VISTAS 2023 - Drive the Momentum - October 18-20, Caesars Palace, Las Vegas - Learn More
phygital retail approach
A Phine Line Between Physical And Digital
by: Chris Wiesen | April 6, 2022

Are you taking a phygital approach for a better retail experience?

Modern retail shopping can trace its roots back to ~800 BC in ancient Greece when the first merchants gathered to sell their products in the town square. Bartering took place and local currencies were exchanged as early entrepreneurs sought to make a better life for their customers and themselves.

Fast forward to 2022 and surprisingly, many of the objectives remain the same. The tools and techniques are different, but entrepreneurs are still trying to create value for their customers and do so at a profit for themselves.

Convergence of online and offline worlds

Today, it is more important than ever to stand out from your competition by creating better experiences and value. Phygital may help you do just that. By blending physical with digital experiences, assessing customer behavior and conducting an ongoing review of data, you can create effective and more compelling outcomes. A phygital approach to retail takes omnichannel to the next level – the result is a more personalized and engaging experience.

According to the NRF (National Retail Federation), 97% of consumers have not completed a purchase because it was inconvenient to do so.

In China, this concept has exploded. Retail stores are using a combination of AI and facial recognition to give shoppers ultra-personalized offers and the ability to pay without taking out their wallets, removing any inkling of inconvenience or redundancies.

What 5 elements of a phygital approach should retailers consider?

  1. Omnichannel: roles, responsibilities and processes in place
  2. Consumer psychology: consider placement of browsing screens and align with the likelihood that individuals will select (product) from the right
  3. Combined revenue recognition: budgets should be set on a cross-channel basis
  4. Compromise: optimize across retail and digital channels
  5. Journey not a destination: phygital is a strategy requiring constant evaluation

    Source: Forbes

3 phascinating approaches:

1. AR haircuts + QR codes
Amazon is trialing a brick-and-mortar experiment with a hair salon in the UK where an AR app allows customers to see different hair styles and colors on them before they choose one. In addition, with “point-and-learn” technology, customers simply point at products on shelf they are interested in and learn more about them. Using QR codes, they can purchase the products that will ship to their homes so that they are not carrying them around while shopping.

2. Hyper-personalized messaging
As a retailer you seek to know your customers so you can anticipate their needs and delight them with exceptional products and services at fair prices. Phygital retail strategies will attempt to leverage your customer’s personal data and align it with your physical and digital capabilities to serve them better than your competitors.

According to Forbes, knowing how to create an in-store experience by utilizing algorithms, social commerce and WeChat to personalize and drive the experiences is what many brands in China offer customers. Examples include personalized fragrance recommendations, pre-booked fitting rooms and reserved tables at the in-store café to entice people back into the stores.

3. Mobile use in-store
Consumers start reviewing products online. When in-store, mobile devices are used for additional research. Combined, these represent a phygital opportunity for you to showcase your unique capabilities and value proposition.

Mainstream AR and VR can offer enhanced convenience and personalized experiences. When shopping for new clothes, why try on 20 garments when a Smart Mirror can be used to select favorites. See what home furnishings will look like BEFORE purchasing them. AI can analyze the physical characteristics of someone’s face before making specific eyeglass frame recommendations.

Next level omnichannel

Phygital seeks to extend the omnichannel user experience with technology to further excite and delight the consumer. As a general guideline, keep your focus on innovation and simplicity and don’t be afraid to think outside the box. Encourage customers to personalize their interactions with you. Empower your employees with extensive training and proper incentives.

Learn more about the phygital experience your customers are looking for and why it matters.

View Infographic