Phygital, the key to shaping customer experience

Life as we know it – as both consumers and businesses – has undergone a massive transformation following the COIVD-19 pandemic. Wary of large public gatherings and prolonged exposure while shopping in a mall or at a marketplace, customer behaviour and expectation has changed forcing brands to rethink their marketing strategy. As consumers, most of us opt for convenience, gravitating towards less crowded areas, home delivery, time-scheduled shopping or by shopping at nearby stores. As a result naturally, online shopping has increased.

As per the Deloitte consumer tracker survey, consumers lean towards online shopping as opposed to purchasing in-store, with 51% respondents finding online buying and store pickup a better option and 44% choosing to buy groceries online. In this scenario, an omnichannel strategy for brands has become pertinent with concepts like digital browsing, click and collect, try and buy, curb-side delivery, video shopping etc gaining importance. To cater to these changing patterns, ‘phygital’ has become the buzzword, with brands innovating with experiences that encompass both the physical and digital space.

Today, going online is much beyond simply setting up a website or an app. It is about creating a future-ready digital infrastructure that captures value across the entire chain. Businesses are now working towards enabling seamless and safe shopping experiences by adopting a phygital approach. This phygital approach involves integrating the real and the virtual world with channel-specific merchandise mixes, customer-centric processes, efficient supply chains, and targeted marketing. All of these need to be bolstered by future-looking technology architecture.

India Gets Phygital

India’s phygital story is unique given its vastness and diverse consumer mix. Driven primarily through the power of assisted commerce along with the factor of convenience, the phygital strategy needs to be centred on what’s best for the market considering the diversity rather than just replicating what is happening in the rest of the world. Brands need to formulate strategies that cater to all – be it the masses or urban riches. With growth in both metros and Tier 2/3 cities, newer and newer models will need to be devised for specific consumer groups.

While this mix of densely populated cities and geographically dispersed rural towns has seen growth in the retail sector, it is still dominated by kirana stores and small local shops. In the wake of the pandemic and the lockdown that followed, the e-commerce sector realised the need to innovate and adapt. Given the trust that consumers had in the kirana or neighbourhood stores, e-commerce-only companies realised the role offline stores can play to augment omnichannel retail. So while Amazon partnered with 20,000 kirana stores for storage and delivery of goods, Walmart-owned Flipkart invested $30 million in a start-up ShadowFax, a logistics network which onboards neighbourhood stores in 300 cities. Giving stiff competition to these phygital efforts by international players, Reliance Retail’s new venture JioMart, an online-to-offline marketplace, enabled consumers to buy groceries online and pick them up at the local store. Local stores were equipped with Jio digital point-of-sale machines for digital transactions and inventory management.

On the other hand, brands are increasingly becoming future-ready, leveraging digital tools such as Artificial Intelligence, Virtual and Augmented Reality, Big Data, Geo-fencing and Facial Recognition to offer an enhanced shopping experience to the consumers. The true value of phygital marketing lies in exploring different combinations be it tech-enabled payment and billing options, ‘buy & try’ where customers can make their purchase and try it at home, VR enabled stores or WhatsApp commerce. Malls, that were one of the hardest hit businesses by the pandemic, are going phygital too, like Delhi’s Select Citywalk mall and Ambience malls in Gurugram and Vasant Kunj, where customers can get a virtual tour of the stores and have a personal shopper pick up the desired items and get them delivered home.

There is immense scope for brands and retailers to leverage tech-enabled strategies like in-store operations powered by virtual reality, smart trial room experiences, innovative use of social media, live displays of stock being available and click and collect, among others. Brands like Myntra and Flipkart were early to the phygital game with their respective try and buy models.

However, while businesses might be taking these innovations on a point-solution basis, in order to continue to thrive in a post-pandemic world, an integrated phygital approach incorporating technology at all touch points is essential. Whether buying from physical stores, websites or mobile apps, the consumers should have the same experience. Businesses also need to understand consumer behaviour scientifically and make adequate changes in order to ensure a seamless customer experience.

Campaigns That Stand Out

More than a mirror:  While the global fashion brand Rebecca Minkoff stores look like a traditional retail space, the technological magic happens in the mirrors and the fitting rooms. The mirrors are actually interactive touch screens and the fitting rooms are smart as well. You can pick what you want to try, adjust the lighting and even ask for a beverage of your choice through the giant touch screen!