In 2025, consumers expect more than just a traditional shopping experience.
The rise of ecommerce had reshaped how people interact with brands, but physical stores still hold significant value.
Shoppers want the convenience of digital combined with the engagement of in-person retail.
This demand has given rise to phygital retail. This is a fusion of physical and digital experiences that create seamless and engaging shopping journeys.
Phygital retail integrates digital technologies into physical shopping spaces to create a more connected and interactive experience.
Phygital ensures that online and offline experiences work together to provide greater convenience and engagement.
Businesses must focus on building a seamless connection between their online and physical spaces. Each one needs to meet the expectations of hybrid shoppers.
Phygital retail blends digital elements into physical stores to enhance customer experiences. Unlike omnichannel retail, which offers multiple touchpoints, phygital retail ensures that customers can move effortlessly between online and offline interactions without disruption.
Many leading retailers have already embraced phygital strategies.
"Phygital is a journey, not a destination. An organisation does not wake up one day and become phygital. It is a strategy that requires constant evaluation, improvement, and response to the market."
Forbes
Think of the phygital customer as someone who likes the best of both worlds.
They enjoy the social aspect of visiting a real store. Physically engaging with products and getting help from friendly staff is important to them.
However, they also love the ease of shopping online, getting info quickly on their phones, and not having to wait in long lines.
The phygital customer is anyone who wants shopping to be easy, fun, and tailored to them.
Phygital customers are hybrid consumers that expect stores to keep up with the times. Brands need to use technology to close the gap between digital and physical spaces to make shopping better.
Consumers now expect a shopping experience that is convenient, engaging, and tailored to their needs.
Phygital retail helps meet these expectations by combining the best elements of both digital and physical shopping.
Businesses that fail to consider these phygital customer experiences risk falling behind their competitors.
Shoppers today want instant access to information, seamless transitions between channels, and highly personalised experiences.
The implementation of phygital retail strategies presents a significant opportunity for businesses to enhance consumer engagement and drive sales. By integrating digital and physical shopping experiences, retailers can cater to the evolving preferences of modern consumers.
The Office for National Statistics (ONS) reported a 1.7 percent increase in UK retail sales volumes in January 2025. This was after a decline in December 2024.
This resurgence in consumer spending suggests a renewed sense of economic confidence. Something which retailers can take advantage of through strategic phygital initiatives.
Phygital retail represents a valuable strategy for businesses seeking to optimise their operational efficiency and capitalise on consumer spending trends.
More ecommerce brands are moving into physical retail because they recognise the importance of tactile experiences and human interaction.
However, these stores are not traditional retail spaces. They integrate digital-first strategies, ensuring that consumers benefit from the best of both worlds.
Defining when physical and digital experiences intertwine will become a key stage of any phygital strategy.
"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."
From Clicks to Bricks: Why Ecommerce Brands are going Phygital, Sherwen Studios.
Creating a successful phygital shopping experience requires a combination of innovative technology, seamless omnichannel integration, personalised customer engagement, and experiential retail strategies.
Businesses must focus on practical solutions that enhance the customer journey and build brand loyalty.
Retailers must use innovative technology to enhance the instore experience.
Augmented reality and virtual reality allow customers to see products in their real-world environment before purchasing.
Interactive digital displays provide personalised recommendations and product details based on customer preferences.
RFID and IoT technology track inventory in real-time and enable seamless checkout experiences.
Consumers should not feel a disconnect between online and offline shopping.
Businesses can integrate channels by offering Click and Collect and BOPIS (Buy Online, Pick Up In-Store) services.
Mobile apps can assist with in-store navigation and provide exclusive discounts.
Synchronising real-time inventory updates ensures that stock levels remain accurate across all platforms.
Not considering an omnichannel approach will effectively lose businesses cash - be it online or offline. According to a Salesforce report, 40% of customers said they wouldn't do business with companies if they couldn't use their preferred channels.
Using customer data helps businesses create a more tailored shopping experience.
AI-driven recommendations suggest products based on browsing history.
Loyalty programs should work across online and offline platforms.
Sending personalised offers and discounts to repeat customers can significantly boost engagement and sales.
Retailers can make shopping more immersive and interactive by hosting in-store live events and product demonstrations.
Gamification can add an element of fun and reward-based shopping experiences.
Interactive pop-up stores can create excitement and exclusivity around a brand.
"Phygital retail is the answer to evolving consumer demands. By embracing phygital strategies, retailers can bridge the gap between online and offline shopping, catering to diverse customer preferences and behaviours."
TruRating
While the benefits of phygital retail are clear, integrating these strategies comes with challenges.
Retailers need to tackle common challenges like cost, using new technology, staff training, brand consistency, and data privacy. This will help ensure a smooth transition.
Investing in phygital retail technology requires significant capital, especially for small businesses. Start with scalable solutions such as QR codes, digital displays. Or start with simple mobile checkout features before expanding into more advanced technologies like AR and AI.
Many retailers struggle to integrate new digital tools with their existing systems. Choose technology partners that offer seamless API integration to ensure smooth transitions and minimal disruptions.
Employees may find it challenging to adapt to new digital tools. Provide comprehensive training programs and consider hiring digital retail specialists to support the transition.
Customers should experience the same brand identity whether online or in-store. Use consistent messaging, visual branding, and personalised customer service across all channels.
Collecting customer data for personalised experiences raises privacy issues. Implement strict data security measures and maintain transparency in how you use customer data.
The trend towards phygital retail is moving fast, with notable brands adopting this approach to meet evolving consumer expectations.
As technology continues to evolve, we can expect more retailers to adopt phygital. We can expect AI-driven personalisation, increased contactless shopping, and even the integration of metaverse elements into retail spaces.
Blending digital and physical shopping experiences through phygital retail is essential for the future of retail.
Businesses that invest in creating seamless, engaging, and interactive shopping journeys will:
Now is the time to innovate and embrace the future of phygital retail.
Want to explore how physical and digital retail compare? Get insights into the advantages and challenges of each model.
You may also like