Retail has always been a hugely customer-centric industry. But Covid-19 has redefined consumer expectations. Whether it’s large retailers adding digital technologies to their physical locations or digital-first brands venturing into brick-and-mortar, Covid-19 has accelerated the need to combine physical and digital elements in retail otherwise known as phygital retail.

The internet has given consumers access to endless shopping options, and the proliferation of mobile devices has put offers and information at their fingertips—anywhere, anytime. According to a PWC 2021 global consumer insights study, shopping via smartphone keeps climbing steeply, gaining 2 percentage points on in-store shopping just since their March 2021 Pulse survey and more than doubling since 2018.

With consumers now able to make purchasing decisions at any point along the customer journey, a phygital retail strategy is more important than ever. Mobile wallets are no longer a ‘nice to have’—they’re an essential component of the everyday shopping experience.

As retailers begin to emerge from the impact of the pandemic, digital technology will be essential to give customers a seamless and consistent experience across every channel and device.

Developing a phygital retail strategy has many benefits for both retailers and customers and I have outlined three of the most common advantages below.

Improved customer experience

Streamlining the in-store and online shopping experience simplifies the buyer’s journey, making it more convenient for customers to interact with the retailer across various channels and at any time. 

With phygital retail, customers can choose their preferred shopping, payment, and order fulfillment methods. More flexibility leads to a better customer experience, more sales, and increased brand loyalty. Now some retail brands are crafting strategies that deliberately blur the physical and digital worlds.  For example, Snap Inc recently bought up Vertebrae, a tech business that helps brands create 3D models of their products for customers to view and interact with, in a move thought to bolster its own augmented reality shopping aspirations.

According to a report in The Verge, Snap is increasingly focused on becoming a home to AR shopping, as seen by a recent collaboration with Gucci which allowed customers to ‘try on’ the brand’s limited-edition sneakers to drive purchases, and the recent unveiling of its latest pair of AR Glasses – Spectacles 4.

Offer personalised recommendations

Shoppers are increasingly distrustful of the offers and information they receive. In fact, they are actively researching reviewing, reacting, responding and evaluating what brands are doing for them as individuals—particularly during these difficult times.

The breadth of information available to savvy consumers means that stores can no longer rest on their laurels when it comes to arbitrarily high prices or a lack of transparency.

For marketers, this change in consumer behaviour in such a short time is huge. Shopper trends are emerging faster than ever, and insights are becoming quickly outdated as consumers look for different products in predominantly digital ways.

By centralising data points captured across various purchasing points online & offline, retailers have a chance to truly deliver on emotional relevance rather than relying on mass ‘cookie cutter communications’.

According to McKinsey, brands that have successful personalisation programs yield more engaged customers and drive up the top line. In general, a positive customer experience is hugely meaningful to a retailer’s success: it yields 20 percent higher custom

As a result, there will be a focus on highly specific, smart targeting, right down to the area individuals are in at that specific time. This empowers retailers to localise their offers and messages, making the transactional process across the entire purchase journey more targeted and informative. In turn, this type of outreach helps individuals feel listened to and valued, and drives an emotional connection that results in loyalty.

An example of this is, Kathmandu wanted to increase its customer base and sign up new customers to its Summit Club scheme. In parallel, they were looking to inform new and existing customers about promotions and member-only offers and develop more meaningful relationships with members. Kathamndu partnered with Stocard to help target customers who came into the Kathmandu store but who haven’t yet signed up to the Summit Club program.

Through the Stocard app customers were sent a message to sign up to the program and received personalised offers and communications. As a result of the campaign, Summit Club members received a more personalised digital experience from the brand and personalised promotions via the Stocard app. The six-month campaign led to a higher than usual 10.3 per cent activation rate from new sign-ups.

Boost brand loyalty

Increasing brand awareness, enhancing the customer experience, and personalised marketing strategies will naturally boost brand loyalty.

From in-store to online, retail loyalty programmes need to be stitched together to create a frictionless buying experience. With so many fragmented touchpoints to consider, mobile platforms are crucial to obtaining a real-time, 360-view of individuals.

For example, Stocard can combine GPS tracking with the retailer’s loyalty card, to enable retail marketers to offer customers personalised promotions based on previous purchase history, and online and in-store shopping behaviour. Rewarding a customer’s loyalty is essential, as is targeting them as individuals. According to a recent study by Stocard, 59% of Australians feel more loyal and connected to the brand as a result of the loyalty programs with more than three quarters (78%) saying they shop more often when they are getting close to earning a reward.

Mobile is also fundamental to attracting those who are not part of a loyalty programme with a specific retailer. Once an individual enters a store, the same analysis can be made on where that person walks around in-store, the stopping points and logging purchases – all in real-time and anonymously.

This is comparable to analysing website traffic of a person who does not have an account with a retailer. Furthermore, if the customer opts-in to share their contact details, retailers can send personalised promotions based on their in-store activity.

In 2021, what we’re seeing is a coming to the middle, where neither bricks-and-mortar nor online pure play is the optimal solution. To be successful, retailers need to provide a truly phygital experience for customers. Retailers who are not providing an integrated physical and digital experience for their consumers are at risk of being left behind.

Radinck Van Vollenhoven is managing director of Stocard Australia and New Zealand.