by Steve Wilson

Getting Phygital Right

by | Nov 29, 2021 | Uncategorized

Most retailers are fiddling around with phygital but few are getting it done the right way. 

But let’s start with defining the term. When you start with the physical, in-store shopping experience and then add the digital, online consumer experience to the mix, you have an equation that goes something like this:  

DIGITAL + PHYSICAL = PHYGITAL  

It’s a literal combination of the words physical and digital. I don’t usually embrace cute (and borderline corny) names like this, but in this case, it’s actually an accurate way to describe an important trend.

Once we all get comfortable with the word, retail sales executives and sales managers may be left wondering, “What does that mean, practically speaking?” The answer is simple. It’s the straightforward blending of digital shopping, such as ordering something from a retailer on your phone, with the physical, such as visiting the store in person and picking it up (BOPIS).   

The MarketSource research team found some late-breaking insights that shed light on the status of phygital retailing in America:  

Six in 10 respondents to a recent survey said they prefer to perform more than half of their shopping online.
Yet, two-thirds (67%) said what they miss most about in-person shopping is interacting with products and knowing what they’re getting.
Many in-person shoppers welcome leading-edge technology that enhances the in-store experience.
Of those who mostly shop online, nearly 50% say that informative, interactive displays would be the most enticing feature while shopping in person.
56% of respondents said product reviews would be the most helpful feature from online shopping they would like to see in-store, with price comparisons second at 39%.

Source: In-Store Shopping: Hiccups & Hangups of 2021 

It’s clear that shoppers desire, and expect, the electronic and digital aspects of online shopping to follow them into the store. And it’s obvious that the melding of the physical with the digital into a unified phygital experience can add value to the shopper’s life and drive sales. 

Two Key Components to Phygital Success

However, the ability of retailers to meet phygital expectations in the real world is another story. To truly win with phygital, retailers must address two key facets of the experience. If these aren’t properly addressed, you will have less satisfactory results. 

The physical experience is primary.

Digital comes second. After all, it’s a human who is clicking on all those buttons on their phone or computer in the first place. Consider the physical interactions that your ideal customer desires and, with this human factor in mind, enhance those interactions with digital elements that reinforce an overall positive experience. 

You have to consider those physical elements as a priority and not fall back on automation to solve all your problems. Use the automation to augment the experience. For example, when customers click on a “chat now” button on a website, they expect to initiate a conversation with a human who will answer their questions on behalf of your brand or store. But if they are merely greeted by a software-run bot, they will be disappointed because of its inherent limitations. This can so frustrate customers that it risks losing them to a competitor. 

You can ensure a positive interaction based on an intuitive, balanced blending of technology into the experience. For instance, customers greeted with a bot can be made aware that if it can’t answer their question, a real person will jump in. Knowing that if the question stumps the bot, after a “swing and a miss” they will connect to a real person, gives customers comfort. 

Figuring out when the real begins and ends is the first part. Automating around it is the second part. This brings us to our second key facet.  

Appealing to emotion is a must.  

Once you’ve created a satisfying physical interaction that integrates with supportive digital automation, you must consider the customer’s emotional connection with you. How did the buyer initially find you? What do they expect from you when they arrive at your online site or storefront? How do you curate an experience that will leave customers happy and, hopefully, wanting more from your brand? 

Many retailers are so focused on the mechanics of getting other things done—and distracted by having to navigate supply chain worries and hiring woes—that they let the ball drop when it comes to paying attention to mining the full potential of positive customer interactions. The goal is to influence customer behavior such that they want to buy from you now and will remain loyal to you in the future. The best way to influence behavior so that they connect with you and stay with you is through the creation of an emotional connection to your brand. 

It’s Not the Channel, it’s the Conversation

There’s a habit that retail and brand marketers and sellers should break right now: stop thinking in terms of channels.

I understand this traditional attitude as much as anyone, having spent eight years at a company by the name of Channel Partners. Naturally, separate online stores and physical stores exist, and most physical stores also provide an online shopping option, but when consumers engage with these stores they don’t differentiate them as channels. From their perspective, they are engaging with a single you: your brand, your product, your experience.   

Put yourself in a customer’s shoes. Imagine how annoying it would be if you bought something online from a retailer, and then made a visit to the retailer’s physical storefront to return the item, only to be denied and told to package it up and ship it to a special returns department yourself. The store associate explains, “Oh, we’re two different channels and we can’t work well together.” Who wouldn’t resent being treated this way?  

Customers don’t differentiate between channels. They are engaging with YOU: your brand, your product, your experience.

This is not omnichannel. It’s phygital. It’s no channel, or all channels. The channels may operate separately but are completely invisible to the customer.

At this point, you might be assuming that the above is merely a description of omnichannel, and we already know about that. Nope, this is not omnichannel. It’s phygital, which infers no channel, or all channels. (Or maybe omni-omni channel?) All kidding aside, the point is this: The different channels may actually have to exist, and may operate separately somewhere behind the scenes, but they must be completely invisible to the customer and they must work together cohesively and fluidly. That means retailers must always regard them as inextricably intertwined and combined.  

Separate Pieces of the Same Puzzle

The puzzle of retail sales planning is about pulling the pieces together to create a unified experience for customers. It might be compared to planning for a winning basketball team. Each player on the team is assigned, in advance, a unique strategy to follow throughout an entire game; but success depends on adapting individual player strategies in a way to connect each player with other teammates. Working together, teammates execute particular plays to win the overall game. 

Retailers can plan for phygital success in a similar manner. Start by assessing what winning would look like for your company. Define your true goal for phygital. Besides improving the customer experience, are you aiming to lift revenue, streamline operations, improve customer loyalty, increase sales volume?  

Then, take stock of the key functional areas (such as sales, customer service, inventory control, data management, etc.) that will contribute to the desired result. Assure your human elements and physical touchpoints are coordinated and working smoothly. Next, align all of the functions and elements to make sure they are communicating and connected one to the other for strategic execution to achieve your overall goal. Finally, augment with digital and align both to maximize the emotional element for your consumers. 

This may be a simplistic view of how to get phygital off to a satisfying start, and in reality it is fairly simple, but many retail companies and brands are still grappling with the transformation after decades of internal channels competing and using different pricing, sourcing, returns, etc. The good news is that these companies are already aware of and working to solve the problem by uniting channels mechanically, but they won’t become fully phygital until they take a step back and home in on the key fundamentals, i.e., putting physical experience first and ensuring an emotional connection. 

With e-tail growth in many sectors outpacing physical brick and mortar growth, the knee-jerk reaction is to try to build a digital strategy first, investing in all kinds of emerging technologies, or grow two separate strategies – which doesn’t make rational sense once you understand the optimal value to both you and the customer of linking the two under one operational umbrella. 

Phygital is the Future

Unifying your omnichannel strategy puts you on the path to phygital success. But it’s not even close to all retailers need to know to implement it for optimal impact. And in a sense, phygital is still a relatively new frontier, evolving daily. Digital companies are figuring out the physical world, as seen in Amazon opening stores and taking returns at Kohls. Physical companies are upping their game in the digital world, as demonstrated by Walmart and Kroger diving into online grocery shopping.   

There are so many other aspects of phygital that are still being developed and tested. Specialized applications of augmented reality, for instance, may soon be a common digital overlay to help customers make purchasing decisions. And the fact is, autonomous cars and robots delivering packages are different facets of the phygital experience. These phygital means of engaging are destined to be the future of every retail or e-tail engagement.  

At MarketSource, we have assisted many large, recognized retailers in building brands and accelerating sales. Although they are fairly sophisticated in terms of their management expertise, they understand that creating a positive phygital experience spanning all of their customer touchpoints is a challenge that is often best left to professionals with proven expertise in this area. Over the past several years we’ve provided retailers and brands with the right people and the right technologies to deliver the right customer interactions at the right time. It is a major investment and a labor of love on our part, because as we pass along our specialized knowledge, we build close working relationships with our clients and have the opportunity to share in their successes with our programs. 

Phygital is a cute name that sums up a concept that will shape the future of retail. It merges the physical and digital world and even puts the physical first where it belongs. As is true for all impending social shifts, if you’re not knee deep in figuring this out now, you may be behind.   

Interested in hearing more phygital success stories? We would love to show you how we have accelerated sales for major retail brands nationwide, and how we can do this for you, too. Contact us today. >> 

 

Topic: Uncategorized

ABOUT THE AUTHOR

Steve Wilson, Executive Director of Retail Strategy and Operations | As executive director of strategy and operations, Steve Wilson has been helping steer the strategic direction of MarketSource’s retail business unit since 2010, with oversight including operations, new services and capabilities, and reporting and analytics. Steve has over 25 years of experience designing, implementing, directing, and operating retail programs focused on driving customer experience and sales.

At MarketSource, an Allegis Group company, we believe better sales begin with better relationships. Our proven alternative to traditional outsourced sales is led by a proprietary process that helps businesses thrive by fostering deeper connections between people and brands.