As the name implies, in a multichannel model, orders are fulfilled through multiple channels, but each channel functions separately and has its own inventory, order, and fulfilment processes.
For example, if you’re selling products both on Amazon and through your own website, you'd have separate inventories for each platform. You might use Amazon's Fulfillment by Amazon (FBA) service to manage orders placed on the Amazon platform, while for orders coming through your website, you might work with a third-party logistics provider (3PL) or rely on your own in-house fulfilment system.
Omnichannel fulfilment is a streamlined method of managing inventory and processing orders across all sales channels. Unlike multichannel fulfilment, where each sales platform has its own separate inventory, omnichannel fulfilment maintains a single inventory for all channels.
This means that whether a customer places an order through your website, mobile app, social media, or in-store, the same inventory is used, and the fulfilment process remains consistent. Every channel is able to integrate with and relate to one another.
This approach is more convenient for customers as it produces a singular experience – they can shop and interact with your brand across various channels without encountering discrepancies in product availability or order processing.
For businesses, omnichannel fulfilment reduces complexity and improves efficiency by centralising inventory management and standardising order fulfilment procedures. It also enables better visibility into stock levels and customer demand across all sales channels.
The main difference between the two approaches is that multichannel focuses on customer engagement, while omnichannel focuses on customer experience.
When it comes to choosing which one is right for you, the omnichannel strategy might seem like the obvious choice here since it promises a much smoother customer experience. However, it’s not actually so clear-cut. Your decision will ultimately depend on your business’s current stage and how complex your operations are.
As a smaller business with fewer resources, you may find it more manageable to start off with a multichannel approach, and then gradually link all your channels as you grow and expand.
Eventually, you’d want your multichannel strategy to evolve into a fully functioning omnichannel ecosystem where all your online and offline orders can be integrated. This means all goods can be shipped together or picked up in one go, as if they were part of a single order. This streamlines the process and will be more convenient for your customers.
When that time comes and you’re ready to take a step further, you could invest in your own fulfilment warehouse, equipment, technology, and recruit a team to manage your fulfilment. The problem is, that route is usually quite costly and requires a significant amount of time, effort, and resources.
That's why many businesses prefer to partner with a third-party logistics provider (3PL) instead, who can efficiently manage their entire fulfilment process, saving them the trouble and allowing them to focus on building relationships with their customers and growing their business.
Choosing between multichannel fulfilment, which offer flexibility, and the seamless integration of omnichannel fulfilment ultimately depends on where your business is at right now, what you aim to achieve, and what your customers need.
That being said, it’s easier to please today’s customers when your fulfilment is flexible, which multichannel sellers sometimes struggle with because their sales channels are separate.
While you don’t have to adopt this strategy right away, omnichannel fulfilment is a great way for your business to meet this demand for a smoother shopping experience.
