So you have been hearing about Phygital stores and wondering what is the big deal about that? For many brick and mortar retailers, this seems like some trendy marketing buzzword that involves tons of time and monetary investments. But it is not as difficult as it seems!

Combining the physical and digital landscapes

Phygital stores basically means retailers are combining their physical stores with digital & social marketing to reach more consumers and to enhance the customer’s journey and build brand loyalty . In a successful phygital landscape, it is not about physical retail stores replacing online stores or presence ; or vice versa, it’s about effectively bringing the best of both worlds together. Take for example, a retail store could also offer its goods and services online via e-commerce website or social digital media; and a e-commerce store could look into setting up pop-up stores for customers to touch and feel the actual products!

As consumers there days are perpetually immersed in the digital world via their smartphones, even when they are walking past retail shops, there is little connection between what is happening on their screen and their physical environment. A phygital store aims to close this gap and better integrate the digital landscape (for example online promotions for redemptions in stores) with physical businesses. And for certain industries, even though E-commerce has been rapidly growing, customers till prefer shopping inside a brick-and-mortar store as they cannot achieve the same sensory experience online (think home appliances, luxury goods, etc).

Enhance Customers’ Journey and Increase Brand Loyalty

With Phygital technology in stores, retailers can offer unique services to enhance the customer journey and give them more reasons to visit the retail stores (eg. free styling or personal shopping offered by fashion retailers). A two-way interaction between a brand and a customer at the store can transcends the limits of the physical walls, and helps brands provide a continued service to the customer – extending beyond the realms of the physical store (for eg. customers can access the online store 24/7 to download instructional styling tips videos or order online-only limited edition items).

Phygital Marketing can help you grow your business!

In Nov last year, CapitaLand unveiled Singapore’s first “phygital” multi-label concept store, NomadX last year at Plaza Singapura. The PhyNomadX features physical stores of e-commerce sites such as Taobao, Style Theory and Digital Fashion Week. Not only does this phygital store offers an elevated shopping to the customers and increase its customers engagement, it also address a major customer pain point, the checkout line; by allowing various payment systems, including scan and pay, in-app, and click and collect.

The retail industry is increasingly targeting digitally savvy customers who respond to location-based offers and spend more when given mobile payment options. This could be digitally sending coupons to customers when they are near your store or when they walk into your store, offering QR codes discounts, having interactive display screens throughout the store that recommend products, etc. These digital marketing campaigns help to engage your customers either before, during or after they make a purchase.

Phygital stores have reported increased customers’ spending in-stores, online, increased footfalls to retail stores, cost savings in shipping & delivery and much more! In Asia, leading the charge in digital-driven retailing is e-commerce giant Alibaba. In the quarter ending December 31, 2017, the Chinese conglomerate reported revenue growth of 56% year-on-year on the back of strong results in its core commerce, and its new retail initiatives are reimagining online and offline shopping with its Tmall Supermart; where customers can pay via facial recognition and get a discount on a product when they smile and Hema supermarkets whose customers can use an app to place their orders.

Support for our local retail stores to get PHYGITAL!

While local SMEs might not be able to invest heavily in converting their retail stores into Phygital, there is still plenty they can do to bring the digital and physical experience together. For example, by building an e-commerce website to showcase what they are already selling in their stores and developing a social and digital marketing strategy, they could allow customers to order online with discounts offered on their social media, and customers could then come to the stores to try the items, redeem free gifts or receive personal shopping service.

Buzzword or not, the conversation around brands getting phygital boils down to adaptation. Whether you’re a bricks and mortar brand, or a pure eCommerce retailer, disruption is inevitable and brands need to stay relevant, evolve and successfully integrate across both the physical stores and digital landscapes to build better relationships and more seamless experiences for both online and offline customers.

Bluehive Consulting serves to empower local retailers in going Phygital! Our IE Singapore recognised PCSMC certified Consultants and panel of Business Advisors would be glad to work with you on this journey and explore having up to 70% of qualifying costs supported under the EDG Grant. Check it out at: https://www.bluehiveasia.com/edg-grants/ and drop us a note at projects@bluehiveasia.com for a complimentary 60mins consultation.