In this article, we will take a closer look at what phygital retail is, its benefits, and examples of retailers who excel in this multi-channel sales and marketing strategy.
What is Phygital Retail?
According to the GWI report, more than half of consumers in North America search for a product online before purchasing it. According to the 2021 Consumer Behavior Report, many people still prefer shopping in person. In fact, nearly half of consumers said that if given the choice, they would prefer to shop in person rather than purchase online. What does this mean for retail businesses?
Integrating your physical store with your online store is more important than ever, and phygital retail is a way to achieve that. The best components of e-commerce and physical business models are combined to enhance customer experience and increase sales revenue. For example, you might have a retail store and an online store selling 25 products monthly in person and 200 products online during the same period. You might think that your physical store is not performing well, but a portion of your online sales could actually come from customers who visited your store first and then completed their purchase online. By creating a multi-channel shopping experience, you can continue to engage with those customers online and in person to increase repeat sales.
Elements of Phygital Retail
A successful phygital retail experience involves convenience, speed, and engagement. It relies on blending three key elements which are immersion, immediacy, and interaction. Let’s take a look at these concepts:
– Immersion involves making the customer part of the experience.
– Immediacy means shoppers receive the right message at the right time and can choose how to fulfill their order based on how quickly they want it.
– Interaction allows customers to touch, feel, and engage with your products.
Phygital Retail Strategies
Like multi-channel retail, phygital retail allows consumers to choose how to discover products and purchase them through their preferred shopping channel. Whether online, in-store, through social media, or at a temporary store for a limited time, coordinating all these approaches is part of creating a phygital retail strategy.
Phygital Retail Strategies
Let’s take a look at some strategies here:
1. Let Customers Choose How They Buy
Allowing customers to purchase products online and pick them up in-store (BOPIS), also known as click-and-collect, enables customers to shop through your e-commerce site and then pick up their order at the store or at a designated pickup point. This reduces shipping costs for both you and your customers and can also lead to increased sales if people buy additional items while picking up their order from your retail store.
2. Provide Self-Checkout or No Checkout Options
Self-checkout technology is a great way to normalize the checkout process in-store so that customers can pay at their convenience. You can do this by placing self-service payment devices throughout the store to reduce queues at the cashier.
3. Experiment with Augmented Reality and Virtual Reality Apps
Augmented reality and virtual reality technologies blend digital and physical elements. Retailers use augmented reality technology to let customers digitally try on clothing while they are in the store, and virtual reality technology is a great way to draw customers in digitally to an experience where they can discover your brand and products.
4.
Use Infinite Aisles to Keep Up with Supply and Demand
Buying products in-store and shipping them home, also known as infinite aisles, is an order fulfillment option that allows customers to shop and purchase products in-store and have the order shipped to their home or any preferred location.
5. Send Local Notifications
Local push notifications help build relationships before, during, and after the sale. This strategy can be used to inform individuals within a certain distance when new products arrive in-store or to follow up with them after purchase to gather reviews, enhance customer engagement, and retain them.
6. Use Social Media to Create a Digital Store
Social media platforms like Instagram, Facebook, and TikTok make it possible to add a digital presence for your brick-and-mortar business. You can even use the e-commerce features available on Facebook and Instagram to implement a social commerce strategy and sell directly through social media.
Benefits of Digital and Physical Retail
Developing a digital and physical retail strategy offers numerous benefits for you and your customers. Here, we will explore some common advantages:
Enhancing Customer Experience
Simplifying the in-store and online shopping experience makes the buying journey easier for customers, making it more convenient for them to interact with your business across different channels and at any time. With digital and physical retail, customers can choose their preferred ways to shop, pay, and fulfill their orders. More flexibility leads to improved customer experience, increased sales, and enhanced brand loyalty.
Building Brand Awareness and Trust
Connecting with customers online and in-person allows them to interact with your business at various touchpoints, whether digitally or face-to-face. By giving shoppers the option to visit your retail store, they can engage with you in person and interact with your products before purchasing. This helps increase brand awareness and trust in your business.
Providing Personal Recommendations and Increasing Sales
Personalized service and product recommendations are one of the notable benefits of digital and physical retail — achieved through the use of commerce solutions like Shopify POS, which easily integrates with your online store and synchronizes shoppers’ purchase records in-store and online with their customer profiles. This enables store staff to gain a comprehensive view of what the shopper loves, allowing them to recommend suitable products, foster stronger connections, and convert more interactions into sales. McKinsey reports suggest that personalization drives up to 15% of revenue growth and improves marketing spending efficiency by as much as 30%.
Increasing Brand Loyalty
Increasing brand awareness, improving customer experience, and personalized marketing strategies will naturally boost brand loyalty. Customers who feel seen and understood are more likely to make repeat purchases. Additionally, if people have more flexibility in choosing how to shop and can achieve instant satisfaction, they are more likely to stay and remain loyal to your brand.
Preventing Stockouts
When using the same platform to manage your online and physical stores, one of the benefits is unified inventory levels and accurate reporting, which helps prevent the alarming occurrence of stockouts. With Shopify, you can see the product or variant quantity you have in stock at both your store locations and your warehouse. This functionality helps merchants identify low stock items and reorder before inventory levels reach zero.
Examples of Digital and Physical Retail
Whether you started your retail business online or in physical stores, integrating your physical and digital store is a sales and marketing strategy here to stay. Here are some examples of retailers who are trying and succeeding in digital and physical retail:
Application
Allbirds for Customizable Experiences
Sustainable shoe brand Allbirds launched the Allbirds app in September 2020. With this strategy for digital and physical retail, customers can download the iOS app and build their own customizable experiences. App users can also try on shoes virtually, choose where to apply carbon offset from purchases, and receive notifications about app-exclusive products.
Chanel Smart Mirrors with Augmented Reality in Fitting Rooms
The luxury brand Chanel partnered with FarFetch to install smart mirrors with augmented reality technology in the fitting rooms of its flagship stores. Shoppers use an app to select from a range of products, then they book an appointment to try them on. Upon the customer’s arrival, the selected pieces are brought to them, and they can use a high-tech mirror to magnify product details. This creates a seamless shopping journey that combines in-store shopping with a high-tech personal shopping experience.
Gucci Interactive Displays
For the brand Gucci, which was founded in the 1920s, it does a great job of keeping up with changes in consumer behavior and adapting its digital strategy to appeal to Millennials. The brand uses innovative social media campaigns to grab the attention of Millennials and was one of the first to design interactive screens in-store that allow customers to browse, retrieve, and pause content using hand gestures.
Lush’s Digital Stores
Lush is a cosmetics brand known for its cruelty-free products, bath bombs, and retail stores bustling with goods on wooden shelves. Its loyal customers also enjoyed the product testing experience in basins at various locations in the store. However, the brand is shifting towards digital retail. Testing basins have been replaced with transparent shelves that create an exhibition experience for the colorful bath bombs. Now customers can use the #LushLabs app to view the Lush Lens on bath bombs. An immersive video appears on the smartphone screen demonstrating how to use them, alongside a list of ingredients and benefits. Additionally, this digital strategy eliminates the need for packaging, making it an environmentally friendly alternative in the cosmetics industry.
Warby Parker’s Virtual Try-On Feature
Warby Parker’s digital glasses experience, which relies heavily on digital eyewear, tested the digital business model in 2013 when it opened its first store. Now the brand offers a digital retail experience by helping shoppers try on glasses virtually before visiting the store. Customers can also use the virtual try-on feature to buy their glasses directly online. The app goes beyond just placing glasses on your face. Using augmented reality and facial tracking technology, the glasses are presented in a live 3D preview on your face, giving you a realistic image of how you look when wearing the glasses.
Touchscreens for Rebecca Minkoff
In 2014, designer Rebecca Minkoff opened two stores featuring large screens through which shoppers can browse products or request specific sizes to try on. When a fitting room becomes available, the customer receives a text message. Inside the fitting room, there is a mirror that also functions as a touchscreen so that customers can request more items or assistance.
Customized Nike Experiences
Over 140 million NikePlus members use one account to access all of Nike’s customizable services online and in-store. This vast amount of data can be utilized by Nike to create unique customer experiences. Thus, in 2018, the brand experimented with digital and physical retail using customer information to create a personalized experience for local shoppers in New York and Los Angeles. In its live store in Los Angeles, the product changes every two weeks to adapt to local trends, and shoppers are able to customize products. This personalized strategy allows Nike to make its customers feel special and is an ideal strategy for attracting and retaining local customers.
Getting Started
In Digital and Physical Retail
No matter the size of your business, you can start taking small steps today to create a digital and physical retail experience. The first strong step in digital and physical retail is using the same platform to manage your online and physical stores. This can lead to more opportunities for personalization and create a cohesive brand experience for shoppers, enhancing long-term loyalty and increasing engagement in-store and online.
Try Shopify POS
Everyone has to start somewhere! Warby Parker uses Shopify to run its online and physical stores and has grown with us since its inception. The merchant has implemented some of the digital and physical retail strategies we mentioned in this article, helping it become a highly successful brand.
Sell Online and In-Store with Shopify
Shopify POS is the easiest way to unify sales and data across e-commerce and brick-and-mortar. Get all the tools you need to manage inventory, track performance, understand customers, and sell everywhere in one easy-to-understand dashboard.
Frequently Asked Questions About Digital and Physical Retail
What does digital and physical retail mean?
Digital and physical retail is a term used to describe the convergence of the physical and digital worlds.
What does channel-less retail or digital and physical retail mean?
Channel-less retail or digital and physical retail refers to a type of retail where physical and digital channels are integrated to provide a seamless customer experience. This type of retail is becoming increasingly popular as more consumers shop online and through mobile devices. Channel-less retail allows businesses to offer a consistent customer experience regardless of how they shop.
What are digital and physical products?
Digital and physical products are products that have a physical presence but also have a digital presence.
What is digital and physical commerce?
Digital and physical commerce is the combination of physical and digital channels to create a seamless shopping experience for customers. This can include things like digital promotions in-store, tracking online orders, and mobile apps that allow customers to shop online and pick up in-store.
Source: https://www.shopify.com/retail/phygital-retail
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