The retail sector is reinventing itself. It’s going through a rebirth that’s both reactive and proactive, and the ultimate outcome remains uncertain.

However, one thing is certain: traditional retail – brick-and-mortar style – clearly understands there’s a global industry shift taking place.

It’s a shift from traditional ideas and practices involving sales processes and branding to recognition that the “new retail” is all about customer experience.

The implications of the shift are far-reaching, but the process can be positive and exciting

The “Phygital” Experience and the Rise of Hybrid Retail

The term “phygital” is another of those made-up words we use to describe something new, something for which no better term exists.

“Phygital” = physical + digital.

Of course, the word isn’t completely new, at least in terms of the underlying concept and its relationship to another great buzzword: omnichannel. Where the latter refers to the idea of retail sales access across differentiated channels, phygital seems more cohesive and focuses on the quality of the consumer experience.

Some have been using the term to describe the hybrid model new retail is adopting. That model attempts to combine the immediacy and involvement of the digital experience with the physical and emotional interactions customers find through brick-and-mortar retail purchases.

Stronger branding, enhanced interactivity, and the combination of truly engaging digital marketing and human connections drive the phygital experience in the new retail.

Consumer Rising: It’s ALL About Customer Experience

So, here’s the deal.

Brick-and-mortar retail is not dead.

It’s evolving, morphing into something new, something that will bring value to consumers in new ways that narrow the gap between traditional retail and the online shopping experience.

Nobody really expects brick-and-mortar retail to vanish any time soon. The fact that online markets have expanded dramatically in recent months and may continue to do so doesn’t diminish the importance or sheer size of conventional retail.

It’s true that the expansion affords consumers more options. The surge in online shopping has opened new digital markets and strengthened existing demands, but it’s also had the effect of waking up traditional retail to the unique opportunity for change it now faces.

In fact, current data reveal that consumers are starting to return to their favorite retail outlets in the wake of the pandemic. However, anyone who’s sane recognizes that the pandemic may not actually be over yet, so there’s still a sense of “temporariness” in the lives of consumers.

That’s understandable, just as it’s understandable that the relief many consumers feel about the worst apparently being over has led to increased brick-and-mortar retail activity in recent weeks.

What we know today is this. In changing its primary focus, traditional retail is moving quickly to strategies that enhance the customer experience. These include contactless payment, direct or curbside delivery service, in-store digital advertising, kiosk technology, and immersive digital presentations designed to entertain and educate customers in-store.

The human element is still present, but increasingly, the job of in-store staff is (or will become) to explain, educate and enhance the in-store customer experience.

These functions go well beyond merely answering consumer questions or taking payments. Customers are forming expectations that in-store experiences will improve constantly and consistently, and that the improvements will extend to logistics, information access, retailer transparency, and other areas.

There’s more.

Loyalty programs are changing to provide stronger incentives to consumers to return to store-based purchases. Traditional retailers are waking up to the realization that they can create stronger bonds with their customers through better intelligence, better data gathering, and direct contact with customers, just as online retailers can.

They’re coming to understand that they can offer consumers the best of both worlds.

Crucial Changes in Focus: Localisation, Safety, Convenience and Context

The shift to the new retail also involves some crucial changes in retailer focus.

As part of the push to personalize the customer experience in ways that tie offerings to brands, retailers are recognizing that localisation is critically important. Consumers who regularly use specific local or regional retail outlets will have concerns that may not apply across a broad geographic area, or across the consumer base of an entire retail chain.

Retailers are also having to rethink in-store systems and logistics to maximize consumer safety and minimize health hazards. This shouldn’t surprise anyone after COVID-19. But the real challenge is to address these concerns so as to enhance the quality of the customer experience without turning the issues into distractions.

Anything done for localisation and safety must also be convenient from the consumer’s perspective, and MUST fit seamlessly within the “in-store context” of the new retail experience. Such elements must either contribute directly to the experience, or be invisible to consumers.

Shifting Gears: Conscience and Sustainability

We think it’s safe to say that in the past, most retailers didn’t take the long view regarding sustainability and publicly sensitive issues. They were mostly concerned with matters of conscience, sustainability, and the public’s benefit only when showing concern was good for public relations or addressed a current hot-button issue in the larger community.

Their thinking was, at best (and if we’re being really kind about it), minimalist. It didn’t really matter whether the issues related to country of manufacture, materials used, labour practices, or politics. Too many retailers took short-term positions that involved doing just enough to address the issues superficially or appease those who were concerned.

News flash: those days are ending. Quickly.

It isn’t only online shoppers who are demanding greater sustainability, and a greater sense of honesty, transparency, and commitment from retailers. Whatever the origins of consumers’ heightened expectations in these areas, the new retail has recognized three key points.

  • Firstly, lip-service to areas of consumer concern is no longer enough. People are more prepared than ever to walk away from manufacturers and stores (both brick-and-mortar, and online) who fail to meet their expectations in these areas.
  • Secondly, the public’s concerns and expectations need not be directly about a specific retailer’s products or supported manufacturers. They may instead touch on issues such as diversity, political affiliations of owners, public recognition of specific issues or interest groups, the activities of an entire sector or industry, and more.

And the reality is that you’ve got to be prepared to address it honestly, creatively, and effectively if you expect to keep customers coming back.

  • Thirdly, and most importantly, the need to address consumers’ concerns in these areas is NOT a burden, an added but unpleasant challenge, or an immovable obstacle to success. It’s not a headache for online vendors, and it’s not a headache for the brick-and-mortar folks. It’s a mile-wide opportunity to make valid concerns – and your solutions – part of the customer experience.

That experience is, after all, supposed to entertain, educate, enlighten, and strengthen brand. Brands need to make addressing these concerns meaningfully part of their story AND part of their history.

If you’re clever, careful, and forthright, you can turn just about any apparent problem into an advantage.

As long as you’re honest, genuine, and transparent in terms of how you go about it, you’ll keep winning.

Final Thoughts

Obviously, the new retail and the current paradigm shift affect both brick-and-mortar retailers and online vendors.

Whatever the market balance between physical stores and retail websites is currently, it’s going to shift as markets continue their efforts to cope with changing circumstances, from sourcing and supply chain issues to international relations to global health concerns.

The thing to remember is that traditional retail and online retail aren’t mutually exclusive.

There’s room for both, and both must address the new retail experience consumers increasingly expect. Each offers elements of experience the other can’t, and they address different needs and different markets that frequently overlap.

There will be new and developing market strategies that are unique to each.

It’s getting interesting out there. We’ll keep an eye on things, and of course, we’ll keep you informed.

Reach out to Purple Dot

We’re believers in improving customer experiences in online transactions. In particular, we can help with your shoppers’ interest in controlling their transactions and getting the best prices they can. If you’re an online retailer, we can help you offer your customers an enhanced shopping experience and a greater sense of involvement through our smart discounting solution.

If you’d like to learn more, reach out to us today through our website. You can talk with us by email, phone, or live chat.