How to build phygital experiences to connect hybrid consumers

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.

Understanding phygital retail

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.

What is phygital retail?

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.

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.

Who is the phygital customer?

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.

A phygital customer profile:

• 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.

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.

Here are some examples of what shoppers expect in 2025:

• Instant Stock Checks: For customers looking for a specific product, they want to know if the store has it immediately. A store app or website should display exactly how many products are available instore.
• Personalised Recommendations: Imagine customers walking into a bookstore, and a screen shows them books that match their favourite authors. Or, while shopping online, customers get suggestions based on items you recently viewed in a store. This is a personalised experience that customers crave.
• Seamless Checkout: No one likes to queue in a shop. Shoppers expect to be able to pay quickly, and with their mobile devices, regardless if they're buying online or in the store.
• Interactive Displays: In a clothing store, large screens let customers see how different outfits look on a digital model. Tech stores could allow customers to try out new gadgets on secure interactive tables.
• Easy Returns: If customers buy something online and it doesn't fit, they want to return it to a store easily, or vice versa.
• Buy & Send: A customer can physically buy an item in a retail outlet and pay for it instore, then have the item shipped directly to their chosen destination.

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. 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.

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.

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.

Strategies for creating a phygital shopping experience

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.

Use smart technology in physical stores

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.

Create a frictionless omnichannel experience

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.

Personalise the customer journey

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.

Drive customer engagement with experiential retail

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.

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 we see more phygital stores in 2025?

The trend towards phygital retail is moving fast, with notable brands adopting this approach to meet evolving consumer expectations.

• Primark is expanding its Click and Collect service to 186 additional stores across the UK by summer 2025. This service lets customers order products online and pick them up in the store. It makes shopping easier and connects online and in-store experiences.
• The Kettle Kids, a pre-owned luxury watch dealer, opened a new 4,500 sq ft store on Old Bond Street. This move combines online presence with physical stores. It serves customers who want both digital convenience and in-person service.

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:

• 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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