Retail: let’s get ‘phygital’!

In the early days of e-commerce, the physical retailers shrugged at the thought of online shops taking over their dominant position: “How can they ever replace the intimacy and physical contact between the customer and the shopkeeper?” Nowadays, it is rather the ‘brick-and-mortar’ shop that needs to keep up with the online competition when it comes to customer intimacy and knowledge.

No, the online retailer doesn’t cheer with you when your favorite football team has won, nor do they give you a heart-felt hug when your dog has died of old age. But Amazon, bol.com and other e-commerce giants do seem to know an awful lot about you and your preferences. More than your random shop attendant who may not even know what two books are targeting a similar audience, and even less if you are that audience.

Reacquaint with the customer

It is high time for the ‘brick-and-mortar’ retailers to catch up with the online competition when it comes to customer knowledge and relevant recommendations. When combining the advantages of the physical shopping experience - actual human contact, being able to touch shopping goods before actually buying them, etc - with the advantages of the digital shopping experience - understanding of the consumer’s shopping behavior, targeted recommendations, timely sales offers - the traditional retail owner may succeed in not only catching up with the online competition, but in overtaking them altogether.

Of course, this does require an investment. On the one hand, you need to invest in a decent analytics platform, which will provide you with all information you need to know about your customers, and the insight in their preferences and behavior. On top of that, you need the necessary tools to apply that knowledge and insight in their physical shopping experience. In order to do that, you need to be able to identify and trace them as soon as they enter your shop. This can be rather easily achieved, eg by linking the customer’s loyalty card with their smartphone thanks to the app downloaded by the customer.

This would be rather: linking customer’s loyalty Program ID and smartphone thanks to the App to be downloaded by the client.

This will allow you to provide your customer with the kind of experience that will make a difference. That you can offer a discount on their favorite type of cereals at the exact moment that they enter this area. That you can suggest the right wine, based on their previous purchases and on the meat that they already loaded in their shopping cart. That’s how you get ‘phygital’.

Welcome in the ‘phygital’ era

Of course we are not there yet, but the technology required to enable such applications is already available. And there are some projects going on as we speak. It’s just a matter of time before we can see the retail stores actually fighting their e-commerce competitors with their own weapons: a profound knowledge of the customer and being able to make the right offer at the right moment.

Meanwhile the e-commerce vendors are planning to open more and more physical stores as well. It is safe to conclude that the entire retail market will become increasingly ‘phygital’. It is hard to predict, even with analytics, which vendor will win the battle for this new market space. But we can predict one winner: the customers. They will have more choice than ever before, in product ranges as well as in the way shop. We, for one, look forward to the ‘phygital’ era!
 

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