From Clicks to Bricks: Why Ecommerce Brands are going Phygital


AUGUST, 2022

The evolution of Omnichannel: Phygital Retail is on the rise. There's more competition for physical retail space than ever, as digitally-native brands expand into brick & mortar stores to reach new levels of customer engagement.

Clicks to bricks is a business model that endeavours to merge online & offline shopping. Brick & mortar retailers use their ecommerce websites as a tool to attract widespread customers, who can subsequently purchase online or collect their items in-store.

While some retail brands are stuttering, all the hype around the alleged death of high-street retail has been grossly exaggerated and ultimately, proved very wrong. Physical retail isn’t dead, but retail as we know it is transforming right in front of our very eyes.

The modern consumer now typically browses a multitude of channels when shopping for products. Many begin their journeys online, where they can draw comparisons from several retailers in just a few clicks.

However, before a decision is made, consumers often want to see the product in the flesh. This proves once again that this innate, social desire is the biggest advantage physical retailers have over their ecommerce-only competitors.

What is a Clicks to Bricks strategy?

As we've said, clicks to bricks is the process of driving online shoppers towards a physical retail space.

Retailers can have shoppers browse an online catalogue and purchase items in-store. Another option is ordering online and collecting in-store - or BOPIS.

Regardless, the 'phygital' retail experience traditionally begins online and ends in-store.

If retailers only utilise a solely physical outlet, they run the risk of ostracising a potentially huge online segment of consumers. Combining both channels provides retailers the opportunity to implement an omnichannel retail strategy; a retail model that creates a entirely streamlined customer experience across multiple channels and outlets.

Whether a customer's preference is to shop online or go the social distance to the store, their brand experience is the same across either channel.

Digital stores will lay siege to the High-Street

We are now seeing competition in physical retail increasing as digitally native brands expand into brick and mortar stores.

An unprecedented amount of shoppers have flocked back to the high-street in their droves to satisfy their retail therapy cravings.

In the United States, 81% of Gen-Z consumers prefer to shop & discover new products in-store, and more than 50% use in-store browsing as a way to disconnect from the digital world.

Retail Statistics for 2022, Shopify

High-street retail vacancy rates are at an all-time high, and combined with shorter, less expensive, and more flexible lease terms, digitally native brands are taking the leap of faith into the world of physical retail; especially with it incurring significantly less risk than ever before.

Whether it’s a pop-up shop, retail event, or short-term commercial lease, testing the waters of physical retail is an effective way to reach a growing consumer audience who prefers to shop in person.

Dipping your toes in physical retail is also a great way to see if a permanent physical outlet is the right move for your business.

A multitude of online retailers vying for the opportunity to sell in a physical retail space will mean increased competition; so formulating strategies for your physical platform to succeed will be essential - that's where Omnichannel Retail comes in.

Retailers must focus on the new Omnichannel shopping standard

Like how digitally native brands are shifting into physical retail to reach more customers, brick & mortar stores will also need to devise a strategy in order to make both their online and offline channels coincide to deliver a comprehensive, seamless customer experience.

Long touted as the future of commerce strategies; omnichannel is an endgame to combine a brand's each and every channel to create an entirely frictionless shopping experience.

For retailers, finding solutions to overcome physical instore limitations has become a staple of their omnichannel retail strategies. Previously, consumer behaviour was almost dictated by those limitations. Arguably, it was imperative that retailers provided content-driven point of sales across several channels to satisfy consumer desires.

Linear sales outlets like brick-and-mortar stores are now best integrated with mobile commerce, social profiles, and everything in-between to create a fully-fledged shopping experience.

Retailers who adopt and implement a comprehensive omnichannel strategy will ultimately yield increased sales and revenue, and are likely to experience a rise in customer loyalty/retention and acquisition alike.

That’s why, in 2022 many retailers are planning to increase their investment in digital channels to drive sales over the coming year...

According to a commissioned Forrester Consulting study:

  • 49% of retailers say they’ll spend more on their company-owned online store as well as social selling

  • 46% of retailers say they’ll increase investment in their owned custom mobile app

  • 44% of retailers say they’ll increase their investment in livestream selling

  • Investing in tools and technology to unify all your sales channels is vital to stay competitive.

This includes technology to help you:

  • Offer more order fulfilment options

  • Facilitate virtual shopping

  • Activate live chat

  • Enable contactless checkout with QR codes.

- Source: Forrester Consulting Study, Shopify.

Back from the Dead: The Future of Physical Retail

As for the future of physical retail, the more it integrates digital innovations like AR & VR, the sooner we will see these sort of features in-store...but will they function in a physical retail space?

Merging physical and digital experiences and defining when the two intersect will become more significantly more crucial in time.

Prior the not too distant future; retailers will need to their research on any new technologies they choose to integrate into their brand experience. There are (and will continue to be) a lot of flashy gimmicks in new tech, so it's important that retailers ask themselves the following before making the jump: "Does this add to the customer experience?"

The allure of a brand new virtual retail marketplace will likely prove very tempting; more so than getting the basics of optimising business operations right.

Before riding on the waves of any new tech, ensure that the absolute basics of retail operations are optimised and streamlined.

Some retailers are still guilty of overlooking critical failures in their operations when it comes to basic technology capabilities, such as real-time inventory management, mobile apps for customers and wholesale partners, digital shelf labels and UI displays.

Addressing the status of your core technologies will have a greater impact on customer satisfaction and business associate efficiency than, say, a Metaverse application at this moment in time.

'Phygital' experiences are the future of retail. Learning from customer engagement across all brand channels is what will enable retailers to make informed product decisions, and enhance the eCommerce experience. Although, the next phase of retail doesn't necessarily lie in virtual realities. The digital component of phygital needs to be intrinsic to the customer experience, rather than a novelty.

Digital customers should enriched with easier selection processes that ultimately provide an experience that augments brand, products, purchases, and loyalty. Until these new-age 'virtual' experiences transition from novelty to something of meaningful value to retail, they will remain compartmentalised as niche, ineffective experiences.

Virtual experiences will need to be very well connected to their physical versions if they're to succeed. Integrating them into the backbone of a new consumer journey which also includes the physical store - an evolution of Omnichannel strategies.

Arguably, it's debatable the question isn’t “when” virtual shopping experiences will become organic to the shopping experience, or even “if” shoppers are ready to embrace them, but rather “if” developers can design experiences that add genuine value to the shopping experience.

The real phygital experience will rely upon both the digital and physical worlds combining across each other's paths to purchase.

However, it's how new digital innovations contribute to making the retail experience easier and customer centric (entirely personalised to the customer's every want and need) that will be the definitive benchmark for the phygital future.