Transforming retail through ‘Phygital’
The retail industry is going through a massive transformation and we can see that around us in a big way. At various levels, it touches the core of what we do – shop. Whether it is grocery or general merchandise, whether it is fashion or budget shopping – the dynamics are changing rapidly. The most obvious change is the rate at which retail is becoming digital. eCommerce, as it is popularly known as, is revolutionizing everything.
There is no doubt that digital is here to stay and it will power almost all operations of business in the near future. That being said, it is important to note that the level of online penetration in each country varies, depending on a number of factors. The question is how can we increase digital adoption in a market? What is the force driving digital in retail? Quite interestingly, it’s the physical that drives the digital in this business.
A holistic overview of global retail industry reflects that consumer shopping preferences and behaviors are not unwavering. As per industry estimates in 2017, e-tail amounted for approximately 2.5 percent of the $672 billion Indian retail market. Even in the US, e-tail contributes less than 10 percent to the retail market.
Therefore, to be future-ready and successful, retailers should be invested in creating compelling customer experiences that is seamless between their online sites and physical stores. Let’s take a closer look at the undercurrents of the current retail ecosystem.
Merging Digital and Physical
It’s true that digital has changed the underlying mechanics of how the retail ecosystem can operate and serve its customers. For customers, shopping is an experiential journey. It is believed that the ratio between the physical and digital will stabilize at some point and there are many businesses making their investments based on this. However, I subscribe to the perspective that we will evolve into a new phase of omnichannel buying experience, transcending both the physical and the digital retail spaces. This is the disruption that is awaiting the age-old market and those who dominate that market will lead the retail of tomorrow. In the world of retail, we use a term to describe this collaboration of physical and digital – ‘Phygital’.
The emergence of the term ‘Phygital’ redefines the confluence of physical and online shopping. It’s all about applying the digital formula across physical and digital channels, across operations and the very way a business manages its operations. Today’s hyperconnected customers no longer differentiate between online and offline experiences. They want the liberty to choose, as the mood takes them, from the numerous channels offered by a particular brand (apps, websites, shops etc.)
Creating seamless customer experiences
The future of retail is deeply based on how businesses can innovate in curating unique shopping experiences for customers. In the ‘Phygital’ world, the retailers deploy a smart trick – going completely
digital without discounting the feel of shopping for the customers. The organizations are leveraging the technology infrastructure to help the “unconnected” make the necessary digital shift, and deliver best of both the worlds.
For example, online grocery is a key area which will be heavily affected by this disruption. Let's imagine a typical suburb in the U.S, where a busy family is trying to shop for groceries. Today, there is an app that allows you to quickly shop using your predefined, recommended or searched list of products! All you have to do is, go ahead and select a pickup time from your nearby familiar store, where you have shopped before, make a payment and that’s it. Your shopping is done.
Now, let’s re-imagine the same scenario. You are looking forward to wrap up your shopping at the earliest and at the store, the employee picks the grocery for you, creates an order and has it ready for you. The moment you drive into a special lane in that store, ‘geofencing’ alerts a store employee who simply transfers your order to your car and in less than 5 minutes, you are on your way.
The road ahead
There has been no better time for retailers to redefine the boundaries of online and physical retail. By using the omnichannel strategy, enterprises are utilizing the best of digital and eCommerce with brick-and-mortar stores to render a new world of entertainment and utility services, luring more customers to the phy-gital side. This trend is going to stay and, in a few years, retail will be neither be digital nor physical – it will be Phygital.
