A Clever Way to Blend Physical and Digital in E-Commerce
The latest buzzword in the marketing world: ‘phygital’, what is it and why do retailers need to pay attention?
Did you notice? When you get on a train, sit in a restaurant, or walk around a shopping center, you’ll see that the majority of people are glued to their phones. Even though they’re physically present in a retail environment, they’re also immersed in the digital world.
There’s no doubt. The immense growth of e-commerce presents a challenge on the traditional retail sales. But the revolutionary integration of internet eventually inspires brands to create a new customer journey that combines both digital and physical commerce to boost brand visibility and sales.
Hence, “phygital” was born.
Blending Physical and Digital
Statistics show that store traffic has decreased 60%in the last few years, but when people do go to the store, they’re spending more, specifically 20% more. What does it mean?
Unlike what most people think, physical stores aren’t doomed because of the rise of e-commerce. In fact, more e-retailers today opt to open physical stores. Why? Well, nowadays, stores no longer simply serve as “places where transactions happened”. Stores today serve as touch points, a hub to connect buyers and sellers before the actual purchases happen.
Therefore, a phygital environment aims to close the gap between digital and physical world to integrate the digital landscape with physical businesses. This integration will create a whole new experience for consumers and retailers.
Phygital: Focusing on the Experience
The key to phygital strategy in e-commerce is to create an experience or product that people want to engage with. Whether offline retailer going online or online retailer opening brick and mortar stores, the ultimate goal is to push a certain customer experience by bringing the best of both worlds together.
For offline retailers going online
It is a fact that a growing portion of consumers find traditional stores boring and they seek a certain experience when they shop physically. Many retailers thus chose to go online to take a more creative approach to connect and engage with these potential buyers. Still, how do they compete with the digitally native e-retailers?
One of the methods they can employ is the click and collect strategy. Retailers can let their clients pick their products through their online website and come to the physical stores to collect their orders. This approach allows brands to create a relationship with their customers through online interaction then strengthen and maintain the relationship via personal engagement when they come to the physical stores. Besides, this method also serves as a solution for customers who want to avoid shipping fees or delays.
For online retailers going offline
Looking from the traditional marketing lenses, stores are the gateway to get products directly to customers. But for e-commerce retailers, these stores have become more than outlets to sell products. These stores serve as a part of their omni-channel strategy that focuses on engaging consumers. They also serve as a retail footprint to tell a brand story and curate an experience which ultimately leads to sales and customer loyalty.
Here’s what they can do. Before opening a physical store in a certain geographic area, e-retailers can collect online sales data to carefully decide which products they want to showcase in the store. From the data, they can see that for example, home decoration products sell extremely well in a specific residential area and based on that, they can open a brick and mortar store in that area carrying only home decor items to stimulate spontaneous purchases.
The Fitting Room: Bringing the Best of Both Worlds
Many retailers today have managed to seize this opportunity and offer customers both an inspiring physical store and a well-functioning digital shop. The Fitting Room for example, is an experimental store that allowed customers to browse catalogs on self-serve kiosks, try on shoes and apparel in the store and place orders for home delivery.
It manages to combine the benefits of a personal touch from a brick and mortar store and extensive product information from an online store. The Fitting Room lets customers to touch and try on the product physically while at the same time, access a wide selection of information, i.e. designer’s thoughts and price, which customers can normally find at an e-commerce site.
But here’s the catch. All inventories in the store were try-on only. This gives brands the advantage of having products that are always available and minimizing product returns. Once customers decided to make a purchase, they will be ushered to one of the touchscreens to enter their addresses and pay using credit cards or smartphones. They will then receive their orders within two days.
As brands and retailers recognize the need to create a customer journey that combines both digital and physical commerce, The Fitting Room paves the way to the application of technology to provide an innovative retail experience.
In Conclusion
Whether you’re a brick and mortar brand or a pure-play e-commerce retailer, you have to agree that we’re in an age where disruption is inevitable in retail business. To stay relevant, brands need to evolve and integrate across channels. With that in mind, every single brand interaction matters.
Modern consumers have greater expectations on brand experience, whether online or offline. As technology continues to grow and consumers evolve, phygital represents a strategy that balances digital and physical channels to provide seamless customer experience.
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