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Multichannel retailing or Omnichannel retailing is the use of a variety of channels in a customer's shopping experience including research before a purchase. Such channels include retail stores, online stores, mobile stores, mobile app stores, telephone sales and any other method of transacting with a customer. Transacting includes browsing, buying, returning as well as pre-sale and after-sale service.
Up until the early 1990s, retail was either a physical brick and mortar store or catalog sales where an order was placed by mailing it to the merchant or via telephone. Catalog sales started in the late 1800s when Sears & Roebuck issued its first catalog. Over 20 years later, L.L. Bean started its catalog business.
In the early 1990s, AOL, CompuServe and Prodigy experimented with selling through their proprietary online services. This was the start of sales channel expansion in a retail environment that had changed little in nearly a century. While general merchants (e.g. the corner store) had evolved to department stores and Big Box, electronic ordering was a whole new frontier. Internet transactions were taking place sporadically, but they weren't secure (e.g., credit cards were passed in the open rather than being encrypted).
This started to change in August 1994 when NetMarket processed an Internet sale where for the first time the credit card was encrypted. Shortly thereafter, Amazon.com was founded and eCommerce sales channel established itself. Mobile commerce arrived in 1997, and multichannel retailing really took off. Multichannel retailing is about selling through a variety of sales channels, but these sales channels are generally independent of one another so they are not integrated; as a result, this rarely provides a consistent customer experience. Integrating the sales channels is just starting to get some attention and is widely viewed as the next evolution of retailing which is being as coined as omnichannel retailing.
Multichannel retailing or omnichannel retailing is often said to be dictated by systems and processes when in fact it is the customer that dictates the route they take to transact. Systems and processes within retail simply facilitate the customer journey to transact and be served. This is no longer a linear process, but is now due to multiple channels a very complicated path to purchase. Pioneers of multichannel retailing include L.L. Bean, Land's End, Macy's, Next PLC, John Lewis and Neiman Marcus, though specialist businesses such as ChannelGrabber have helped make the concept the success that it is in modern eCommerce. The pioneers of multichannel retail built their businesses from a customer-centric perspective and served the customer via many channels long before the term 'multichannel' was used.
Omnichannel retailing is the use of all physical channels (offline) and digital channels (online) which offers a seamless, innovative and unified customer experience. Omni comes from the Latin "omnis" which means "every/all" and channels refers to the method in which consumers interact with the company.
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