For the past 10 years at least, the doom of the "Retail Apocalypse" has been heralded by one headline after another. A story was told of e-commerce as the only winner that would cannibalize physical stores, and thus, the era of shopping malls would be over.
They have been proven to be wrong.
Retail in physical locations is not fading away; rather, it is changing. While customers still ask for the convenience of a super-fast delivery like they have become used to with Amazon, they also continue to be attracted by the stores' tactile experience. Next decade's winners will not be those companies that make a choice between "offline" and "online". Winners will be those companies that combine them into one single, seamless ecosystem.
The concept of Phygital Retail is now operational.
In case you operate a business having physical locations, your biggest asset is no longer merely your inventory, but instead, it is your capability to connect your storefront with your digital stack. A unified commerce strategy is the way to loyalty and revenue. Here is how you can do it.
What is "Phygital" Retail? (And Why Does It Matter?)
"Phygital" (Physical + Digital) is not only a buzzword. It is the ultimate integration of the real and the virtual worlds to deliver an uninterrupted customer experience.
Phygital vs. Omnichannel: What’s the Difference?
The majority of retailers are already omnichannel. You operate a store, a website, and probably also an Instagram shop. However, in most cases, these channels are functioning separately. The store manager is not aware of what the web team is promoting, and the website does not know that a customer who is looking for something online is actually in Aisle 4 at the store.
Phygital is all about removing the obstacles that cause agitation. It adopts the latest developments to enhance the physical shopping experience and make it more user-friendly, quicker, and more targeted to the customer.
The Data Case
A whole network of contemporary retail studies revealed that the customers who purchase both via physical and digital channels are the ones having a 30% higher lifetime value (LTV) than the consumers who choose only one channel.
The Core Components of a Phygital Tech Stack
You cannot carry out a phygital plan with outdated and unconnected systems. To support this transition, many retailers invest in professional e-commerce development services to ensure their digital systems connect seamlessly with their physical stores. To combine your brick-and-mortar with your ecommerce, your tech stack should have three pillars: Many brands enhance this foundation with custom ecommerce solutions that allow deeper integrations tailored to their physical and digital operations.
1. Unified Inventory Management (The Backbone)
The quickest method for a customer to turn away from you is to see an online statement that a product is "in stock" and then to find the store shelves empty after the visit.
The Fix: It is necessary for you to have a centralized Inventory Management System (IMS) that is able to sync in real-time. The moment when a cashier in your downtown store scans a pair of jeans, the counts of your Shopify or WooCommerce inventory should update immediately in order to avoid overselling online.
2. The Cloud-Based POS
The time has gone when the cash register was only capable of one function and was isolated. The Point of Sale (POS) is the most important data entry source of your business at present.
The Fix: Install a modern POS (e.g., Shopify POS, Lightspeed, or Square) that can integrate naturally with your ecommerce platform. At the same time, the data on sales, customer profiles, and stock levels coming from any location can be accessed through one dashboard by the user.
3. A Centralized CRM (Single Customer View)
Is the associate in your store aware that the client who just arrived spent $500 on your website last week? They really should.
The Fix: Your Customer Relationship Management (CRM) system should be a tool that collects data from both online clicks and offline card swipes. The so-called "Single Customer View" is the result of this, thus giving an opportunity to businesses to provide tailored loyalty programs and make the most relevant product suggestions grounded on total buying history, not just what was bought in-store.
5 Actionable Ways to Integrate Physical & Digital
When your stack has been unified, the subsequent strategies that you can deploy are those that customers adore.
1. Master BOPIS (Buy Online, Pick Up In-Store)
BOPIS is a perfect example of phygital retail. Customers save money on shipping, and you get to attract more people to your store.
By the time a consumer steps into your shop to collect an already ordered item, consider a physical location as being a "micro-fulfillment center." The employee can advise the customer about other products that will complement the one he is picking up (for instance, "This belt will be great with your dress").
2. The "Endless Aisle" Strategy
Nothing is more painful than a customer leaving your store because you don't have the right size for them.
You can enable your sales personnel to use tablets that are linked to your online shop. In the event that a size is not available in the store, the assistant may order the item from the online warehouse at once and have it delivered to the customer’s home. Thus, the customer is satisfied, and you still have the sale.
3. QR Codes and "Smart" Shelving
Deliver to the customers who are shopping in a physical store the best part of online shopping, namely, product reviews and specs.
What you need to do is to put QR codes on shelf talkers. By scanning this, a product page showing a video tutorial, customer review, or styling tips can be launched. This enables the customer to purchase a product with confidence without the need to ask a salesman for help.
4. Mobile Clienteling
Associates can be made more effective and helpful consultants if you give them the right tools.
With a mobile clienteling app, an associate may be able to see the profile of a loyal customer the moment he/she walk in. Past purchases can be seen ("How did you like the running shoes you bought in March?"), and they can make the most relevant suggestions.
5. Interactive Fitting Rooms
The fitting room is where the conversion happens. Don't let it be a dead zone.
The Strategy: Smart mirrors or tablets in fitting rooms allow customers to request a different size or color with a tap, alerting an associate to bring the new item. This reduces friction and increases the likelihood of a sale.
Overcoming the Challenges of Integration
There are obstacles on the way to transforming to a phygital model.
The "Siloed Data" Nightmare
It might be that your 20-year-old ERP system is not compatible with modern APIs. To connect the two, you may require middleware or a customized integration.
Staff Buy-In
Even the greatest technology will not yield results if the team neglects to utilize it. Store associates often worry that an increase in ecommerce means a loss in their commissions.
Pro Tip: attribute local stores with online sales if the customer is in that area, or provide "bounties" for in-store endless aisle order placement. The digital world should be a tool in your team's hands to help them earn more, not be their competitor.
Pro Tip: attribute online sales to local stores if the customer is in that region, or offer "bounties" for endless aisle orders placed in-store. Let your team know that digital is a tool that assists them in making more money, rather than being in competition with them.
Conclusion: The Wall Has Crumbled
The contrast between "brick-and-mortar" and "ecommerce" is only visible to the people sitting in the boardroom. For your customer, there is no border. There is only your brand.
What they want is to be able to browse your products while having breakfast, come to your store during the lunch break to try it on, and have it delivered to their home by the evening. You are not merely updating your technology by integrating your physical presence with your e-commerce stack; you are making your business invulnerable to the future.
Are you prepared to consolidate your retail empire into one?
If your POS and website are not communicating effectively and you require a strategy for implementing BOPIS without the problem, please get in touch with us for a consultation regarding your retail tech stack.
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