Business, Customer Experience, E-Commerce

What is Phygital? How It will Shape Retail Trends in 2023

phygital retail experience - shopping packages coming out of laptop screen

Screen-time dominates our lives, so it’s easy to forget the power of physical experiences.  How about combining the best of both worlds? It’s called “Phygital,” a buzzword that’s taking the tech and retail worlds by storm. With smart mirrors and in-store tablets, phygital retail is bringing some brick-and-mortar stores back to life. 

No matter what it is, phygital is changing the way we interact with the world. So, what exactly is phygital, and how does it work? Let’s find out. 


What is Phygital?

Phygital – the ultimate fusion of physical and digital shopping experience. It seamlessly blends the two realms. Phygital creates a unique and immersive experience using technologies like VR, AR, and AI. 

With most in-store shoppers glued to their phones, online shopping is inevitable. 

So why not bridge the gap and create a more engaging in-store experience?

I mean, it happens a lot that introverted customers use Google instead of asking a salesperson.

You’ll love many benefits of phygital that include personalization and making an informed decision. Keep reading to know more.



7 Benefits of Phygital

A phygital store could revive a struggling industry, benefiting your business and customers. Take a look at some of the benefits it provides.

  1. Improves Customer Experience

    In 2023, customer experience is going to be one of the top trends in digital marketing. Your buyers will have a much better experience if you combine your in-store and online channels. It will let consumers connect with your brand when and where they want it.

    Customers can choose their purchasing channel, payment method, and order fulfillmentt.It’s only natural for busy consumers to want an easy, quick online shopping experience. Your company will get repeat customers and get more revenue.

  2. Enhances Brand Recognition and Loyalty

    Brand awareness and reach go up when customers can interact with your business both offline and online. When customers talk to your sales staff online, in a store, or in person, their faith in you grows. You’re more likely to keep customers who feel heard and understood.Phygital element makes it easy for customers to customize their buying experience. Of course, your customer will be happier and more likely to stay!

  3. Offers Personalized Service

    You can do magic when you combine your physical store and online store. For example, you can make personalized product suggestions. It’s one of the best things about going phygital.It gives you a comprehensive view of what your customers look at and buy. Also, it helps you understand customers’ preferences and recommend things that they like.

    According to McKinsey stats,

    • Personalization improves revenue by 15% and marketing-spend efficiency by 30%.
    • 71% of consumers expect personalized service from companies.
    • As a side note,76% of them get frustrated< when this doesn’t happen.


  4. Manages Inventory Better

    It’s easy to manage your physical and online businesses with phygital retail. So you don’t run out of stock. You can report correctly what you have in each shop. And you can make sure you never have to say, “Sorry, we’re out of stock” ever again!

  5. Improves Customer Convenience

    The most popular phygital element is online ordering. It’s like having a personal shopper at fingertips. All a customer have to do is browse, add items to the cart, and checkout from the couch. If they’re busy, have mobility issues, or just want to avoid the crowds at the store, this is perfect for them.Curbside pickup is another awesome phygital element. Shoppers just have to place the order online or with a mobile app, drive up to the store, and voila!No more parking or standing in lines. It’s like having your own  personal drive-thru, but for shopping.But wait, there’s more!

    Phygital elements include self-service kiosks. Customers can shop and pay at these kiosks without ever interacting with a human. It’s all up to them – browse the products, pick what they want, and pay however they like.

  6. Get Business Data Insights

    Whoever said that data is boring clearly hasn’t heard about phygital elements! These little marvels can provide businesses with valuable insights about customers. This includes a customer’s behavior, preferences, and interactions.Data can help you make better business decisions and make your customers happier.Businesses can now collect a ton of data about their customers thanks to technology. It’s easier to collect and analyze this data with phygital elements.

    This is like having a secret weapon to unlock your customers’ minds!

    For example, businesses that offer online ordering can track customer behavior and preferences. Data tells you what they buy when they order, and how they pay. Your customers’ needs can be seen in the future!

    But that’s not all – physical elements like self-service kiosks can also provide businesses with valuable data. Kiosks can track how long people spend browsing products, what they buy, and how they pay.

  7. Attracts Customer Through Innovative Experiences

    Improving the customer experience and driving growth is just the beginning. That’s right. But next, you must be innovative. Above all, “phygital” innovations will differentiate your brand to capture customers’ attention.For instance, think about the lack of human touch in online shopping. Online shoppers crave personalized experiences with expert guidance. So, why not use video chat to meet customers with your specialist? This way, you can create a sense of trust and deepen customer engagement in your online store. Especially if you sell complex or high-end products like electronics, furniture, and cosmetics.

    Read also: Say Goodbye to Static Chatbots and Hello to Engaging One-to-One Video Calls for eCommerce

    However, innovation isn’t solely about driving engagement and loyalty. Streamlining processes, reducing costs, and improving efficiency is just as crucial. And with new technologies, you can stay ahead and maintain your competitive edge. Therefore, it’s essential to ask yourself: are you embracing innovation in your business? Are you delivering the experiences your customers crave? Doing so can position your company as a leader in your industry, driving long-term growth and success.



Examples of Phygital

Whether your retail business started online or off, combining your physical and digital stores works.  Even though phygital is still in its infancy, it’s here to stay. Check out some examples of phygital.


1. Kiosks

You know how important it is to make shopping seamless. One popular example of phygital technology is kiosks. It’s been embraced by retailers everywhere. 

Customers can do simple transactions quickly and easily with a kiosk. Their speed is unmatched – whether they’re at the airport, the bank, or the restaurant.

You’ve probably seen how effective kiosks can be for streamlining customer interactions. 

What if you could up your kiosk game? Geofencing technology lets your quick-service restaurant greet customers with a kiosk that knows their location. 

Customers would get a more personalized experience, plus ordering would be easier. Kiosks can greet customers. Offer items they’ve already purchased. Even match info from their mobile app, like payment info. 

A truly personal phygital shopping experience requires communication and personalization. 

Leverage the power of technology and data. And your brand can create a kiosk that’s user-centric so customers keep coming back. 


2. Mobile Apps, Curbside Pick-Up, Delivery, and BOPIS

According to a recent survey by Mobiquity, consumers are going gaga for curbside pickup, BOPIS, and mobile apps. That’s up to 125% of their entire volume of purchases! The companies that provide the safest, most convenient experiences will win over customers. 

I’ve got more! You’ve heard about QR codes in restaurants, right? Those icky printed menus are gone – just scan the QR code on your table with your phone. You can read the menu or drink on tap in a flash. 

Let’s not forget all the different types of customers. 

Baby boomers might need some help with technology. Millennials and Gen Zers expect you to be tech savvy. Everyone should have what they need – an accessible digital experience.


3. Websites and Customer Portals

Take cues from the insurance and healthcare industries when setting up online stores. Both require easy-to-use online portals that let customers self-serve. You know, like paying bills or ordering prescriptions. 

Most retail websites don’t meet this standard. Making customers frustrated and turning to customer service. It’s a missed opportunity for retailers to provide great customer service. 

Everyone’s got their nose buried in their phones. Having a website that’s mobile-friendly is crucial. Let’s face it, we all use our smartphones for everything from checking the weather to ordering food. Users can handle their bills and prescription refills easily with a user-friendly website portal. 

Customer loyalty is higher for retailers with better digital features, so investing in an easy-to-use online portal pays off. 

52% of people say switching insurance is easier now than before. 30% would consider switching to better digital features. Insurance agents can be cool and all, but imagine if they taught us how to do stuff ourselves online. I’d love to see that.

Healthcare providers need to step up their websites. Add telemedicine options for people who don’t need to see a doctor. That’s what we call a phygital experience, keeping it real for patients and their lifestyles.

You should consider virtual shopping, just like healthcare providers. Customers who don’t like in-store shopping will appreciate the virtual shopping option. They will ask questions and make purchases.


4. Voice Assistance 

Each year, Amazon’s Alexa, a cloud-based speech service, gets more popular.  Voice assistants aren’t just for entertainment anymore. Businesses are using them to help customers in their daily lives. 

It’s a mix of digital and physical. For example, Alexa can monitor health data. This can be accessed at any time, even during a telemedicine consultation. Data like this can give a lot of insight into overall health. 

Retailers use voice assistants to make shopping easier for customers. One way they’re doing this is by integrating voice assistants into their stores. Alexa can help customers find a particular product by pointing them to its location in the store. This not only saves time for the customer but also improves their overall shopping experience. 

Voice assistants can also help customers place orders. Customers can ask Alexa to add something to their shopping cart, and she’ll handle it for them. When there are long checkout lines, customers can just use their voice to make purchases instead of waiting.


5. Digital Payments

37% of baby boomers report using mobile banking apps more frequently than ever.  Almost a third of millennials plan to switch banks in the next 12 months. It’s clear that customers want more phygital options from their banks. 

While many banking operations can now be done online. Digital payments extend far beyond digital banking. Retailers should look into integrating digital payments into their mobile apps to make things easier. Customers should be able to buy gas from their phones with minimal effort and complete the purchase right away. 

You can also make it even easier by integrating Apple Pay and Google Pay into your app. With more personal interactions, phygital payments will be more convenient.



Phygital Use Cases

Some shops that have tried phygital retail and succeeded:


1. Apple:

A few days ago, Apple launched a new way to shop for iPhones online. This new “Shop with a Specialist” service offers US customers a live video shopping experience directly on the website. With this experience, Apple gives customers a personalized touch, even if they’re not in the store.


2. Nike:

Nike stores in NYC have this crazy tech where you can scan a product with your phone and have it delivered to a fitting room! Plus, the mobile checkout is so easy.


3. Starbucks:

Starbucks app lets you order and pay on your phone. This is perfect when you’re in a hurry and don’t want to wait in line.


4. Sephora:

Sephora has a cool program where you can try on makeup looks with augmented reality. It even matches the makeup to your skin tone. Cool right?


5. Walmart:

With Walmart’s Scan & Go system, you can scan items and pay on your phone while shopping. It’s so much faster than standing in line!


6. IKEA:

IKEA has an app that lets you visualize furniture in your home with augmented reality.


Read also: 1:1 Video Chat: A Game-Changer for Online Furniture Shopping Experience


7. Amazon:

Amazon Go stores are wild. You can just grab what you need and walk out – no checkout lines. They use cameras and sensors to keep track of what you’re buying.



Future of Phygital

You’re always looking for new ways to engage your audience and create experiences that stick. Keep an eye on phygital because it’s the future of customer engagement.

But the key to success in the world of phygital is to go beyond the gimmicks. You need to create experiences that resonate with customers. 

For this, you need data and analytics to understand customer preferences and behavior. Once you know their needs and wants, you can tailor experiences for them.

There’ll be an upgraded anticipation model for phygital experiences in the future. 

I believe we will hear a lot more about this concept as phygital experiences become more widespread. 

Most of us have voice-activated remote controls. You can say the name of your favorite show on your remote, and it will start playing right away. 

But what if your TV and TV provider are so familiar with you that you didn’t even need to speak into the remote? And what if this thing knows your tastes, habits, and what you wanted to see? 

You call that foresight. 

This is similar to Netflix’s technique of collecting data to offer suggestions that steer you towards items you’ll like. It’s all about making the experience seamless between a user (human) and an activity (business). Your buyers don’t even realize their lives have been simplified. Real and digital encounters will blur so much that people won’t be able to tell them apart.

Embrace this new frontier of customer engagement. Your brand will be well-positioned to create lasting connections with your audience.



The Future of Phygital Technology in Retail

How do you know which new technologies will actually make the customer experience better? 

It’s exciting to see virtual and augmented reality (AR & VR). It’s likely they’ll be integrated into phygital retail more and more. But make sure you’re not just jumping on the latest trend. 

“Will this technology make our customers’ lives better?” is the question you need to ask yourself. 

First, you need to understand the basics of virtual marketplaces and the Metaverse. You should streamline operations and roll out essential technologies. For example real-time inventory management and mobile apps for customers and wholesale partners. 

You’ll see a huge difference in customer satisfaction and business efficiency when you do these things. 

You can’t ignore the potential of virtual experiences, but they need to be seamlessly connected to physical stores. It’s all about giving customers a phygital experience that’s personalized to their needs.


Read Also: How Live Video Shopping are Boosting Online Sales in the Beauty Industry



From Clicks to Bricks: Ecommerce Retailers Embrace Phygital Technology

The rise of Phygital technology in eCommerce

Buyers make purchases both digitally and physically. E-commerce companies should adopt a more phygital strategy. Customers start their product search online 87% of the time, so ignoring such channels is a big mistake. 

When choosing a retailer, 70% buyers value the ability to shop in-store. Customers want online and physical shopping alternatives, as well as engaging experiences. By humanizing the customer experience, phygital thrives in the in-between. By prioritizing shoppers’ needs and desires you can create a more immersive and engaging customer experience.



The future of Phygital technology in eCommerce

Phygital is transforming ecommerce, and the future looks even better. Virtual try-on technology lets customers try on clothes and makeup virtually before they buy them. They can explore products in 3D using augmented reality and see how they’d look in your home or office. Their voice could even help them find products, get recommendations, and make purchases.

You might have already integrated in-store technology to create personalized experiences for customers. Like interactive displays and smart mirrors. In the future, you can expect to see more innovations in this area. Touch screens, for example, that recommend products based on user preferences.

Customers will get tailored offers and recommendations from retailers using data. It could be personalized product recommendations, loyalty programs, or promotions based on your location. For instance, Amazon is famous for its personalized product recommendations based on previous searches and purchases.

The future of phygital in ecommerce is an exciting one. And you don’t want to miss out on it. The possibilities are endless!



Overcome Challenges In Implementing Phygital Technology

It’s time for you to rock the phygital world. But be prepared to face some challenges along the way. You’re covered with some tips and tricks. 

I’ll start with integrating with existing systems. It can be a bit of a headache. If you’re worried about integration, pick a vendor that offers easy compatibility. Remember, slow and steady wins the race. Taking a phased approach will minimize disruptions. 

Money, money, money, it’s so funny, in a rich man’s world! That was a little too much I know. But what I mean is that it’s expensive to implement new tech, especially for small businesses. But there are also cost-effective solutions that work. To see if it’s a good fit for your business, try a pilot project or trial phase.  

Whenever you implement new technology, employee training, and support are crucial. You know, they’re the ones who’ll use it day in and day out. Make sure they’re trained, and have user manuals, and online support. The happier they are, the smoother the implementation process will be.  

Security and privacy are major concerns when implementing new technology. Nobody wants their data to be compromised, right? You should make sure the technology you choose complies with data protection regulations. Implement robust security measures. If your data is secure, you’ll sleep better at night. 

Last but not least, user experience is key. Conduct user testing and get feedback from your customers to make your user experience seamless and enjoyable. Your technology will get better and your customers will be happier.


Read Also: Promoting Livestream Shopping Events: The Insider’s Guide to Boosting Sales



The Impact of Phygital Technology on the Retail Industry

Now you can let customers try clothes on and see products in 3D without even leaving your house! With touch screens that recommend products based on customer preferences, you’ll make them feel like a celebrity. 

And that’s not all – retailers are seeing a boost in sales thanks to phygital technology. You’re more likely to sell stuff if you give your customers an experience they won’t forget. 

What’s more? If you are phygitally-inclined retailer, you can‌ now also better manage your inventory. With RFID technology that tracks products in real-time, you can reduce waste and optimize inventory levels. With data, you can get insights into customer behavior and preferences to improve your marketing. 

Self-checkout and mobile checkout let customers speed through the checkout process like a boss. The automation of areas like inventory management has cut down on manual labor. Leaving employees free to focus on other important stuff, like perfecting their dance moves. 

The future of retail isn’t just about flashy new technologies. It’s about creating a customer-centric journey that combines digital with physical. It’s about designing shopping experiences that add real value. So, are you ready to join the phygital revolution?



Arvia’s Phygital Integration: Enhancing E-commerce through Live Video Shopping

Arvia offers innovative live commerce solutions that empower e-commerce businesses to engage with their customers like never before. With Arvia Live Shopping, your customers can interact with your brand in real-time through live video shopping experiences. Our solution is fully integrated with popular e-commerce platforms like Shopify and WordPress. And it can also be easily integrated with other tools via API and Webhooks.

So why wait? Contact us today, and let’s add Arvia’s live shopping to your website! Your customers will love the personalized shopping experience, and you’ll love the boost in sales.


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