Businesses that want to stay competitive are adopting a phygital model to address these demands through the holistic integration of offline and online retail.
By Ramakant Sharma
Convenience and trust with tactile experience sells. This was the mantra that fuelled the growth of online retail, which led to retailers adopting an omnichannel strategy, and has most recently led to the development of the ‘phygital’ model. According to a study by Deloitte, millennials will constitute 64% of the working population in India by 2020. Their expectations from retail experiences are characterised by the need for convenience, value and interaction. Businesses that want to stay competitive are adopting a phygital model to address these demands through the holistic integration of offline and online retail.
Trends in ‘phygital’ retail
Phygital retail is blurring the lines between tangible and intangible retail experiences to offer consumers the benefits of both. There is increased attention given to improving in-store experiences through the use of technology.
Virtual and augmented reality is being used to bring the online experience closer to consumers, while improving the in-store experience. It allows retailers to better influence the customer decision process. The adoption of ‘magic mirrors’ by the apparels and cosmetics industry is one example. These are powered by augmented reality to allow customers to virtually use products, aiding the purchase decision process and promoting the cross-selling of various products based on individual preferences.
The travel industry has used virtual reality extensively to create an immersive experience for prospective travellers, allowing them to experience various locations within the confines of a store. For instance, Qantas Airways allows prospective travellers to visit Hamilton Island with the use of VR. These technologies are also being used in the home interiors industry, with players allowing consumers to envision furniture and décor items from their homes or the ‘live living rooms’ in stores.
Use of biometrics, including thumbprints, iris scans and voice recognition, has been adopted by retailers to offer consumers a seamless and convenient consumer experience. Thumbprints are being used to make purchases online, and the voice recognition software in IoT-enabled devices such as Amazon’s Echo help consumers place orders easily. The creation of biometric databases and registers would further pave the way for easy adoption of these technologies by retailers.
The use of live chats to improve grievance redressal, location-based push notifications to incite purchases by consumers in close proximity to a store, and the introduction of cashier-less shopping are additional examples of what retailers are adopting to stay ahead. Adoption of these technologies would be seen as ‘the new normal’, and those averse to this would be left behind.
The use of smartphones has created opportunities for brands to offer immersive experiences through mobile applications and other AR-VR based gimmicks. The portability and ease of use associated with smartphones will lead to widespread adoption of phygital technologies in retail, and allow businesses to strengthen their digital reach while promoting convenient, lower-cost channel options for customers.
We would also see instances of highly personalised in-store experiences. The use of facial recognition and other biometric software would enable retailers to recognise consumers, access their ‘dynamic personas’ and gain access to their preferences. This would enable retailers to guide them to particular sections of a store that they would find interesting. For instance, an individual looking for jackets at an apparel store could be directed to the exact aisle that carries these products, leading to a convenient and seamless in-store experience. While this is yet to be fully implemented, the scope for these technologies is an exciting prospect for both retailers and consumers.
(The author is co-founder and COO, Livspace. Viers are personal.)