Articles and Research|November 8, 2019

Phygital CX: The Changing Face of Omnichannel Retail

Not to be outdone by the wordsmiths of this world, the retail industry recently came up with its own neologism, coining the term “phygital” to describe a new form of commerce — one that blends the best of offline and online experiences for an elevated customer experience (CX). 

It may be early days in the world of “phygital” CX, but brands are experimenting away, and coming up with innovative solutions to fit the needs of today’s omnichannel customer.

But how do you build links between a digital platform and physical store? What experience transfers are already proving successful in terms of engagement and conversions? And how do you make digital features work in the physical world, and vice versa?

What’s certain is that the line between eCommerce and brick-and-mortar is more blurry than ever. The reality is that digital has transformed everyday life. Many of our daily activities — work, communication and of course, consumption — play out in the digital realm. 

In fact, we have fully become phygital beings, and retailers are racing to adapt the customer experience to reflect our evolving needs and expectations. 

THE CUSTOMER IS KING

Consumers today expect seamless omnichannel journeys. But that’s not all they are looking for — they also want choice, and they want to feel special. And VIPs love nothing more than customized product or services!  

Digital has unlocked new opportunities for retailers, but has also made things slightly more complicated. Consumers are no longer looking for the cheapest product or best customer assistance — they seek excellence throughout the customer experience.

“Today we’re seeing a real convergence between online and offline, with many advantages for consumers,” explains Jérôme Malzac, Innovation Officer at Wide Agency. 

“On the eCommerce front: easy search, time-saving, the ability to order wherever, whenever… When it comes to local shopping, the human and physical dimensions are incredibly important, as well as contact between the retailer and the customer — advice, service, getting more info on a product and how quickly it can be purchased.”

LEVERAGING CUSTOMER INTELLIGENCE FOR A SUPERIOR CX

One of the main challenges for brands today is delivering intelligent customer journeys that are adapted to every customer. Collecting and aggregating customer behavior data can help brands identify pain points along the customer journey (both online and offline). But it doesn’t stop there, as a granular data collection allows brands to effectively personalize the experience and services. 

“Thanks to data, we can follow our customers along their journey both on and offline, and suggest relevant products to them. For example, a woman who has just purchased newborn clothes will get suggestions for baby shoes,” explains Vanessa Guignoux, head of digital and eCommerce at Gémo.

Integrating mobile app localization can also help brands deliver useful information to customers at the right time, and make their store visit more efficient. Brands can optimize a store visit based on a digital shopping list, for example. And understanding app behavior allows teams to maximize the role of smartphones in facilitating a great CX at every touchpoint.

“Digital makes omnichannel possible, and allows access to things that were only possible in the physical world, removing obstacles to purchase, understanding, sharing and knowledge. In the other direction, from digital to physical, we see gains on the human, emotional front,” explains Yann Carré, head of the marketing communication cycle for Decathlon. 

“But you need to maximize this potential. The most important thing is to have a completely responsive website, one that can be browsed and visited from any device, be it desktop, tablet or smartphone. To illustrate this, for over a year now, more people visit the Decathlon site on a smartphone than a desktop. All of our content (image, text, video, comparison tools, 3D) are conceived to be accessible digitally and to complete the offline and in-store experience.”

With consumer needs and expectations evolving fast, agility and continuous monitoring of customer behavior have never been more important. Digital teams need to analyze the way customers interact with their digital properties as part of their daily workflow. And adopting a design thinking approach and test & learn strategy allows teams to react quickly and keep up with customer expectations.

THE BEST OF BOTH WORLDS

Armed with a better understanding of their customers, digital retailers and brick-and-mortar stores have started to adopt a phygital CX strategy. Drive-throughs, in-store lockers, click & collect and online reservation are just some of the ways brands have integrated offline and online to improve omnichannel CX. 

Brands have also been exploring the benefits of expanding the reliance on digital in-store, removing typical customer frustrations prevalent in physical stores such as: low inventory, or a certain size not being available. Sales assistants now use tablets to help customers complete an in-store purchase online. Some brands even mix in-store help with added online services to offer product personalization, for example.

“Our sales assistants and department managers have access to the same information as our customers via smartphone, tablet or interactive in-store touch-screens. But they’re also able to analyze buyer behavior from a mobile number or email address. By checking their information system, they can view the purchase history and searches, and engage Mr. D with advice, product suggestions, etc,” said Yann Carré. 

“And each department manager also has all the information that will allow them to make pricing, inventory and merchandising decisions. For example, if a competitor is offering a more competitive price on a particular item, they are empowered to change the price of this particular model to match or to offer a more competitive price. They can predict how this will impact sales either positively or negatively. They have all the intelligence they need to make important decisions completely autonomously.” 

Phygital logic also drives a store’s merchandising strategy. For example, if an item gets anything less than a 3 out of 5 customer score, it is removed from both the online and offline store in order to be improved.

There are many other innovations on the horizon. Monoprix, for example, is hoping to speed up in-store checkout with its Monop’Easy solution. It’s simple: customers scan their items via the mobile app, pay, and receive their receipt by email. 

Sephora also offers a mobile app that blends digital and physical realities, allowing users to test out makeup thanks to AR, and delivering info and advice to in-store customers as they are browsing the physical aisles. And beauty brand Passion Beauté has been inviting social media influencers into their stores.

Pure players have also been playing the phygital game, coming up with concept stores that allow them to get closer to their customers. In New York, you can rent pajamas and a book a bed for a 45-minute nap at Casper’s Dreamery. 

Sezane, which started off as a pure player, has opened showrooms it calls “apartments,” where shoppers can browse exclusive designs and new releases in a cozy, trendy setting. 

Brands are constantly coming up with unique ways to explore the transitions between digital and physical, and elevate the click-and-mortar experience. “We want to be (to sports) what Airbnb is to accommodation and travel,” says Yann Carré. “We want to offer more than just the value of the product and create value around sports, too. 

The more people do sports, the more opportunities there will be for us to connect with them, and sometimes, even if not always, that will transform into a purchase.”

 

Author
Pierre Sommer

Pierre Sommer is on the Content Marketing team in Paris. He likes blogs, UX, and blogs on UX.

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