Brick and mortar retailers meed to get phygital - ServiceDock Blog

Brick and Mortar Retailers Must Get Phygital

The High Street isn’t dead, but there is no doubt it’s in a period of turbulence. Last year saw numerous high-profile chains fall into administration, including LK Bennett, Forever 21 and Links of London as consumers took advantage of the convenience of online shopping. Meanwhile, customer satisfaction levels have declined for the fifth year in a row according to the UK Customer Service Index (UKCSI). Clearly, survival requires rethinking the way brick-and-mortar stores do business. “Phygital” is a term coined to describe the process of blending physical customer experiences with digital ones in order to optimise the customer journey. The vast majority of high street retailers need to rapidly evolve and become more phygital in order to compete with online competition and maximise the potential of their stores.

Brick-and-Mortar Shopping Remains Appealing to Consumers

consumer shopping preferences The media has made much of the “retail apocalypse” and how High Street will inevitably be destroyed by online competition. However, the truth is far more nuanced. The fact is that the personal touch of in-store customer experience is still highly appealing to many customers, particularly among Millennials and Generation Z. According to one study, 49% of 18-34 year olds prefer to shop for clothes in-store, while 11% prefer apps and 39% prefer websites. 76% of them said they preferred human customer assistance.

Why is the Store Still Important?

These statistics reflect the continuing importance of a personalised experience. In fact, KPMG found that personalisation is the most valuable component of most retail customer experiences. Brick-and-Mortar shops aren’t simply about convenience, they’re about providing an experience where customers can explore and have a positive customer journey. If shops continue to see their primary source of value as efficiency and low costs, they will lose out to online retailers. Personalised communication is what makes brick-and-mortar retail special, and it should be at the heart of CX strategy. The human experience appeals to customers’ emotions, and 85% of Millennials say emotion influences their purchasing decisions. Walking away from an interaction with a positive experience helps to build loyalty, and will even influence customers to pay slightly higher prices for goods and services. Over a quarter of consumers say they would be willing to pay more for excellent service, while only 14% would simply prefer the cheapest options. We cannot underestimate the importance of the customer journey and customer engagement.

Ways Brick-and-Mortar Retailers can become more Phygital

Despite these advantages, stories of bankruptcy, layoffs and store closures abound. How can you protect your business? The retailers who succeed in the current climate prioritise great customer experience. Part of the challenge is maintaining adaptability so that you can keep up with the changing nature of the retail customer journey. That currently revolves around mobile devices but has already seen voice-activated devices becoming more significant. Modern brick-and-mortar stores have been described as “brand interaction hubs”. Using creative, interactive technology to empower your store staff, space and products to engage customers on many different levels will drive footfall and sales. The trap that many retailers fall into is buying the tech and then trying to make it work, rather than assessing the use case and then finding the right customer engagement software to amplify the impact of your products, people and premises. Above all else, retail cannot be boring because boring retailers are becoming an increasingly endangered species. Some areas worth considering and examples of how other retailers are using them include:

Digital Customer Engagement at Store-Level

Beyond the in-store experience, consumers want to be able to quickly and easily engage with your brand on their own time. Facilitating store-specific messaging that connects consumers to the staff in their local store is a new and extremely efficient way to do this. Google Business Messages is a new messaging channel that will accelerate the adoption of messaging as a way to contact retail stores. Google Business Messages feature Questions about returns and general enquiries can be asked using the messaging channels that Millennial and Gen Z customers are most comfortable with (full disclosure: ServiceDock is a provider of this technology). This sort of customer engagement gives the store a new function and regular positive interactions with your staff drives customer loyalty much more effectively than a loyalty card.

Virtual Showrooming

Augmented Reality (AR) and Virtual Reality (VR) are at the cutting edge of customer engagement. L’Oreal Paris now offers an in-store virtual makeover tool, and IKEA has developed an app that lets customers see how furniture will look in their own homes before purchasing it in-store. These tools can be deployed in-store but they’re proving most effective when the consumers can easily use them at home on their own devices. Companies like No Place Like make this very efficient to deploy for retailers (they take the images from your website) and access for their customers (no app downloads required). In categories like furniture for example, these tools can dramatically boost conversion rates (online and in-store) and reduce returns by increasing the level of certainty consumers have that they have purchased the right product before it shows up on the back of a delivery truck.

Endless Aisles

On a simpler level, bringing digital capabilities onto the shop floor is critical. Store associates should have information at their fingertips of what’s in stock in the stores and where it’s not available, be able to order it on behalf of the customer for online delivery. This not only reduces the number of lost sales in your stores, but it also delivers the sort of personal touch that customers remember and are willing to pay a little more for on future visits. Using your stores in this way can also help reduce the cost of acquiring customers online by converting more offline customers to omnichannel customers, which should be an objective that store managers should be striving for instead of fearing the loss of revenue to their e-commerce colleagues.

Let’s Get Phygital

Retail may be in a time of crisis, but those who recognise it as an opportunity to adapt to a new consumer landscape will thrive. Breaking down the obstacles that prevent store staff and e-commerce working towards the same goals (i.e. year on year sales growth) is a key factor in successfully moving from physical to phygital stores. Pitting these two parts of the business against each other is a strategy doomed to failure but getting alignment is a challenge that deserves its own dedicated blog post. Your business can stay competitive with a customer-centric approach that combines personal service with convenient phygital technologies in and out of the store. It’s time to adapt, be creative, and most of all remember that brick-and-mortar shopping is about the retail customer experience and not about the technology. By figuring out what the jobs-to-be-done are and then matching them to digital solutions, you’ll see much better results and experience fewer costly mistakes.
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Brick and Mortar Retailers Must Get Phygital

by Rachel Ferry time to read: 5 min