In an age marked by blurring difference between Physical and Digital worlds, Phygital Experiences are leading the way in enhancing the brand experience. Phygitalization is particularly revolutionizing retail customer experience. We’ll take a closer look at what phygital retail is, the benefits of it, and examples of retailers excelling at this multi-channel sales and marketing strategy in this article.
Ages ago, retail and e-commerce were at each other’s neck, and their rivalry was the best thing since it enabled Innovation. As the days went by, especially with the increasing change in customer behavior, these two nemeses started to work in synergy. Meanwhile, Research Online-Purchase Offline (ROPO) has become a common shopping pattern as customers invest more time exploring products online, before buying. Retailers are using Phygital Strategy to crack the ROPO behavior – by delivering an excellent brand experience digitally and physically.
Sources: Think with Google, Forbes & EY
How Phygital Retailing Strategy is Changing Customer Experience
The Phygital Retail model merges two different worlds; Physical for trust, reliability, and human connection and Digital for data collection and analysis (for better insights), making it a powerful approach. It has the power to change the 360-degree view of the current Customer Experience landscape. It brings a complete transformation in Physical and Front-end Business.
Source: Deloitte Analysis
Re-Inventing the Buying Experience
Today, enabling buying experience is critical for success, but POSs have never been more complicated with multiple physical stores, online stores, websites, adhering to different country regulations, mobile applications, payment gateways, and delivery models. This results in multiple buying journeys and behaviors. The Phygital model helps in re-inventing buying experience for all buyers. Here are few ways how retailers can optimize the new buying experience:
- Optimizing the online inventory data and show if products are available for curbside pickup
- Inserting QR codes in advertisements to direct customers to the online application or website.
- Self-service kiosks in stores to pay and checkout
- In-store robots to help customers find the right product speeding the shopping
- Using Augmented Reality (AR) and Virtual Reality (VR) technologies to let customers experience new products before launch and seek their feedback
- Digital showrooming at home to explore the products first and then decide about visiting the store
Positive Buying Influences
With the rise of multiple channels and buying journeys, it is necessary for marketing to catch up with the customers. Fortunately, the new model allows marketers to create numerous opportunities from offline and online modes and develop personalized campaigns for customers.
While CRM and automation have long been key enablers for marketing teams to address personalization challenges, there are still concerns around it. We all are customers and had disappointing moments with brands like websites not working or expired coupon codes. The Phygital retailing model help retailers to personalize buyer journey more appropriately without any glitches.
Such a model collects information from various data points starting from customer footfall, their online behavior, past purchases to stages of buying lifecycle. For example, with unified retail customer login, it is easy to track customer's past purchases and additional information. Marketers can segment customers based on various factors and run campaigns to create positive buying influence, contributing to the bottom line. Here are few ways how the Phygital retailing model helps marketing in influencing buying behavior:
Location-based push notifications can keep customers aware of ongoing sales or discounts when they are around the store.
An example would be Apple's iBeacon – A device that emits Bluetooth signals which are detected by nearby devices. You can deploy this device with your app for proximity detection for sending out new offers when customers are near your shop or even in a particular section of your shop.
- A personalized campaign targeting both online and offline forums for customers.
- Online stores optimization for QR-code scanning, correct links for landing pages, coupons, and rewards for making payments, online gift cards, and membership cards can keep the customers engaged.
Powering the New Shopping Behaviour
Recent years have witnessed finance, health, and safety as top factors driving customer's buying behavior.
Customers have become more mindful and curious about their buying, and trends like Recommerce, AR and VR, AI-Focus, Direct-to-Consumer, Voice Commerce, Hygienic Shopping Experience, or Contact-less Physical Experience are the new norms.
Example: Amazon GO
Amazon came up with a cashier-free store strategy that uses AI, deep learning, and sensor fusion for its functioning. Once the customer scans their QR code at the store entry, any item picked would be added to the virtual basket, and the charge gets auto deducted from the customer's account. It indicates customers are interested in fast services.
The 3Is of Phygital Retail Strategy
Based on the customer buying journey and interactions, the Phygital strategy focuses on 3Is – Immediacy, Immersion, and Interaction.
Implies being available for the customer regardless of the channel.
Implies the complete involvement of consumers throughout the buying experience.
Involves creating a humanizing experience even in the digital space, so buyers feel connected with the brand.
The 3Is help you in creating an engaging ecosystem so the experience is similar no matter what channel your end customer uses to interact with your brand.
Phygital Technologies that are trasforming Retail Sector
The global retail assets continue to expand with multiple touchpoints, funnels, and journeys. Staying on top of every metric to provide a superior customer experience is a massive challenge. But overcoming this challenge is critical for Phygital retailing model. Phygital Technologies play a significant role in implementing such a model hence investment in them would assist in meeting customers’ demand and improving customers’ experience.
A smart store is a function of various technologies like AI, ML, Automation, Big Data, Augmented, and Virtual Reality.
Technologies that go inside smart stores:
In-store AutomationUsing Automation, retailers can create a seamless experience for customers. They can help with choosing products based on the last purchase to the touchless payment process among other possibilities.
Virtual Personal AssistantsAutomation, Big Data, and Robotics together can achieve this feature. Virtual assistants can help customers making the right choice based on their brand preferences, shopping budgets, credit card offers, and loyalty benefits.
Smart Trial RoomBuild a touchless trial experience to shorten the ‘Try and Buy’ time using the mobile app or smart trial room.
Smart Inventory Management
Using AI and ML, retailers can manage their inventory smartly by pushing the expiring product on offers, discounts to avoid wastages.
Customers love when they are recognized or remembered for their past purchases. Implementing a Facial Recognition system can help in providing an unparalleled customer experience by reducing the queues, develop a sense of belongingness, and enhance loyalty towards brands.
Building a Phygital Retail Strategy
Based on Qentelli’s experience of working with multiple retail giants and handling their engineering transformation, we suggest the following steps to achieve Phygital transformation:
Start with a Shared Phygital Retail Vision and Strategy for the Organization
Present future vision and strategy to the management and decision-makers. Prepare a clear digital plan that is aligned with your organization’s Business objectives. If you are starting from scratch, then first understand how you would want to leverage Phygital Retail Strategy– below are few pointers:
- Optimizing Website and Mobile applications
- Installing Self-Service kiosks or implementing Click and Collect
- Implementing AR and VR technologies
- Hyper-Personalized Marketing
If you are already digitalized but feel like you need to go one step further, discuss it with your team, understand the requirements and estimate your ROI before further investment. Compare the chosen Phygital model with the industry standards.
Build or Buy Decision
Scoping the ‘Build or Buy’ decision involves few equations. The ratio of investing time, money, and resources should equate to the desired ROI. Another equation is balancing the long-term software development and operations while sustaining them (maintaining upgrades, managing integrations, hiring the right talent, and evaluating vendors). Once you have cut-and-dried answers for this, choose the right Retail Digital Transformation Partner.
We advise our customers to buy Systems of Records and build Systems of Engagements. Since Phygitalization is about tailoring Customer Experience, make sure to know the in and out of the technology supporting it. With our Retail Analytics, Automation, and Next-Generation technologies, we can help you build an immersive, personalized, and responsive retail environment.
Select the Right Digital Transformation Partner
Work with the right partner in identifying the right model (onshore, offshore, nearshore and a mixture) to help you with - strategic planning, outlining the vision, building MVP, product-fitment, scaling the product, and continuously iterate based on the customers’ feedback. At Qentelli, we set up dedicated teams to work with our clients using Agile and DevOps practices to build Phygital retail solutions that are human-centered, empathetic, and mimic the real-world experience.
Qentelli’s Capabilities to Support Phygital Transformation
Qentelli’s retail digital transformation practitioners take a streamlined approach of combining people, processes, tools, and assets to create the best suited Phygital model. Our capabilities in Cloud, DevOps + DevSecOps, Quality Engineering, Automation, and Next-Generation technologies place us well-ahead in leading the Phygital transformation.
Qentelli AWS Practice
Qentelli is AWS Select Technology Partner and enables organizations on competencies in Cloud-native Software Development, Legacy Modernization and Migration. We can help you in the adoption of cloud solutions and services to develop the Phygital retail model.
Qentelli SAP Practice
With our deep expertise in SAP S/4 HANA solutions, we are uniquely positioned to implement and test retail SAP solutions.
Application Modernization and Development
Qentelli offers an agile approach to application modernization and development by assessing the current technology stack and architecture, infrastructure, sourcing, and processes, to come up with the right roadmap while identifying cost-saving opportunities. Our expertise in Agile Practices, DevOps and DevSecOps improve software development multi-fold while driving the right Culture Change.
Qentelli brings innovation to every customer engagement by providing extensive consulting and strategy in Next-Generation technologies. That places our clients few years ahead in their Digital Transformation journey while revamping their old model and investing in new technologies, at the same time.
The retail landscape is evolving, and its digital strategies are always changing to address next-level customer connectivity. But both Physical and Digital retails are here to stay: Now it’s time to dig into Phygital Retail – the new powerhouse of experiences.
Through a combination of Customer Experience technologies, Big Data, and Agile Delivery, practices, our team can deliver an outstanding Phygital experience to your customers – without missing a beat. Qentelli acts as a strategic partner for global retailers to provide an end-to-end digital, innovative, and unique Phygital retail solutions to our clients. Have a Phygital Experience Design idea in mind? Feel free to drop us your query at email@example.com