Why omnichannel & multichannel strategies fail?

For over 20 years, the push for concepts like multichannel and omnichannel has been justified by the goal of being customer-centric. Initially, this approach simply meant being available across multiple channels so that customers could make purchases no matter where they were – that's the essence of multichannel.

However, buyers became increasingly aware and demanding. Segmentation based on preferred interaction channels with the brand proved insufficient, and people began switching channels more frequently, which leads us to the next concept – omnichannel. In theory, it involved building a brand presence across various channels to ensure consistent buyer experiences. Omnichannel wasn't about making experiences identical, but rather ensuring that the entire customer journey ran smoothly and uninterrupted when buyers switched channels. I dare say that this idea still shines brightest on PowerPoint slides. Unfortunately, much to the dissatisfaction of customers, most companies have failed to find and/or effectively implement the Holy Grail of omnichannel.

As someone who specializes in customer experience daily, I ponder: Why do retailers, despite knowing that great CX demands tackling cross-departmental challenges, persist in channel-centric approaches, merely paying lip service to customer-centricity? Why do they keep designing transitions between channels and – at the same time – preach about channel complementarity? Why don't they address challenges and silos outside the organization while dealing with them internally? Has anyone ever encountered a real customer who actually noticed any benefits of switching between channels?

Phygital is the new normal

Phygital is all about using technology to blend the physical and digital realms to create personalized experiences and deepen users’ engagement with products, services, or brands.

Our report “Żyjesz w phygitalu, choć o tym nie wiesz” shows how Poles use and perceive phygital technologies – the bottom line is clear: consumers realize that the digitalization of their lives is inevitable. Despite differences in how deeply individuals are immersed in the phygital world based on age and lifestyle, Poles often use technology without much thought. What's intriguing is that we’re ready to overlook technological flaws and even brush aside security concerns if a given solution simplifies our lives.

Smartphone – our master key and window to the world

Our “Młodzi vs Mobile” report from last year revealed that a staggering 87% of the youngest respondents spend up to 10 hours a day on their screens, with 9% exceeding that threshold. Furthermore, our latest report on phygital tech, mentioned earlier, confirms that smartphones have become an indispensable tool for Poles, facilitating the completion of a growing number of important tasks. Many view this device as more personal than their homes or apartments, which might initially seem like the epitome of privacy. We can't imagine life without phones, yet, our concerns about security and privacy are particularly paramount when technology is connected to our smartphones.

We use smartphones to interact with both the online and offline realms – we navigate everyday life and explore the world through these handheld devices. For retailers, this unequivocally indicates that if they're not actively involved in their customers' lives, enabling them to interact with the brand at their convenience and through the devices that suit them best, they'll inevitably experience lower conversions, diminished loyalty, and a lack of engagement.

Customers are channel-free, brands should be too

Looking at the concepts of omnichannel and multichannel, it's hard not to see that they were designed purely for business purposes, disguised by lofty claims of customer-centricity, which now seem disconnected from reality.

Today, a typical shopper doesn’t wonder which channel they're using at any given moment. Their goal is simple: to make a purchase quickly, easily, and without any hassle. The truth is, consumers today are already seamlessly juggling multiple channels at the same time. When they're in brick-and-mortar stores, they're increasingly turning to technology, pulling out smartphones to research products, check online prices, or peruse reviews.

The line between mobile and desktop experiences blurs even further when shopping from home. Shoppers grab their smartphones to utilize AR or VR technology for better decision-making – for example, they visualize how a particular piece of furniture might fit in their living space before switching to desktop to finalize the purchase.

Mapping out the shopping journey per channel is a thing of the past. Nowadays, as customers engage with a brand, they seamlessly transition between different channels at different stages of the buyer’s journey – from awareness and consideration to decision-making.

So, how can retailers adapt to evolving consumer expectations and this new reality? Primarily, they must shift their mindset and acknowledge that consumers now shape their interactions with the brand. Today, success hinges on the ability to gather real-time data and utilize AI to provide immediate customer experiences online, offline and in phygital.

Artificial intelligence as an opportunity for mood retail

Our report shows that self-checkouts are a prime example of phygital for Polish consumers – 98% of respondents are familiar with this solution, and 93% have used it. This tech doesn't evoke feelings of threat or avoidance; instead, it's perceived as convenient, with respondents openly expressing a preference for stores offering self-checkouts. On the flip side, we have autonomous stores, which are viewed as too complex and stressful – nearly a quarter of Poles feel threatened by them.

From a business standpoint, both self-checkouts and autonomous stores share the common objective – to help organizations streamline the purchasing process by eliminating cashiers. However, without taking into account consumers' emotions, adopting autonomous stores can be challenging, prolonged, and its chances of success will be low.

Given that mood retail is gaining traction, it's increasingly crucial to acknowledge the pivotal role emotions play in influencing purchasing decisions. This trend highlights the importance of fostering engagement, which should happen across the entire customer journey, especially at touchpoints where buyers seek deeper interaction with the brand. For experiences to be truly immersive and enriching, they must be tailored to the user's immediate context, effectively predicting future behaviors to provide immediacy and real-time interaction on an unprecedented scale.

Achieving this technologically without artificial intelligence will be practically impossible. And I'm not just referring to large language models (LLMs) here, which predict what to say or write next, but also to large action models (LAMs), which predict what actions to take next. For these models to function effectively, they require data from sensors that gather information about people's behaviors and intentions.

Smartphones, equipped with dozens of sensors, represent just one source of such data. At the same time, they're the most “personal,” at least until other types of devices, like smart glasses, become more widespread. The paradox lies in the fact that while smartphones provide a wealth of data for artificial intelligence, AI, in turn, must enrich smartphones (or rather, the apps within them) with data and insights. It's a symbiotic cycle, akin to a well-oiled machine, driving the creation of immersive and captivating experiences.

Can I envision a future where, after a consumer touches a specific sofa in-store, the brand automatically tailors the shopping journey across channels, using sophisticated algorithms to ensure a swift conversion? Absolutely. If I couldn't, I wouldn’t be writing this article.

The takeaway

Channel-free and phygital are groundbreaking trends that empower buyers like never before. Thanks to them, consumers have the opportunity to craft their shopping experiences in real-time, and artificial intelligence will soon enable the segmentation of these experiences.

Gone are the days when businesses dictated and controlled CX. Consumers are already phygital and want to be channel-free. Retailers should swiftly grasp how to navigate this new reality and design unique experiences akin to LEGO blocks – always fitting together seamlessly, yet never restricting the needs and imaginations of consumers. Buyers should be able to choose from the offered elements and blend them in unprecedented ways, all within realms that continuously interconnect almost imperceptibly.