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The rise of ‘phygital’: How retailers are using tech to modernise the high street



Published On:

January 13, 2022

Published In:

Advertising & Marketing | Industry News

The rise of ‘phygital’: How retailers are using tech to modernise the high street

Achieving a finely tuned balance between physical and digital experiences is essential for the future success of retail. As one of the areas most affected by pandemic disruption, the retail sector has seen rapid shifts in consumer habits — especially the recent mass move towards ecommerce. At the same time, the sector also faces enduring demand for the irreplaceable joys of real-world shopping; the pan-European appetite for in-store purchases is set to remain high over the next few years, and is proving particularly strong in rural towns.  With offline interest standing firm and online browsing increasingly influencing buyer activity at the start of shopping journeys, it’s clear retailers need to evolve the experiences they deliver. By marrying physical stores with digital technologies to create ‘phygital’ interactions and environments, the high street can enter a new age.

Bringing the convenience of digital in-store

Physical stores still have their place in the buyer journey, as seen by Amazon recently opening its first non-food bricks-and-mortar store at the Bluewater shopping centre in Kent. Amazon’s 4-Star Store is so named because the products sold in the shop have received four-star reviews from customers when bought online. The retail giant is also leveraging user-generated content (UGC) from its ecommerce platform to bolster sales in its physical store, including a ‘most wished for’ section based on customers’ online wishlists. But while there is still demand for physical stores, it’s important to cater for new consumer behaviours that have emerged amid the pandemic, such as increased appetite for the ease and convenience of digital experiences. Far from presenting a threat to offline-based retailers, this provides an exciting challenge and opportunity to harness creative ways of using digital tools in physical shops.  One option, of course, is the incorporation of ever-ubiquitous QR codes. The pandemic saw a huge surge in QR code use, as consumers became accustomed to scanning them to order food at restaurants and check-in at venues via the track and trace app; in fact, a 2020 report by Juniper Research estimated that 5.3 billion QR code coupons will be redeemed on mobile in 2022. Some forward-thinking retailers have already started embracing this trend. Ralph Lauren, for example, has begun sewing QR codes into items of clothing to enable consistent tracking across its supply chain. Retailers such as H&M and Danish furniture store BoConcept, meanwhile, are using QR codes in their shopfronts, allowing customers to make a purchase without even entering the store. As well as capitalising on the widespread familiarity of QR codes to reconnect shoppers with their favourite brands, this shows how retailers are also introducing online-level convenience. Indeed, the increased adoption of digital technologies in bricks-and-mortar stores means that both retailers and consumers can begin to think of physical stores as providing a ‘service’, which places consumer needs front and centre. For instance, major brands such as Adidas are adding more streamlined shopping options through its app, including the ‘Bring It To Me’ feature in its flagship store on Oxford Street. Using geolocation within the shop, the tool allows staff to find customers and bring them requested products. This demonstrates how integrating apps and digital features makes the shopping process quicker, easier, and therefore more enjoyable for consumers.

The win-win of augmented reality

Augmented reality (AR) also brings joy to the shopping journey, but it isn’t new in the retail space. The technology was already being used by IKEA in 2017 with the IKEA Place app, which allows customers to see how furniture will look in their homes before they make a purchase.  A study by Deloitte Digital and Snap Inc. last year found that more than 100 million consumers are already shopping with AR and projects that nearly 75% of the global population will regularly use AR by 2025.  During the initial pandemic peak, AR gained greater traction among retailers as restrictions created the need for contactless shopping and social distancing. To adapt for this new paradigm, MAC fitted virtual ‘try on’ mirrors in many of its stores to allow customers to test out cosmetics without having to actually touch the products. Furthermore, luxury clothing brand Browns streamlined its store with AR-infused shopping, letting customers use the Browns app to add items to their physical browsing pile before they visit the store. It offered them a personalised fitting experience as well, complete with their favourite items and smart mirrors that were linked to the app for easy browsing and outfit building in every changing room. In addition to making clothes fittings smoother for customers, such services reduce physical contact, providing both convenience and safe distancing in the post-lockdown world.   Augmented reality is mutually beneficial for both retailers and consumers, marrying the speed and convenience of apps with the physical store. By meeting the needs of those who prefer to try before they buy, it results in a win-win situation of greater product satisfaction for consumers and fewer returns for retailers. 

Experiential marketing and ‘event’ shopping

While the practical side of technology will play a huge role in the new buying era, digitally enhanced shopping offers much more than just convenience. The world is slowly beginning to emerge from various pandemic restrictions hungry for human connection and brand interaction. By turning shopping into an exhilarating and unique event, retailers can capitalise on post-lockdown freedoms by offering memorable experiences worth sharing with others. Moreover, experiential approaches have proven impact. Research shows that 74% of consumers are more likely to make purchases as a result of experiential marketing and 98% create social content at these events. Combined with this high receptivity, the powerful effect of live events can give retailers the capacity to significantly deepen customer ties with their brand.  In 2020, for instance, Haribo unveiled the Maoam Haunted House experience in shopping centres across the UK for Halloween. Customers were guided to the Haunted House via digital out-of-home display screens around the shopping centre. This clever marketing strategy shows the value of creating interactive experiences for consumers, giving them something they can attend with friends and even discuss online, which heightens brand awareness and favourability.  More recently, Zara’s CGI shopfront created an intriguing, colourful display for online users. The ecstatic response suggests that implementing this eye-catching technology in physical stores would be enticing for passersby. The viral video also hints at the future use of digital tools in-store, as well as their potential to make shopping an ‘event’ and breathe fresh life into the high street. Despite the challenges faced by the retail industry following COVID-19, there are many opportunities for brands to keep consumers engaged. Retailers should ensure they are adapting to changes in the landscape and embracing new trends, so they can continue to build quality connections with consumers both online and offline. By combining the physical and the digital to create new ‘phygital’ retail experiences, the high street can thrive once more.

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