the flexibility to ship items from e-commerce sites to their home or stores. Also, consumers may opt to complete purchases online and in storefronts simultaneously, and if an item is unavailable in the store, consumers can order from their smartphone.

This is the omnichannel shopping experience, a constant flow of products between all sales channels seamlessly. Consumers that have the freedom to purchase individual items while still making in-store purchases and vice versa are more likely to complete their purchases. Similarly, if consumers run into any of the potential roadblocks in multichannel-exclusive supply chains, they are likely to abandon their carts for your competitors.

Consumers Demand Omnichannel, Not Multichannel Sales Experiences and Service.

Omnichannel supply chains also go further than multichannel sales by focusing on creating supply chains that have strategic value, improving sales and encouraging repeat purchases among consumers. Consumers are also pushing the industry toward omnichannel supply chains as consumers use nearly three channels per transaction before making a purchase. Therefore, if your supply chain has not yet implemented omnichannel solutions to serve consumers, you are probably losing revenue. Let Veridian Solutions help your business reach a higher level of omnichannel sales and service now.

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Jason Rosing

Jason Rosing

Co-Founding Partner & WMOS / EOM Subject Matter Expert at Veridian
Founding partner of Veridian; a valued Manhattan Associates partner and technology leader specializing in user-friendly, robust and flexible automated testing and configuration management solutions designed to meet the ever-changing challenges of the omni-channel landscape.
Jason Rosing
Jason Rosing
  • I believe there is a different distinction between “multichannel” and “omnichannel” supply chain operations. In fact, philosophically multichannel can be more appropriate than omnichannel. (And even single-channel operations can be more appropriate than either.)

    In recent years, I’ve observed that most practitioners in our industry have developed a mindset that all businesses with supply chain operations must have omnichannel supply chains. Omnichannel seems to have become the proverbial Kool-aid of supply chain industry. Nothing is further from the truth. There are certainly a lot of businesses, such as many consumer goods companies, that will benefit from true omnichannel operations. But there are also many businesses who have no need to support certain sales channels. In that case, why should they be expected to support all of them?

    The key is to be requirements-driven, not solutions-driven. In the spirit of Lean, it’s all about the voice of the customer: Customer demands drive supply chain requirements. If the customers of a business want to be served through every sales channel, then an omnichannel supply chain is the right answer. But if they only want to be served through certain sales channels, then a multichannel, or even single-channel, supply chain is more appropriate.

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    Steve Hopper
    Inviscid Consulting, LLC

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