Phygitization is reshaping the consumer shopping journey to the core

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To cope with the pandemic, retailers have been more zealous than ever to embrace technology for new ways to connect with audiences under the new normal. Brands with a relatively weaker online presence would like to augment virtual visibility, while brands originally focused on online business also seek to set up physical stores.

To enhance patronage enjoyment, it is essential to integrate physical and digital elements to offer immersive and personalized shopping experiences with consumer-centric considerations at the centre of the approach. Shoppers can use digital devices, platforms, technologies such as Augmented Reality (AR) or live-streaming shopping. Phygitization, as the tactic is called, is in fact not a coinage new to the retail industry.

This concept debuted in 2013 as widely publicized in scientific articles, editorials and publications. As the world is entering the post-pandemic era, how does it shape the customer shopping journey? From managing customer expectations, enhancing emotional and functional values of shopping experiences to achieving personalization of patronage, the concept can redefine retail custom in a different light.

Managing customer expectations

Extensive lockdowns and store closures in place have kindled a surge of interest in real-time information among customers as Google indicated, and this phenomenon has continued to grow with the emergence of the low-touch economy into the post-Covid 19 times. Consumers check out products online as well as the delivery status for in-person pickup. While the hybrid shopping experience bridges physical places and digital spaces, it goes way beyond establishing touchpoints and omnichannel sales. In fact, it elevates engagement between brands and consumers to build impactful relationships.

(Photo of K11 Musea, Tsim Sha Tsui, Hong Kong)

Phygitalization has been in action on the storefront of some luxury brands. To instantly build the first impression of a brand on shoppers at product launches, display windows are now supplemented with QR codes for customers to scan and learn about brand stories and product information at their fingertips, just as luxury watch and fine jewelry brands like Cartier have followed suit. Interested by marketing information from online outlets, capable buyers tend to visit physical stores to explore the collections in person. QR codes provide more product information and enable a seamless connection between the brand and shoppers, conducive to driving customer flow more effectively.

Enhancing emotional and functional values

Instead of simply applying technologies to brick-and-mortar stores, phygital strategies set a model to uplift business operation. Utilizing consumer-centric strategies enhances emotional and functional values in a retailing ecosystem that fuses physical and digital components. Dr Cathrine Jansson-Boyd, an associate professor of consumer psychology at Anglia Ruskin University, Cambridge, pointed out that in the consumer environment, not satisfying consumers’ need to have physical contact with products can immediately trigger a negative perception. Thanks to technology proliferation, physical stores can now serve as showrooms to offer leisurely experiential shopping even throughout the pandemic, complementing online shopping with the capacity to engender sensual connections. In the latest physical retail setting, it is more often than ever to see AR clothing try-on alongside physical products. In the luxury industry, it is Farfetch’s secret to keeping shoppers returning to the storefront during the post-pandemic times in spite of the existence of their user-friendly e-commerce website. This enhanced omnichannel experience achieved through Phygitalization ascribes success to the following factors:

Immersion: to fully engage shoppers in the shopping experience
immediacy: to promptly attend to shoppers in a physical store
interaction: to arouse positive emotional responses from patronage which technology is less likely to be able to do so

The approach ignites emotional desires among consumers to touch and feel the products in physical stores. Without digital enhancement, brands would find it difficult to implement such a holistic approach.

Achieve personalization of patronage

Personalization alone in the virtual context of phygitalization can hardly succeed in retaining the clientile. To win customers’ hearts for sustained patronage, it is substantial to blend online agility with personal touch. The “smart bonding” allows affluent shoppers to feel the products in the real world and build trust in the brand. Hence, patronage data derived from shoppers’ clicks, views and conversions online can support analyses that deliver useful insights into setting up a physical store tailored for target customers. As an indispensable necessity in everyone’s daily life, mobile phones are the crucial medium for brands to take into account when planning for personalization of the phygital shopping journey.

Let’s look at the example of Sephora which enhances shopping experiences with technology-enabled personalization. Customers can reserve in-store makeup services through their specially designed app. Then makeup artists will put products previously used by the customers into their personal selections and provide recommendations for them to do a virtual try-on. Upon visiting the store, the customers will find products from the online trial ready for purchase. This method substantially increases the effectiveness of production curation and reduces the rate of product return from customers. Adequate coordination of physical and digital presence as well as apt utilization of real-time data oil the wheels of omnichannel sales and building customer loyalty across channels. Unsurprisingly, the successful strategy paved the way for Sephora to top Sailthru’s Retail Personalization Index.

Final Thoughts

Phygitization is not just about technological elevation, but more about the customer-centric orientation of the shopping journey. Phygital strategies are intended to improve user experiences by leveraging digital efficiency for instant gratification of customers’ needs. Data is no longer merely figures when phygitization turns analytic findings into viable strategies for physical stores. That’s why we can see more brands open online stores while bolstering their physical exposure with innovations such as technology-driven pop-ups.

At TDF Asia, we offer flexible visual merchandising solutions in just 5 easy steps. Learn more about creating window displays, product displays, and fixtures for the luxury retail industry. Please do not hesitate to contact our project management team at enquiry@tdf-asia.com or give us a call at +852 2116