How to build phygital experiences to connect hybrid consumers

Today's consumers expect more than just a traditional shopping experience.

The rise of ecommerce has 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.  

What is phygital retail?

Phygital retail 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.  

Unlike omnichannel retail, which offers multiple touchpoints, phygital retail ensures that customers can move effortlessly between online and offline interactions without disruption.

Phygital strategies focus on building a seamless connection between a brand’s online and in-store environments so that each touchpoint meets the expectations of hybrid shoppers.

Phygital experience examples in action

Many leading retailers have already embraced phygital strategies.

• Nike uses interactive digital displays in flagship stores, allowing customers to browse online inventories in store.
• Sephora offers augmented reality (AR) try-on tools, letting shoppers see how makeup looks on their faces before purchasing.
• Amazon Go stores eliminate checkout lines using sensor technology that automatically charges customers when they leave the store.
• Warby Parker expertly blends online and instore experiences. They have virtual try on features within their app, but also have brick and mortar locations. People can try on glasses in person, or virtually. Also they can save frame model numbers to their online account.
• Reformation's clothing brand uses touch screens in their physical stores. Customers can use these screens to pick out the clothes they want to try on. This helps the store keep less clothing on the floor, and allows the store associates to focus on helping the customers. ‍
• Primark aimed to expand its Click & Collect service to 186 UK stores by summer 2025, bridging online ordering with in-person convenience.
• Kettle Kids, a luxury watch dealer, opened a 4,500 sq ft store on London’s Old Bond Street, blending digital accessibility with premium in-store service.
• Manchester Brick Specialists redesigned their showroom into a hybrid experiential space, combining tactile displays with digital tools.
• Pop-up and shop-in-shop concepts are emerging as cost-effective ways to experiment with phygital formats.

Who is the phygital customer?

Think of the phygital customer as someone who wants the best of both worlds.  

They enjoy the social aspect of visiting a real store, like trying products, talking to staff, and shopping with friends.  

But also expect the speed and convenience of digital tools to circumnavigate any friction in the retail experience.

A phygital retail customer profile

Think of the phygital customer as someone who likes the best of both worlds.

• Loves trying new tech: They're excited to use apps and touchscreens in stores.
• Wants info fast: They like scanning codes to get product details and reviews right away.
• Values their time: They appreciate things like self-checkout and online ordering to save time.
• Likes a personalised experience: They enjoy stores that remember their preferences and offer suggestions.
• Enjoys the social aspect of shopping: They enjoy going to physical stores with friends and family.  But they also enjoy the quick and easy convenience of online shopping.

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.

Customer expectations for phygital retail

Hybrid consumers are setting higher standards every year.

Here are the features they now see as standard in a phygital retail journey:

• Instant stock checks: shoppers want real-time product availability shown in apps or online before entering the store. ‍
• Personalised recommendations: digital displays or apps suggesting products based on preferences or browsing history. ‍
• Seamless checkout: mobile payments and self-checkout options to eliminate queues. ‍
• Interactive displays: try-ons, demos, and product exploration via digital screens or AR tools. ‍
• Easy returns: buying online and returning in-store (or vice versa) without hassle. ‍
• Buy & send: purchasing in-store but arranging home delivery or gifting.

AR/VR trial experiences as a standard expectation

For hybrid consumers, immersive trial experiences are not a gimmick.

They are fast becoming the baseline.

• 72% of UK luxury shoppers are excited to use AR when shopping.

• 61% of consumers prefer retailers that already offer AR shopping.

• 71% of shoppers say they would shop more often if AR were available.

• AR is expected to generate 63.4% of virtual try-on revenue in 2025.

These expectations highlight why retailers must view AR and VR not as add-ons but as essential parts of the phygital retail experience.

Why blending digital and physical shopping matters

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.

Meeting evolving consumer expectations

Shoppers today want instant access to information, seamless transitions between channels, and highly personalised experiences.

Shoppers want quick, simple, and enjoyable retail journeys. They expect to move easily between online and in-store without losing time or convenience.

Technology has shaped these habits. Consumers now look for tools that let them try, compare, and buy products in ways that feel seamless.

Personalisation is also key. People want retailers to remember their preferences and adapt the shopping journey to suit them. Brands that fail to keep pace risk losing customers to those that make shopping effortless and tailored.

The business impact of phygital retail

‍The implementation of phygital retail strategies presents a significant opportunity for businesses to enhance consumer engagement and drive sales.

The global phygital solutions market was valued at $25 billion in 2023 and is projected to grow at 11.2% CAGR through 2030. The market is expected to reach $52.5 billion by the end of 2030.

In the UK, retail sales volumes rose 1.7% in January 2025 following a decline the previous month. This rebound signals renewed consumer confidence, something retailers can leverage with phygital strategies.

Clicks to bricks is still as effective as ever

‍More ecommerce brands are moving into physical retail because they recognise the importance of tactile experiences and human interaction.

But these stores are not traditional. They are built with digital-first strategies that deliver the best of both worlds.

Defining when physical and digital experiences intertwine will become a key stage of any phygital strategy.

How to create a successful phygital retail shopping experience

Creating an effective phygital journey requires innovative technology, seamless integration, personalisation, and immersive engagement.

Use smart technology in physical stores

• AR and VR tools let customers try products virtually before buying.

• Interactive displays provide personalised suggestions and details.

• RFID and IoT systems track inventory in real-time for accuracy.

Create a frictionless omnichannel phygital retail experience

Consumers should not feel a disconnect between online and in-store.  

Brands should:

• Offer Click & Collect and BOPIS services.

• Provide mobile apps for navigation and exclusive discounts.

• Synchronise stock in real-time across all channels.

Ignoring omnichannel integration costs retailers sales.

According to Salesforce, 40% of customers won’t shop with businesses that don’t offer their preferred channels.

Learn more in our guide to a frictionless omnichannel phygital retail experience.

Personalise the phygital retail journey

• Use AI recommendations based on browsing and purchase history.

• Ensure loyalty programmes span online and offline.

• Send personalised offers to repeat customers.

Drive customer engagement with experiential retail

• Host in-store events and demos.

• Add gamification for fun, reward-based experiences.

• Use pop-ups to generate excitement and exclusivity.

Overcoming challenges in phygital integration

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.

1. High implementation costs: 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.
2. Technology adoption and integration: 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.
3. Staff training and adoption: 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. ‍
4. Maintaining a consistent brand experience: Customers should experience the same brand identity whether online or in-store. Use consistent messaging, visual branding, and personalised customer service across all channels.
5. Data privacy and security concerns: Collecting customer data for personalised experiences raises privacy issues. Implement strict data security measures and maintain transparency in how you use customer data.

Will phygital retail experiences grow?

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 phygital retail will:

• Build stronger customer relationships.
• Increase sales across digital and physical retail spaces.
• Maintain a competitive edge in a highly competitive retail world.

Now is the time to innovate and embrace the future of phygital retail.

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FAQs on phygital retail

What does phygital retail mean in 2025?

Phygital retail is the blending of physical and digital shopping experiences into one seamless journey. In 2025, it means hybrid consumers expect AR try-ons, instant stock checks, and smooth transitions between online and in-store shopping.

Which brands are leading in phygital retail?

Brands like Primark, Sephora, Amazon Go, Nike, Warby Parker, and Reformation are all investing in phygital strategies. In 2025, newer case studies such as Primark’s nationwide Click & Collect rollout and Kettle Kids’ hybrid luxury store are leading examples.

How are AR and VR shaping phygital retail experiences?

AR and VR trial experiences are becoming standard expectations. In 2025, AR contributes over 63% of the virtual try-on market, and shoppers report higher confidence and intent to buy when using immersive tools.

What challenges do businesses face when adopting phygital retail?

The biggest challenges are cost of technology, staff adoption, ensuring brand consistency across channels, and data privacy. Many retailers start small with scalable solutions such as QR codes or Click & Collect before moving to AR/VR.

How is phygital retail different from omnichannel?

Omnichannel offers multiple ways to shop, but phygital retail connects them so there’s no friction when moving between channels. A phygital experience ensures a shopper can browse online, visit a store, and complete a purchase with continuity.