Phygital Retail is the New Normal

In a world where one can buy just about anything with a click of a button, 32-year-old Anita Arora still prefers to buy from a store physically. Despite browsing through the web for product information, as well as customer reviews on online shopping websites, she does not purchase any clothes or cosmetics until she tries it on herself. Like Arora, millions of buyers across the world make purchase decisions based on a combination of online, mobile and in-store interactions between a brand and a consumer.

Hence, the blend of physical and digital, phygital retail is gaining popularity across the industry as it combines the immersiveness and interaction of the physical world with the speed and convenience of the digital world.

For instance, many brands are offering an enticing shopping experience to their customers by showing consumers how to use a product or letting them try it in their stores. If they enjoy the experience, then they can order the product online. Likewise, some brands are enabling you to purchase a product online, but collect it from a physical store so that you can enjoy the experience and avoid the waiting time for the delivery.

Weaving phygital for the world

From self-checkout counters to virtually trying on an outfit before purchasing, phygital retail is offering the best of both the physical and digital world. And with the help of AI and Cloud computing, brands are now armed with data like customer behaviour, buying patterns and market trends that open new doors of opportunities to explore.

Retailers are gearing up for the technology-driven future to offer their customers relevant, personalised and engaging shopping experience to build brand loyalty and drive sales. According to a survey conducted recently, 75% of retailers will be able to know when specific customers are in store to help them customise the store visit for them.

It is a no-brainer that phygital is a boon for both shoppers, as well as, retailers. While it makes the shopping experience delightful and personalised for the customers, it creates valuable untapped customer data for the retailers. So before we go further, let us quickly glance at some of the most popular phygital technologies used today :

• Cashier-less shopping : Imagine walking inside the store, picking up the product and walking out? What was unimaginable before, is now a possibility. Amazon’s cashier-less supermarket experience called Amazon Go has opened new avenues of phygital retail. A shopper enters the store and scans his phone. The in-store technology detects what the shopper has picked up and put in his bag. It then charges the money from the shopper’s device as he is about to leave, eliminating the need to stand in long queues. Another interesting trend we are seeing is that many fashion and furniture stores have started using phygital displays for customers’ convenience. It enables them to keep a low stock on display with the rest of them available for browsing on an onscreen catalogue.
• Locations-based push notifications : With more and more retailers using bluetooth beacon technology, tracking consumer’s location vis-à-vis their stores has become very easy. So, if a consumer has just crossed your outlet, a Bluetooth beacon would recognise that they are close by, allowing you to send them personalised promotional messages. They can also send notifications about new menu items or discounts that they can avail on their mobiles. So, now you can send target notifications to your consumers based on their geographical locations
• Augmented Reality : When it comes to marketing, AR allows brands to engage their customers and offer an immersive digital experience to drive sales. One of the finest examples of AR is how Pokémon Go had millions of consumers walking with phones on the street to look for a Pokémon and stay engaged in the game. Another example is how fashion brand ASOS used AR to enable a virtual catwalk, which allows its app users to visualise 100 ASOS designs virtually by just a click of a button.
• Live chats and personalised ads : Other phygital methods like the personalisation of ads to suit your preference or options of live chats on the website to solve your entire product or service related queries have also led to an increase in sales. For example, Amazon uses Machine Learning to track user data, and then uses it to inform and personalise adverts based on their preferences. In fact, 55% of the sales in Amazon are driven by personalisation of recommended products.

Now, let us talk about phygital marketing which is basically, omnichannel marketing, which means all the channels of marketing work together to give a delightful and personalised shopping experience. A perfect example is when you walk into a store to browse, and you get a QR code to provide you with the access to a discount.

Explore an immersive shopping experience

The rate at which we experience technological upgradation and competitiveness,, retailers have to offer an immersive shopping experience that appeals to their consumers’ senses and captures their interest. Let us examine some examples based on our understanding of sight, smell and sound :

• Sight : Imagine walking to a store and virtually being transported to London. That is what British fashion wear Hunter’s flagship store in Japan is doing by appealing to the visual and auditory senses. It is using huge digital displays and soundscapes to engage their customers. As the store’s ceiling consists of a digital light box to replicate a cloudy day in London, the shopper is virtually transported to London so that they get the feel while purchasing boots or umbrellas.
• Smell : With retailers relying on “smell marketing,” brands can evoke some emotions that customers associate with fragrance. For example, Nike has started adding florid fragrance in its stores to attract shoppers. Similarly, a gas station in California did a test for six months where a scent machine would release coffee aromas at the same time the digital screen was running an advertisement for fresh coffee, which led to a 300% jump in their coffee sale.
• Sound : You must have noticed that when you walk inside a spa or a store selling night lamps, there is a piece of calm and soothing music being played. Similarly, enter a fitness equipment store and feel your feet tapping to upbeat electric music. These are all examples of how retailers are using sound to set the mood, complementing the products and their brand image.

The future of phygital retail :

When phygital marketing took over the retail industry in 2018, no one had expected that a global pandemic will strike the world two years later and will change the way how we live, work or shop. Now, meetings are conducted on Zoom; shopping is mostly done online and socialising happens by phone or video chats. Hence, it is valid to question the relevance of phygital retail during and after the COVID-19 era. With no vaccination or cure for COVID yet, people are still uneasy about going to a store and have physical engagement with a brand. So, does that mean that we will have to rely on digital and social media to engage with customers? With the absence of physical and human interaction, will even the best of VR, AR or Machine Learning marketing work? What about people like Miss Arora who still would like to visit the store and experience the product first hand before buying?

Hence, physical engagement has to be quick, safe and comfortable, and digital engagement needs to be immersive and also provide insights into your business. Despite the disruption caused by COVID, phygital is still relevant as it gives useful customer insights, a much-needed relief during these stressful and testing times.

We, at Intellect Commerce, can help you to derive the most out of phygital to give your shoppers a memorable shopping experience. For more information, request for a free demo of iRetail software with our retail specialists.