Phygital – what is this trend, and what does it mean for retail?

The market is changing more and more dynamically, and new trends in this area always appear. One of them is phygital, an approach that will be increasingly important in 2023 and subsequent years. What exactly is it, and what does it mean for today’s companies? We cordially encourage you to read it.

What is Phygital?

Phygital means the combination of two worlds in trading, i.e., virtual and real. This is due to the variety of physical and digital shopping experiences. Thus, shopping becomes a multidimensional experience, thanks to which the company gains more loyal customers and can increase its sales—however, only if these channels are well integrated.

How is phygital different from omnichannel?

Omnichannel is also a multi-channel approach. So how is it different from phygital? These approaches are largely convergent. However, Phygital grows out of this concept and is its development. It is primarily about integrating sales channels so that they work together to the benefit of the customer. An example is the possibility of returning a product purchased online in a brand’s stationary store. Virtual and in-store shopping experiences must therefore be well integrated.

Benefits of implementing the phygital approach

The first benefit of implementing this strategy is improving the customer shopping experience. Thanks to phygital, the shopping path is more convenient and smoother, giving you greater flexibility in purchasing. The long-term benefit is therefore increased customer loyalty to the brand, which will translate into higher profits.

Another advantage is building a competitive advantage. Of course, some novelties in this area may initially arouse uncertainty in some customers. However, there are also consumers willing to try new things. If a given solution is effective, they may be more inclined to use it and recommend it to others. Thus, the company will be perceived as innovative and may arouse the media’s curiosity.

Examples of phygital in practice

There are many examples of implementing the phygital strategy. It is worth starting with interactive mirrors that show the customer clothes in different color options. If such a product is not in stock, the QR code can be used to check whether it is available for sale online. If so, sales will be closed in the digital channel.

Another example is live video shopping from a company store. They allow you to contact the seller live, ask questions about the products, and “see them in action.” Such a presentation may increase sales in the digital channel, although it may also attract the brand to brick-and-mortar stores.

From our process, you will also learn how to automate processes in an online store, and automation is becoming increasingly important for e-commerce.

Phygital challenges

We already know what phygital is. We are also aware of the potential opportunities it can provide. But what about the challenges associated with it?

The key is investment in technologies and equipment aimed at integrating physical and digital experiences. However, each action must be planned thoughtfully so that specific technologies help customers rather than just an interesting novelty that does not bring them real benefits.

That is why it is so important to understand customer needs. For this purpose, you can conduct research, which is a valuable source of information in this area. Some support will also be closer contact with sellers (both operating in the online channel and stationery stores). Thanks to this, it will be possible to learn about the most common problems of customers and thus determine what improvements can help them.

Find out how to reduce returns in e-commerce while improving the customer experience.

Phygital is an approach not only for large enterprises but also for smaller companies. If it is properly planned and implemented, it can gain a competitive advantage and improve loyalty in an increasingly competitive business.