For a long time, digital and physical retail were seen as opposing forces. Today, they are viewed as complementary. Together, they form what is known as “phygital.”
This concept opens up new strategic opportunities for retailers. For 51% of them, it contributes to their turnover. 57% of French retailers believe that digital boosts local commerce.
Why invest in phygital? How can you turn your store into a phygital one? In this article, we explain everything.
Definition of a Phygital Store
The term "phygital" emerged in 2013 during the e-commerce boom. It refers to a physical store that incorporates digital technology into the customer experience.
Customer support becomes more personalized and can continue beyond the physical location. The goal is to combine the best of physical retail with the advantages of digital solutions.
A phygital store is often the result of a digitalization process, but it can also be built that way from the start. It fits into an omnichannel customer journey. For half of French retailers, developing an omnichannel strategy is a priority.
Did you know? What’s the difference between digital and phygital experiences?
Phygital differs from digital based on the device used by the buyer. If the customer owns the device and/or the functionality (smartphone, tablet, internet access), the experience is considered “digital.” Usually, the customer is at home when placing an order. Conversely, if the device is provided by someone else or the solution is made available to the user, the experience is considered “phygital.”
Benefits of phygital for retailers:
- 93% of retailers observe an increase in average shopping cart value.
- 70% see improved brand image.
- 57% report stronger customer loyalty.
- 50% notice more effective promotion display.
- 43% report increased foot traffic. For 4 out of 10 French shoppers, digital encourages more frequent store visits.
- 39% say their sales teams are more efficient.
How to implement phygital solutions
Augmented reality, geolocation, mobile apps... Turning your store into a phygital one is easier than you think. There’s no single “phygital” model.
Here are several phygital tools and services to consider for your store:
- E-reservation systems: Restaurants, for example, can accept bookings even when closed, notify customers in real-time of cancellations or schedule changes, and better manage staffing and inventory.
- Click and collect: Widely adopted during COVID-19, now used by 91% of stores.
- Product locator: Allows customers to find a physical store where a product is in stock and confirm availability, linking the online and offline customer journeys.
- Interactive kiosks: Like those used by McDonald’s, these enhance the customer experience by simplifying ordering and payment. They can also display your full product catalog—even items not stocked in-store.
- Contactless and mobile payment: 77% of stores offer contactless payment, 49% support mobile payments.
- Self-checkout: Customers pay on their own within the store.
- Interactive window displays: Allow for touch interactions even outside the store. This new window-shopping experience removes entry barriers.
- Sales tablets: Used by 44% of stores to enhance operational efficiency, present offers interactively, handle complex sales, and modernize the brand image.
With dynamic display solutions, content becomes more interactive and personalized.
- 45% of retailers display dynamic content
- 40% programmed content
- 75% statistical content
Digital tools must seamlessly integrate into the customer journey. Digital is considered valuable when it helps:
- Save time (49% of French people)
- Get better deals (40%)
- Receive helpful advice (30%)
Customers appreciate solutions that make the buying process smoother:
- 75% value click and collect
- 56% use self-scanning
- 55% appreciate interactive kiosks
Examples of phygital stores
- Fnac: Offers click and collect and “Pay & Go” (payment via their app). Customers can order via voice assistants.
- Sephora: Provides kiosks for browsing the catalog, tablets for added services, and chatbot reservations. Customers can also listen to podcasts via Google Home.
- Amazon GO: A futuristic example where AI and sensors replace cashiers and checkout lines, offering a fully digitized shopping experience.
The customer journey is constantly evolving, becoming more fluid between physical and digital/social realms. In some sectors, integrating both elements is essential.
3 Key Figures to Remember:
- 71% of stores began digital transformation after the pandemic.
- 77% of consumers finalize purchases in physical stores.
- 93% of retailers say digital directly impacts their brand image.
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