• Aeho Solutions

Phygital, a new trend for retailers?

Updated: Oct 9, 2019

The more advanced the digital industry is the more choices of sales channels people have. According to Kantar “Vietnam Insight Handbook 2019” we found that in Vietnam millennial is buying from 5.6 channels whereas centennials are bought from 7.4 different channels. Together with the pre-mentioned fact, e-commerce nowadays is becoming more and more dominant. The question for brands is whether shoppers can maintain our customer loyalty as we are following the traditional retail method? To be able to survive in this constantly changing world, every brand should incorporate their two factors "online" and "offline" into each retail product, resulting in the term Phygital.

Phygital, a term that consists of Physical and Digital, is best understood as the incorporation of digital into the real-life experience to create a more unforgettable and top-notch customer’s shopping experience. Nothing is more successful than providing customers with high-quality product information, by means of the new approaching method to increase brand identity. That gives an impetus to marketer’s recognition that Phygital today is considered as a new step - the ace of the traditional retail industry compared to strong e-commerce waves.

Revolution for the traditional retail industry.

Incorporating digital technology into offline stores turns stores into websites - this is how Phygital is operated in today's retail system - a seamless shopping experience.

Take Amazon Go store system as an example. In the past, we have always desired a store in which whenever we arrived, we could just simply walk in, select the product to buy and go; which is now being operated by Amazon. With their "Just walk out” slogan, Amazon Go has launched a store with no lines, no checkouts, no registers and as a result, less complicated procedures.

These stores automatically recognize you thanks to your Amazon accounts and offer products that you are looking for.

Similarly, Burberry - one of the most luxurious clothing brands in the world has attached RFID tags on clothing in 500 stores across 50 countries that can be directly connected to consumers' smartphones, provide information and recommendations on how items are manufactured and are used. RFID is also connected to Burberry’s smart mirrors that customers can interact directly with sensor mirrors to watch videos about products during the fitting time, making purchases more enjoyable than ever, it shows us that no matter the channel you are buying from, product information remains key for the overall shopping experience.

Integrated touch points for modern life

We are increasingly moving towards a trend of minimalism and the needs for integrated service devices. And the way Phygital is successfully applied to business has generated incredible sales.

Tesco Homeplus with virtual store chains is set up on the big screens in public spaces such as subways, bus stops where millions of people pass by every day. They designed the display to be similar to the one on a regular Tesco store. While waiting for the train, consumers can scan the QR code of the products they want to buy and pay by the Homeplus app on their smartphones. The products after being paid will be delivered to the address of the buyer in the day. Currently, there are 22 Homeplus virtual stores in South Korea and the brand is the country's No. 1 online retailer.

Recently, Lazada has launched a new service called Lazada Customer Collection Points which is a seamless and fully-functional technology that allows consumers to order and receive products at 24/7 point of sale. This service makes the time of delivery as well as receiving goods more flexible and easier for customers to choose a convenient place to get their orders.

For Phygital to develop effectively, it requires the brand to manage its product information well. Displayed several times non-standardized and in too many unnecessary channels of information, the brand is likely to offer a bad customer buying experience. From online platform to offline and vice versa, it is different formats and paperwork. Each product is created depending on different customer segments and information format, thus it needs to focus and simplify product information to make Phygital easier. Phygital can be a golden key to help you open the door to success, but it can also be a double-edged sword that causes your loss. Therefore, one should get the hang of this tool perfectly so that it can be used wisely and scientifically.


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