More Than a Buzzword: Retailers are Going “Phygital” with Their Marketing Strategies

It can also be said that it’s a watershed moment for the globe, and there is no magic stick or playbook for any business to overcome the challenges the outbreak has brought with it. The pandemic has transformed the way the world behaves. From less demand to digital ordering to adopting a “contactless” approach, much more is happening in the business world. 

On the one hand, people are going towards digital shopping, while on the other hand, it has led to a renovation of the physical experience. The amalgamation of these two terms has the impetus to the “phygital” approach. Here we have taken a real-life example that helps you understand this approach better. 

How many times have you gone to a mall or store to see and touch a product and return empty-handed to buy it online at a discounted price? Now, let’s flip a coin; how many times have you read dozens of reviews and asked your friends before making a purchase from a physical store? Yes, both situations are real, and here you will easily come to know why the phygital approach has become a new frontier in the customer journey. 

We are witnessing a drastic change in practices with the rise of e-commerce, and we recognize a need to complement physical stores with the new virtual realms of e-commerce and digital technology. And this is what stands for “phygital,” a portmanteau of two unique terms, “physical” and “digital.” 

This post will see how “phygital” will be a game-changer for the marketing landscape and how retailers should consider it to engage with their customers effectively to keep their business afloat. 

To put simply,

Going phygital means combining online and offline strategies to create a seamless user experience using both approaches. 

In a recent 2020 study, more than 72% of netizens shop online, and around 52% of buyers purchase products from offline stores. Now delivering top-notch customer experience to both kinds of buyers is a brand’s duty. 

The term suggests, going phygital is all about filling the gap between online and offline. It is an emerging way of experiencing shopping across the boundaries of the two different environments. Therefore, marketers united those words in order to offer a complete and excellent customer experience. 

Imagine a real-life situation.

After a tiring and hectic day, you are waiting for the bus at your workstation, and for dinner, you have zero energy to visit a grocery shop or restaurant. What will you do? Luckily, there is a kiosk on the platform, all you need to scan the barcodes and order food; you will get it at your doorstep when you reach home. 

Let’s take another real example; you are sitting at your favorite restaurant. Instead of waiting for the manager to note your order, an AI-based touch screen kiosk helps you place the order based on your preferences and use facial recognition to complete the checkout process and charge your account. 

Yes, this is called the phygital phenomenon, where all tasks are made possible by advanced technologies such as AI, AR/VR, etc. Before three years ago, Amazon was the first that launched its physical store named “Walk Out Shopping,” where customers need to pick the item and walk out. A billed amount will be charged from your Amazon account, and you will get a receipt through mail. 

As the twisty, wild state of lockdown and isolation sets in, our digital and physical selves meld in new, surprising ways, making phygital the buzzword of the year. In addition to that, consumers these days are both physical and digital. They like to interact with the product in real life and also want to enjoy the hassle-free shopping experience that online stores provide. 

And the adoption of this phenomenon allows retailers to provide consumers a phygital customer experience where advanced technologies interact with the real world. 

Phygital retail is beneficial to both consumers and retailers. Customers here can enjoy an enhanced shopping experience while having access to unexploited customer data presents retailers with enormous opportunities to expand their business.

The world is heading towards digitization; from food ordering to grocery to digital payments, customers today have plenty of apps installed on their smartphones. Even before the pandemic, the doorstep delivery business was growing, but today you can see where it stands. 

More and more entrepreneurs are modifying their existing business models to stay one step ahead in the fiercely competitive market. And going phygital is the only robust way. Take an example of the restaurant industry which was hit hard by the pandemic but adopting a phygital approach helps them to survive. Consequently, restaurants leverage E-Delivery solutions to fulfill online orders while operating dine-in with fewer capacities.  No doubt, small and medium scale businesses can’t go digital overnight as they lack budget and skills, but here we have come up with some suggestions that allow them to go phygital without making huge investments. 

If you want to thrive in today’s business world, overlooking social media platforms can cost you more. Facebook, Instagram, Twitter, etc. are powerful social media platforms to offer discounts to the users who show interest in your content. Retailers can also invite interested customers to subscribe to their channel or tag their brand on their page to get an amazing deal in return. It builds trust among customers and enables brands to interact with customers in a personalized way. 

As we have seen earlier, embracing digital transformation is much easier for small and medium scale businesses too. Tools like social media, emails, chatbots, etc. make it easy for brands to assist customers whenever they want. Popular CMS platforms like Shopify and WooCommerce also integrate email and SMS marketing tools that allow brands to create an integrated eCommerce. 

To date, around 63% of purchases take place online, but 49% of customers still prefer to buy products from physical retail stores. This figure clearly reflects how physical interaction is a key element for customers. 

As seen earlier, a successful phygital experience is one that blends the three “I”s 

The first two terms are digital, while interaction is connected to the physical world. Here we have mentioned examples of some popular brands that have adopted a perfect phygital strategy to provide a powerful phygital customer experience. 

Food and beverage brands can also participate in delivering phygital customer experiences. For instance, KFC is currently experimenting with fully phygital stores in China. Consumers can order food at any store using touch screens, and payment is taken via facial recognition technology. 

The brand has taken another step towards digitization; with the help of AI, they can also predict what customers want to eat and provide them customized menus when they come to the ordering kiosk. 

Nike launched its first House of Innovation at Atlanta in New York City to deliver a 360-degree phygital experience to its customers. With mannequins equipped with QR codes, Nike’s House of Innovation functions like Amazon Go, allowing customers to request sales associates to bring them a particular color or size. After shopping, Nike’s instant checkout system eliminates the tediousness of the traditional checkout process.

It requires a large amount of creativity and an open mind to reinvent your store for retail in the future. Today, marketers are coming up with new and innovative strategies to boost sales. And a phygital strategy is perfect for creating a holistic online marketing space, especially as digitalization continues to permeate consumer lives quickly.