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The Future of Retail: Pioneering the Phygital Shopping Experience

AI concept
'Phygital' retailing enhances the shopping experience.

The retail world is no longer segregated when it comes to strategy. 

The physical shopping experience is becoming increasingly more digital, and the digital shopping experience is translating into real-world, in-store engagement more than ever before. This new “phygital” frontier is now table stakes for many retailers, and adopting a successful phygital strategy can pay major dividends in everything from customer satisfaction and loyalty to increased sales and decreased returns.

As we move into the holiday season, retailers are given the biggest opportunity to dazzle and delight customers through phygital shopping experiences that can translate to future sales long after the tinsel is taken off the tree.

What Phygital Retail Means for Customer Experience

Phygital retail is all about augmenting and enhancing the traditional shopping experience with digital technology, and creating connections from online shopping to in-store activations in a way that showcases a brand’s commitment to customer convenience and personalization. Let's take a closer look at some of the benefits of phygital retail:

Personalized Shopping Experiences

One of the primary advantages of phygital retail is the ability to offer highly personalized shopping experiences. AI shopping assistants, powered by machine learning algorithms and customer data, can provide customers with tailored product recommendations based on a customer’s past interactions with a brand. For instance, if a customer is shopping for new clothes, an AI assistant can suggest outfits based on their previous purchases, style preferences, and even the latest fashion trends. 

Additionally, these AI assistants can enhance the in-store experience by reserving selected items for customers, allowing them to try on and experience the products in a physical retail setting, seamlessly integrating online insights with in-store personalization.

Through AI-enabled personalization, every customer—especially those that have dedicated online accounts with a retailer—can be offered the white-glove, consultative shopping experience typically reserved for customers at luxury retailers, right from the comfort of their own homes. By bridging the digital and physical realms, brands can ensure that customers feel seen and valued, leading to increased customer satisfaction and loyalty.

Visual Configurators for Informed Decision-Making

Visual configurators are a powerful tool in the phygital retail arsenal. These interactive tools utilize augmented reality (AR) technology to enable customers to visualize how a product will fit into their lives. Consider a furniture retailer that offers a visual configurator for designing custom furniture pieces. 

Customers can see how a new sofa or dining table would look in their living room, allowing them to make informed decisions on size, color, and fit. This not only reduces the risk of post-purchase dissatisfaction and returns but also creates a memorable and engaging shopping experience that customers are likely to share with friends and family.

Immersive In-Store Experiences

With the integration of AR and virtual reality (VR) technologies, phygital retail can transform the in-store experience. Brands can provide customers with virtual try-on experiences for clothing, cosmetics, and beyond. 

For example, cosmetic brands are leveraging AR to allow customers to virtually test different makeup products and shades using their phone or computer camera. This not only makes shopping more fun and interactive but also minimizes the need for physical samples and testers, a welcome change in the post-pandemic world.

Enhanced Convenience

Phygital retail blurs the lines between online and offline shopping. Customers can browse online, add items to their digital cart, and then seamlessly transition to a physical store for a tactile experience or to complete their purchase. Studies show that a majority of customers, as much as 84%, who purchase in-store do prior product research online (and vice versa). 

This omnichannel approach offers shoppers the convenience of choice, and the flexibility to interact with brands in ways that suit their preferences. Additionally, as buy online, pick-up in store services have increased since the start of the pandemic, brands already have the infrastructure and capacity to provide convenient omnichannel experiences for their customers.

Interactive Product Information

Consumers today seek more than just a product; they want a story. Phygital retail enables brands to share product narratives through interactive displays, QR codes, and AR-powered content. For example, wine enthusiasts can scan a QR code on a bottle to learn about the vineyard, grape variety, and food pairing recommendations. This interactive element adds value to the product and engages customers on a deeper level.

How to Bridge the Digital and Physical Realms

To create integrated and immersive shopping experiences for the modern consumer, it's crucial for brands to not only bridge the digital and physical realms, but do it in a frictionless way. This requires a multi-faceted approach that includes:

Data Integration

To offer personalized shopping experiences, brands need to harness customer data effectively. This means integrating data from both online and offline touchpoints to build a comprehensive customer profile. With the right data insights, brands can deliver tailored offers, recommendations, and experiences that resonate with individual customers.

But data integration isn’t limited to what the customer offers the brand in order to provide more personalized experiences; it also means the brand is giving customers clear, accurate product information. Having accurate, compelling product information allows customers to choose and buy the right products, leading to loyalty, satisfaction, and a decrease in returns.

Seamless Checkout

A frictionless shopping experience is vital in the phygital world. This involves ensuring that customers can easily transition from online to in-store and back, with minimal disruptions. Mobile payment solutions, online-to-in-store inventory visibility, and hybrid purchase options like buy online, pick-up in store are all part of the puzzle.

Consistent Branding

The fusion of digital and physical retail should present a unified brand image. Whether a customer interacts with a brand online, in-store, or through a mobile app, the branding, messaging, and overall experience should remain consistent. This builds trust and familiarity, encouraging repeat business.

What Brands Stand to Gain From a Phygital-First Strategy

Mastering the phygital shopping experience is a must for brands going forward. Customers have a complex set of needs and wants; some are more inclined to shop online, while others still prefer the traditional in-store experience. By focusing on a phygital-first strategy, brands are able to remain flexible to the evolving needs of the customer.

The holidays are a great time to showcase this blending of the physical and digital shopping experiences. The seeds planted during this crucial shopping season can lead to a host of benefits for a brand that will extend throughout the year.

When phygital retail is executed successfully, brands make an impression on a customer that translates to high customer satisfaction, repeat purchases and long-term loyalty. This loyalty benefits both brand and consumer; by engaging in repeat purchases, brands are able to better tailor personalized experiences towards the customer well into the future. What’s more, a focus on accuracy in product information translates to satisfied customers and a decrease in returns which bolsters the bottom line.

The phygital shopping experience isn’t just a nice-to-have anymore. Customers expect a seamless experience, and the brands that offer it will reap the benefits now and going forward. You could say it’s the gift that keeps on giving.

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