Since the start of the millennium, the way we engage, interact, and consume information or buy products has changed due to the advent of the internet, which has become omnipresent. Not only do consumers get to choose and compare between a lot more options, but even sellers have adapted online routes as means to reach out to more customers beyond their geographical limits.

This has allowed them to fulfil the gap in sales. However, this doesn’t mean that physical stores are no longer profitable and out of the reckoning. The future is now phygital, or a physical and digital hybrid model. This hybrid way allows sellers and retailers to enjoy the benefits of both physical and digital marketplace, and reach out to more customers and generate more sales by holding on to the customers, thereby boosting their profit margins. Brands and businesses can immensely benefit from this.

What is a phygital strategy?

In the digital era, an integrated approach can help retailers or sellers use the physical and digital world as they are interdependent. Creating a centralized repository for physical and digital transactions and using a platform that integrates inventory, sales, and customer profiles helps especially those in emerging economies.

The phygital model, which combines physical and digital experiences, emphasizes the key aspects like ease of use, speed, convenience, and support. Under this, brands and businesses go all out to promote products/services online. After trying the products virtually, customers buy them online but take the delivery from physical stores.

Phygital is mutually beneficial for both seller and end-user. It enables sellers to save on various variable expenditures while reaching out to a broader audience. It allows customers to make purchases from the comfort of their own homes.

This strategy gained prominence during the COVID-19 pandemic as lockdowns forced people to stay at home and use the digital mode to buy products. Through phygital commerce, buyers get to connect with a brand personally. Sellers are devising strategies to reward such customers with various perks such as membership cards, special events, loyalty points, and festival discounts. All this while maintaining their traditional physical sales route.

Phygital customer experience

The phygital model is helping companies in India to reach out and interact with more customers. For example, Bausch+Lomb, a leading eye-care brand on its online shopping platform to promote a virtual shopping experience, introduced features like virtual trials that allowed customers to try out lenses and frames virtually and make more informed purchases as per their choice.

BPCL, a leading oil and gas producer and seller, is running a customer-oriented digital marketing campaign under Project Anubhav to boost personalized customer experience and provide valuable insights using the AI-powered Oracle’s CX cloud.

Likewise, TATA Teleservice, a leading telecom service provider, is embracing data analytics and automation to improve marketing strategies, boost customer engagement, and maximize business performance. Similarly, HDFC Ergo and Federal Bank are also enhancing their technology-based customer interactions to digitize the entire application filing process to make payments on a real-time basis, thereby cutting down the possibility of human error and other delays.

As brands embrace this change proactively to boost their business, the future of phygital looks set for further growth as a blending of physical and digital experience boosts phygital customer experience. It prompts customers to stay loyal to the brand that elevates their experience and offers them delight.

Phygital strategies for growth of virtual shopping experience

1. Introduce buy online, pickup in-store (BOPIS)

BOPIS allows online shoppers to make purchases online without waiting in line or being forced to select products from physical store shelves. A socially distanced model, it helps businesses avoid extended shipping delays.

2. Launch pop-up stores

Businesses can set up pop-up stores online prop-up stores to showcase their products in-person to potential customers and drive online traffic to their online site. The temporary nature of pop-up shops drives ‘fear of missing out’ (FOMO) for online shoppers and incentivizes them to buy online.

For example, e-commerce eyewear brand Warby Parker expanded into 90 permanent retail storefronts after testing pop-up stores. Whether online or in physical stores, nothing beats the idea of creating buzz around a brand with pop-up stores. It also helps them meet customers in person, find new ways to expand, and receive real-time feedback from shoppers.

3. Create interactive mobile app experiences

Businesses can take the help of mobile apps as a tool to better engage customers and connect with them to promote products. Mobile apps make the shopping experience a bit more personalized and interactive by providing services such as virtual try-ons.

For example, Sephora allows its app users to virtually test their makeup shades using a VR technology called ‘VirtualArtist’. Similarly, Allbirds allows its app users to try its shoes virtually. Virtual try-ons in person make shopping more accessible to online shoppers before committing themselves to make an in-store or online buy.

4. Use augmented reality and virtual reality

In e-commerce, Augmented Reality (AR) and Virtual Reality (VR) are phygital practises that not only have large growth potential, but also have direct application to retail. From 2021 to 2024, AR, VR, and mixed reality market is set to grow by US$ 266.2 billion.

For example, Nike partnered with Hovercraft Studio in early 2021 to use AR/QR code scan technology to create Oregon’s Smith Rock State Park at its flagship New York store. This included interactive mobile activity geofencing, checklists, and digital maps. This phygital effort was created to tell a story around ACG HO20 sportswear, a new line of outdoor products of Nike for a better customer experience.

5. Implement seamless checkout processes

The focus of phygital is on boosting the virtual shopping experience and making it more fluid and seamless. This virtual shopping experience covers everything from product discovery to purchase. For example, integrating mobile apps and digital payment options facilitates quick payment options for online customers. Self-checkout devices, where shoppers visit physical stores in person but use a digital tool to check out, create an efficient interactive customer journey and contactless shopping experience.

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