The buzzword is Phygital to win the consumer’s heart. It’s absolutely necessary to keep evolving as a retailer, insurance company, bank, service provider,… but the main question is for many of us the same as how to start a webshop in 2005: How to start with Phygital retail experience? And even more important: how to increase customers and revenue?
What does Phygital Mean?
Phygital is a term that appeared in 2013, a contraction between the words “physical” and “digital”, which refers to a marketing strategy. The phygital commerce is a physical point of sale that integrates data and methods from the digital world in order to develop its turnover.
Phygital for offline business
By digitizing their point of sale, the retailer or service provider seeks to optimize the efficiency of their commercial strategy and to attract new customers. Phygital can be based on the installation of touch screens offering different applications, including real-time price verification or reading an interactive catalog. Connected interactive kiosks allow more in-depth research to be carried out online. They can simplify custom 3D design or offer new options that are not yet available in store.
The phygital puts innovative tools and cutting-edge technologies within the reach of the general public. It improves the physical point of sale marketing experience.
Phygital for online businesses
Why does a phygital strategy make sense?
In addition to its digital strategy, opening a physical store or partnering with a distributor makes sense for more proximity, credibility and commitment with its customers.
Could the hyper-digitalization so much sought after by brands be qualified by a horizon increasingly turned towards the human experience? “Placing the encounter at the center of the game, improving the product and customer experience through a physical store is clearly an added value for a brand that is setting up,” says Valérie Piotte, general manager at Altavia Cosmic. Thus, when the Casper bedding brand in the United States opens a “nap store” in the middle of New York, that Sézane takes the gamble of offering its collections in limited stock in an apartment type “showroom” or that the digital brand d ameublement Miliboo opens a digital store with decoration coaching sessions, the need to live an experience acts as a new lease of life. “You have to come up with an added value proposition in the store on the concepts of exchanges, additional services, live product demonstration in particular”, continues Valérie Piotte. Revolutionizing phygital thanks to a cross-channel experience – e-shop, pop-up stores and corners within multi-brand stores -, boosted by a strong desire for co-creation, visibility, proximity and credibility is therefore gaining ground . But where to start ?
The pop-up store to … attract the light
To try to find a place in the sun, the pop-up store is one of the most accessible and profitable levers to create and grow a community. The Curl Bar, which combines both hairstyling and sales of products for curly, frizzy, and frizzy hair, was able to grow its three pop-up stores between June 2018 and January 2019: “Word of mouth and content a few bloggers enabled me to generate the first contacts. Even a short-lived store boosts the credibility of the project and online sales, “says founder Morgane Brisson, the founder. The seven weeks of pop-ups generated a total of 349 hairstyle appointments and 906 product sales.
Distribution networks for … visibility
Recognized for its pop-up stores emerging in national shopping centers around many concepts (bonnet bar, sock tavern, towel payotte and the latest comer the backpack), Cabaïa was invited to 18 Monoprix points of sale (Paris, Avignon, Nantes, Grenoble, etc.) in March 2019. Strongly present on social networks thanks to its quirky tone, this digital native saw it as a means “to attract 30-50 year olds”. “Being at Monoprix, where the natural flow is strong, is a guarantee of notoriety”, assures Emilien Foirest, marketing director of Cabaïa.
The conquest of new horizons is also the – new – motto of the pure player Panda Tea. While 95% of sales in the tea world are made in physical stores, the eco-responsible tea brand has been selected by the Casino Group to start a partnership in 50 Franprix stores. Dynamic at will on Instagram, the DNVB which claims a million euros of turnover in 2019 for 3 million bags sold and reconciles online and offline since early 2019. “After investing in advertising and digital influence, we decided to take the physical course to gain notoriety, in turnover and above all to refine our model. Our goal is to move towards a concept that it would be possible to consume on site “, summarizes Alexandre Ali, co-founder by Panda Tea.
Create your store to … enrich the customer experience
Creating exchange and conviviality are the parameters that lead brands until then exclusively digital to seize the opportunity to establish themselves in the “real world”. Dusting off the image of the traditional wine merchant by enriching the customer experience is the Petit Ballon’s No.1 argument for diversifying its subscription wine box model. In 2018, the brand opened a digital store in the 15th arrondissement of Paris, an ideal place to get closer to subscribers and attract new customers. A variation of the first store located near the Saint-Lazare train station, born in 2014, but which was mainly intended to house the offices of the start-up. “We wanted to respond to new uses to create a link with customers in the catchment area and have a logistics base to deliver all customers as quickly as possible. If a person wants a bottle within the hour, we must respond to this immediacy, “says Martin Ohannessian, co-founder of the Le Petit Ballon brand. With 100,000 subscribers, 1.5 million bottles shipped in 2018, Le Petit Ballon is aiming for even stronger growth, via this establishment in the heart of a family and shopping district: “This store serves as loyalty, showcase, location. However, online remains our No. 1 channel and accounts for 90% of our turnover “, concludes Martin Ohannessian.
Phygital is all about customer, brand and product experience
Other brands have taken the gamble of opening a point of sale, such as the online mattress specialist Tediber and its concept “The nightclub by Tediber” or, even, the concept of personalized knife Deejo. If it is possible to always order your pocket knife online, by letting yourself be guided in a few clicks, since November 27, 2018, the curious can now venture into the Parisian boutique in the Marais, but also order their precious sesame. with voice, via the disjoe.fr mobile e-commerce site. Distributed by a network of resellers (Nature et Découvertes, Le Campeur), Deejo has ventured onto another path, more tortuous and risky but certainly more attractive: “We need to bring the brand to life more, by giving back the human at the center of the game and with a place that brings our products to life “, explains Luc Foin, co-founder of Deejo. A communication tool more than a desire to generate a precise turnover: “By word of mouth, social networks, we are betting on bringing in foreign visitors. We especially want to arouse interest” , he concludes. Ready to take the plunge?
The store is not dead
Contrary to an urban legend, the store is not dead. Digital has neither killed it nor replaced it. The internet has not turned shops into museums. The Internet has not turned them into changing rooms for a digital platform either.
Real time has changed the business game. Digital and mobility have imposed omnichannel. Today, the shopping day begins with spotting a product in a newsletter received by email, goes through online price comparators and continues in-store to find out while surfing online to find consumer reviews before buying. The phygital customer journey.
Retailers now have all the levers in hand to offer consumers the most innovative and impactful shopping experience. It is on this condition that they will succeed in safeguarding their networks of physical stores.
I would first like to recall a reality: if the internet is in everyone’s mind, the majority of retail sales are done without it. In fact, more than 9 out of 10 retail sales are made physically.
Reinvent a Phygital retail model
The alternative is not between the deterioration of store margins and their disappearance. On the contrary, many brands have seized the phygital opportunity to strengthen their store network by reinventing their model.
Stores must now refocus on what made them successful in order to stand out. The latest sales have shown how digital can support this renewal. Retailers have thus joined forces by offering to book online and then go and try on their clothing or touch their item in store before buying it. Dedicated fitting rooms and click and collect points have been installed. A reserved cash register or a voucher allowing you to skip the line was also part of the adventure.
When I hear some people criticize consumers for checking prices, in stores, on their smartphones, I want to answer: what could be more normal? Isn’t the problem rather that between two businesses of the same brand, one online, the other physical, the prices are not harmonized? That there’s not a phygital connection?
The key to success is to offer customers additional value in terms of shopping convenience and experience. Retailers must link their worlds online and offline and implement an omnichannel strategy that clearly differentiates them from the competition. This is what will allow them to make the difference with fully digital players.
The question of reception
As for shopping centers, their digitalization has so far not been a great success and alliances sometimes courageously attempted have failed. Maybe we missed the basics, which is the experience. What did we do with the favorite purchase? What have we done with the relationship between the customer and the brand?
Customers tell us where it matters most to them. Welcome first. In a phygital world, 67% favor hospitality and advice. One in three asks us for more welcoming and attractive stores. Providing an online experience is good, but if reality does not follow, what are these massive digital investments for?
Take care of the relationship with the client
Digital must now allow sellers the means to sell better by having all the information on the products available on mobile devices. It is necessary to take care of the relationship with the client, to welcome him more warmly and to advise him better.
The physical store must not dissolve in the digital. He must begin his moult and improve his space. Retailers must in particular learn how to better collect personal data in stores. This is easily done by iPads placed in cabins for example allowing customers to immortalize their fittings, to leave opinions or comments, etc …
The in-store experience
How to understand that so many brands are focusing on the idea of giving consumers an online experience while not leaning too little on the idea of revolutionizing the experience lived in their stores? An experience can only be global. The consumer has a phygital experience with a brand on all channels at the same time. There is no distinction to be made between the experience lived in store and that lived on twitter for a simple reason: there is not a twitter reality and a physical reality, there is now only one reality = the phygital reality.
Retailers certainly have an interest in equipping their stores with geofencing, this technology which makes it possible to send messages or push notifications to customers when they enter or leave the stores. This technology reminds us that it is the mobile phone that is the phygital bridge between the digital and the physical, which should under no circumstances be treated as two watertight silos.
Exclusive in-store offers
Technology can guarantee us one thing: retailers have never had so many chances, not only to bring back customers to the store but also to attract new ones.
Shopping in stores should be made easier. In order not to experience the ordeal of queues at the checkout, all salespeople must be able to cash immediately, throughout the store. Finally, retailers must offer services or promotions exclusively reserved for in-store purchases. Offers exclusively available in stores should be offered, they are still very few.
Innovation has paved the way for more secure and efficient dematerialized payment transactions, such as the Lydia application. New payment processing software can also today aggregate a lot of customer data to improve the purchasing process.
Digital highlights the weaknesses of physical commerce
If brands do not want their stores to be irretrievably overwhelmed, they must react and show customers what is interesting to visit in store. Innovation must allow brands to create new phygital shopping experiences that will bring customers back to stores. Digital has not yet replaced the physical store, it has only highlighted its current weaknesses. Phygital mindset and entrepreneurship will boost your business.
While the last 30 years have seen dramatic developments in the way retailers operate and interact with their customers, the possibilities generated by the internet and digital technology have multiplied, from fashion accessories printed on the fly to 3D printers through “big data” as a source of improving customer knowledge. Let’s grab them and build a Phygital future for all kind of businesses.