Skip to Content
8 minutes read

The Fundamentals of Phygital Retail

By Alvaro Insignares
By Alvaro Insignares
8 minutes read

If your company is in the retail industry and you have never heard the term Phygital, you are definitely missing out on the next big thing. With the growing use of social media, wireless devices, and eCommerce, companies are starting to see the benefits of integrating physical and digital experiences to create a better Customer Experience (CX).

Phygital marketing is a business strategy that seeks to merge the physical and digital worlds rather than just connect them. Like any other marketing strategy, it seeks to increase sales, but it doesn’t stop there. This approach can completely change the way you see your business.

In this post, we discuss what a Phygital strategy is, its benefits, and some advice on how to implement it. We will also discuss the importance that retail apps play in any successful Phygital experience.

What Is Phygital?

Phygital is the name of a marketing strategy that seeks to blend the best of digital and physical channels. Often referred to as Phygital retail, this strategy tears down the walls between brick and mortar stores and online shopping. 

YouTube video

The result of implementing Phygital retail is an improved Customer Experience as well as increased sales and ROI. To achieve this, companies will need interdisciplinary teams that are able to address the needs of traditional brick and mortar stores and those of online shopping so that users experience them as being the same. In other words, a Phygital retail store should encompass both online and offline elements.

One of the key elements of any Phygital marketing project is the mobile app it uses. A mobile app is the perfect way to close the gap between the physical and digital world. However, this requires not just any app. To make the best out of your Phygital retail app, you need to make sure to hire professional mobile app developers who take the time to understand the needs of your business.

The Difference Between Phygital Marketing and Omnichannel Marketing

Although a Phygital strategy is sometimes compared to an omnichannel marketing strategy, it differs in important ways. The most important characteristic of Phygital experiences is that they go beyond just giving customers different channels to stay in touch. Phygital retail does this but goes a step further.

Phygital marketing blurs the lines between the digital and physical. To most customers, the friction between online shopping and going to a brick and mortar store can demotivate them to finalize their transactions. Thus, when companies focus on reducing the pain points that produce these frictions between the online and offline world, the Phygital experience is born. 

In omnichannel marketing, this does not occur. It is one step behind in the sense that the friction between the digital and physical world still exists. Customers may have different channels through which they can communicate with your brand, but there is still a barrier present.

Is Phygital Retail More than Just a Trend?

At the beginning of the pandemic, many retailers thought that it would be the end of many brick and mortar stores. However, we have seen that this wasn’t the case. As a matter of fact, the opposite occurred. With certain normality coming back to specific places, customers want to go back to the physical store.

This rediscovery of the physical store can be explained in part by the fact that humans are social beings. There are many benefits from buying online, but there are also certain things that traditional brick and mortar stores offer too.

This becomes more obvious with certain audiences. For older generations, for example, a physical store is the ideal place to buy. For younger generations, brick and mortar stores aren’t absolutely necessary, but having Phygital experiences is definitely way better. 

So, to answer this question, no, the Phygital experience isn’t just a trend. It is the new way in which retailers will approach their customers. The ones who understand this sooner will have an advantage over those that think of it as a trend that will eventually fade out.

Phygital Marketing: Practicality and Emotion

When it comes to Phygital marketing, more than a specific strategy, it is important to highlight the importance of practicality and emotion. The combination of these two elements is what allows Phygital retail to deliver a unique Customer Experience. 

Emotion and practicality belong to the physical and digital worlds, respectively. By bringing them together, the value that customers perceive is way greater than for each one individually. In other words, the sum is greater than its parts.

Phygital retail combines the seamless opportunities that eCommerce offers with the deeply emotional aspects that a brick and mortar experience delivers. Understanding this is key for any successful Phygital marketing strategy.

Ideally, Phygital marketing should make it easy for customers to find out information about a product online or even buy it, while at the same time delivering incentives to visit the store and see the product in real life.

Augmented Reality

Although augmented reality offers many benefits and opportunities to retailers, it is not a strategy by itself. Instead, augmented reality can be seen as an important part of any Phygital marketing strategy.

The Benefits of Phygital Marketing

Retailers are betting hard on Phygital experiences because of the many benefits this offers. However, implementing one is often something ambitious, and it requires that you think thoroughly about many different aspects that might impact customers.

In short, bringing together the physical and digital through Phygital marketing can potentially offer the following benefits if done right:

  • Bringing together the physical and digital: bringing together these two aspects of your business will help you approach your challenges in a strategic way.
  • Frictionless buying experience: makes it easier for customers to perform the tasks they need in order to perform a transaction, reducing churn.
  • Omnichannel brand presence: Phygital retail gives customers various alternatives to stay in contact with your brand.
  • Increased sales and ROI: less friction and a strong omnichannel presence produce better financial metrics for your business.
  • Strong Customer Experience: with competition increasing every day, adding value to customers will help you stand out from the rest of the market.

What Is the Best Phygital Marketing Strategy?

There is no single best Phygital strategy for your business. However, keep in mind that in order to stay relevant, you should always innovate new ways to use technology so that it delivers value to customers. Not doing so will prevent you from reaping the benefits of new technologies.

A Phygital strategy that leverages its capabilities on the smart use of technology is always a good idea. These are some technologies that will help you implement your Phygital strategy successfully by bridging the gap between the physical and digital:

  • Digital screens
  • QR codes
  • RFID tags
  • Augmented reality
  • Smart mirrors
  • IoT data beacons

These technologies can be used for the following Phygital tasks and features:

  • Self-service
  • Contactless interactions
  • Payments
  • Inventory management
  • Product testing

The Phygital Experience

In order to bring together the physical and digital worlds, Phygital retail needs to make use of the best technologies available. Nonetheless, this isn’t enough. Additionally, it also requires making use of Big Data.

When it comes to Phygital experiences, data will help you add that extra value to your customers. That is why it is very important to integrate IoT technologies into your Phygital retail project. 

By making use of IoT beacons, you will be able to communicate with users in the physical and digital worlds without any friction. However, in order to do that, you will also need an app.

Phygital Retail Apps

No Phygital marketing strategy can be complete without a proper app. A Phygital app will help your company remove the barriers between the physical and digital, and at the same time, will help you process relevant data.

A Phygital app will also help your customers to interact with your brand through its many different channels. That way, you can always stay in touch with customers while helping them complete their transactions.

Keep in mind, however, that a Phygital app should take into consideration the specific requirements of your retail business. It shouldn’t just be a one size fits all solution. After all, you don’t want to give your customers a generic experience.

To make sure you build the app your business deserves, find a trusted app development partner who can guide you throughout the process of building an app and will take the time to understand what your requirements are. 

Girl With Glasses

Want to Build an App?

Request a free app consultation with one of our experts

Contact Us