Navigating Success in a 'Phygital' World: What Retailers Must Get Right
As digital ad costs continue to climb, it’s no surprise that direct-to-consumer (D-to-C) brands are looking for new ways to connect with customers. However, they cannot take a one-size-fits-all approach to customer engagement. Today’s shoppers are split on where they prefer to engage with brands. In fact, our recent Brand Authenticity Report found that nearly one in three Americans claim to be digital shoppers (30 percent), while almost half prefer the in-store shopping experience. That's why many retailers are turning to “phygital” strategies, blending physical and digital experiences and offering shoppers the freedom to choose the type of interactions they most prefer. They must meet shoppers where they are with the experience they crave.
But how do you create an effective phygital experience? What's the recipe for success? Here are my top three best practices for a phygital retail strategy:
1. Use data-driven insights to optimize channels.
Effectively blending physical and digital experiences requires understanding how customers use your existing channels and what type of interactions they prefer in any given setting. For example, do you know how many are browsing your website while shopping in person at your store? Or how many are browsing your website at home, eager to chat with a customer representative in real time? A careful analysis of customer behavior across channels can provide actionable insights about opportunities to create optimal synergies.
2. Have a presence where it matters.
The goal of a phygital strategy is to deliver content and other communications your customers want by combining physical and digital interactions in engaging ways. While 84 percent of retail sales come from physical stores, other research predicts that 58 percent of U.S. retail sales will be digitally impacted by 2023. This means it's increasingly critical to offer a mix of online and in-store options to attract and retain customers. Again, the right data analytics can help you identify where you need to adapt to ensure you're meeting buyers where they are, either physically or digitally. There's no doubt that having brick-and-mortar stores near your customers can help you directly engage with them, but to be successful, these locations must offer seamless phygital experiences, such as in-store kiosks that offer information about products and customer service help, counters where customers can pick up orders they bought online, easy online ordering for home delivery, or some other combination of physical and digital options. Phygital tactics like this can help you unlock bigger audiences. As you test and evolve your approaches, you’re likely to reveal even more ways you can improve the customer experience.
3. Be consistent.
Consistency is the key to maintaining brand identity in a phygital world. From touchpoint to touchpoint, your customer must have a consistent experience — and that includes interactions post-purchase as well (e.g., following up with an email after an in-store purchase or sending a push notification that an online order is ready for pickup). Artificial intelligence and other emerging technologies can even enable real-time insights that make it possible to appropriately deliver either a digital or physical interaction based on the context of unique customer preferences. Offering messaging that's dynamic, relevant and cohesive throughout the phygital experience mitigates churn and increases your ability to gain (and retain) loyal customers.
In order to keep pace in today’s competitive marketplace, retailers must offer a variety of engaging buying experiences and give shoppers the option to choose the type of interactions that work best for them in any given setting. A phygital strategy that blends physical and digital interactions into one streamlined customer experience can help your brand meet the new expectation of constant gratification and is proving increasingly essential to not only maintain current customers, but also to attract new ones.
Paige O'Neill is the chief marketing officer at Sitecore, a digital experience platform and content hub.
Paige brings over 20 years of experience in senior marketing roles crossing many areas of enterprise software, customer experience, and cloud computing. As Chief Marketing Officer, she combines product marketing expertise with an extensive background in communications and a passion for developing thought leadership programs that build awareness, differentiation, and demand. Prior to joining Sitecore, Paige was CMO at digital workplace platform provider Prysm, where she rebranded the company and helped it transition to a combined SaaS and hardware business. She previously served as CMO at SDL and as Vice President of Marketing for Aprimo, where her thought leadership, demand generation, and communications programs contributed to rapid growth. Paige also served as CMO at PHH Arval and two early-stage startups—Aravo and GreenRoad Technologies. Prior to PHH, Paige spent a decade at Oracle Corporation leading a variety of marketing initiatives.
