Let’s get phygital: embracing the hybrid retail world

It may be hard to imag­ine now in a world of clicks and card­board parcels, but before the pan­dem­ic, a lot of retail­ers were con­fused about who dig­i­tal shop­pers were.

“Many brands treat­ed dig­i­tal and in-store as two sep­a­rate chan­nels with dif­fer­ent KPIs,” explains Ricar­das Montvi­la, VP glob­al strat­e­gy at cus­tomer insights plat­form Mapp. “There was a view that phys­i­cal cus­tomers were dif­fer­ent from those who used ecom­merce. Some even thought that it was online avatars buy­ing up their sofas and their dress­es!”

A digital shift

Covid lock­downs, how­ev­er, changed this per­spec­tive as bricks and mor­tar stores were large­ly closed and every­one moved online. It led to retail­ers ramp­ing up their ecom­merce ser­vices, phys­i­cal retail­ers rapid­ly adopt­ing online for the first time and pure-play dig­i­tal brands expand­ing their capac­i­ty.

This includ­ed more online deliv­ery slots, click and col­lect ser­vices, prod­uct sam­ples being sent in the post and dig­i­tal pay­ment options. “The pan­dem­ic caused the shift towards dig­i­tal retail to accel­er­ate far more quick­ly than pre­vi­ous­ly fore­cast. Cus­tomers had to switch to ecom­merce – even those who weren’t tech-savvy or pre­ferred the in-store expe­ri­ence. They large­ly enjoyed and embraced it,” Montvi­la says.  

When the lock­downs eased and stores re-opened – albeit with social dis­tanc­ing rules still in place – retail­ers adopt­ed addi­tion­al ser­vices such as pre-booked chang­ing room slots and expand­ed online/mobile apps to include prod­uct cat­a­logues. This allowed cus­tomers in-store to browse online and buy using self-serve con­tact­less, touch­less ter­mi­nals, or wait till they returned home.

“Post-lock­down if you were sell­ing cos­met­ics, it was still not pos­si­ble to get peo­ple to try on make-up at the counter,” explains Montvi­la. “But con­sumers adapt­ed real­ly well. They under­stood that they couldn’t use a chang­ing room or try on some lip­stick, but they could still buy and then return the item if unhap­py.”

Phygital growth

As such, there has been an expan­sion in so-called hybrid, ‘phy­gi­tal’ shop­pers – those who shop not only in-store but also online.

Accord­ing to a report on Pri­ma­ry Shop­ping Meth­ods in 2021 from the Nation­al Retail Fed­er­a­tion and IBM Insti­tute for Busi­ness Val­ue, around a fifth of baby boomers and a third of gen­er­a­tion z now shop in a hybrid fash­ion.

“Retail­ers now realise that the per­son who brows­es online and watch­es YouTube videos and the one that comes into the store are the same per­son,” says Montvi­la. “They haven’t trans­formed from that avatar into a phys­i­cal being. Peo­ple are shop­ping across both chan­nels. Maybe some retail­ers thought things would go back to nor­mal post-pan­dem­ic, in that we would all go back into stores, but a lot of the changes we have seen will remain and evolve. That means dig­i­tal, phys­i­cal and hybrid.”

It also means, he adds, that those in the C‑suite have an increased desire to accel­er­ate their omnichan­nel ser­vices. “They are more aggres­sive about spend­ing their mon­ey on inno­v­a­tive and excit­ing tech­nolo­gies,” says Montvi­la.

This includes con­tact­less check­outs, as seen in cloth­ing retail­er Zara and Ama­zon Fresh gro­cery stores. “With the Zara exam­ple you sim­ply put your items in the self-ser­vice check­out, an RFID scan­ner cal­cu­lates how much you owe, and you pay,” Montvi­la explains. “For those who don’t like twid­dling their thumbs whilst the assis­tant folds their clothes it is very wel­come!”

Anoth­er exam­ple is mag­ic mir­rors, which have been utilised by firms such as Char­lotte Tilbury to har­ness vir­tu­al real­i­ty to allow cus­tomers to try on make-up dig­i­tal­ly in-store.

A need for more insight

Accord­ing to a recent report from Mapp – ‘Retail of the Future’ – cus­tomers sim­ply want to keep the ‘con­ve­nience and ease of online shop­ping, yet yearn to see, touch and inspect before buy­ing’. They want a fric­tion­less expe­ri­ence com­bin­ing their online and in-store expe­ri­ences from offers to prod­uct selec­tion and ease of pay­ments.

They also want not just to shop but to enjoy either a com­mu­nal shop­ping expe­ri­ence, such as in-store drink or food tast­ings, or more indi­vid­ual expe­ri­ences, includ­ing per­son­alised styling. Fun is also on the agen­da as retail­ers try to make cus­tomers into fans, not just shop­pers. Toy store The Enter­tain­er, for exam­ple, sends PDF colour­ing-in pages of favourite char­ac­ters to par­ents via email to build excite­ment around the brand.

For retail­ers and their mar­ket­ing depart­ments to take full advan­tage of this shift, they need to know more about the hybrid cus­tomer. They must car­ry out a com­pre­hen­sive analy­sis of not just their grow­ing dig­i­tal cus­tomer base but also the omnichan­nel to opti­mise their strate­gies. Data col­lec­tion, both online and in bricks and mor­tar stores, needs to be enhanced and com­bined into a com­pre­hen­sive cus­tomer pro­file.

Mar­keters have been scratch­ing their heads on how to tru­ly under­stand the cross-chan­nel cus­tomer jour­ney

By doing so, they will under­stand the cross-chan­nel jour­ney and how cus­tomers are inter­act­ing with their brand to engage them with the right mar­ket­ing con­tent, cam­paigns and offers, at the right time in the right place.

“Mar­keters have been scratch­ing their heads on how to tru­ly under­stand the cross-chan­nel cus­tomer jour­ney. They had assumed that their entire dig­i­tal con­sumer foot­print was what­ev­er peo­ple were click­ing on their apps or web­sites. Now those in-store trans­ac­tions and inter­ac­tions also need to be matched and linked with the dig­i­tal data,” explains Montvi­la. “It is very dif­fi­cult for a sin­gle mar­ket­ing depart­ment to look at their dash­boards and under­stand what the hell is going on.”

Solving data confusion

In fact, less than a third of ecom­merce busi­ness­es can iden­ti­fy over 21% of vis­i­tors on their web­site. That’s down to data silos, frag­ment­ed data and not hav­ing soft­ware which knits it all togeth­er.

Montvi­la says this is to the advan­tage of Martech solu­tions such as Mapp, which can pro­vide the nec­es­sary cus­tomer insights both from online and offline chan­nels. The Mapp cloud plat­form offers a 360-degree view of a cus­tomer using mul­ti­ple sources of accu­rate and real-time data, includ­ing his­tor­i­cal pur­chas­es and brows­ing, and behav­iour­al data such as in-store inter­ac­tions and demo­graph­ics.

“As a result, mar­keters no longer need to make deci­sions based on gut feel or intu­ition,” he states. “Through Mapp, they get AI-pow­ered action­able insights which leads to more per­son­alised and effec­tive cam­paigns.”

Indeed, one of Mapp’s key cus­tomers – fash­ion com­pa­ny Vivi­enne West­wood – has used real-time, offline store pur­chase data, and all ecom­merce trans­ac­tions to now iden­ti­fy a third of all its web­site vis­i­tors. This has led to more tai­lored mar­ket­ing cam­paigns and greater cus­tomer engage­ment.

Montvi­la says Martech solu­tions like Mapp can also pre­dict future cus­tomer behav­iour. For exam­ple, “by tak­ing a uni­fied look at a person’s data we can pre­dict that if they order one type of floor­ing sam­ple then they will buy in the next 13 days and spend £1500, but if they order anoth­er type, they will con­vert in two months spend­ing £800,” he explains. “That infor­ma­tion total­ly trans­forms how you speak to the cus­tomer. You cer­tain­ly won’t be giv­ing 50% off incen­tives for those look­ing to buy in 13 days but you could con­sid­er an offer for the oth­er cus­tomer. You can be smarter in your mes­sag­ing and ensure you have a high­er chance of con­ver­sion.”

Montvi­la believes hybrid retail will con­tin­ue its growth surge. “We’ll see more self-check­outs and click and col­lect with dig­i­tal aisles in all stores,” he says. “Mobile apps will evolve from just prod­uct cat­a­logues to help­ing cus­tomers design their new kitchen or find the best make-up. We could also see more real-time mar­ket­ing push mes­sag­ing to give offers to cus­tomers walk­ing around in-store. It’s a phy­gi­tal future.”

Find out more about how Mapp can help you nav­i­gate through the future of retail

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