Is phygital an exotic plant?
We hear a lot these days about how drones will take care of our delivery needs in the future, but not so much about the grocery store owned by an e-commerce giant that opened recently in Seattle. A grocery store with walls, floor and stalls, isn’t that a little dated? Not quite—it’s actually a groundbreaking example of phygital retail. It’s not an exotic plant, but a technological marvel!
Bricks and stalls to boost digital sales
In 2013, internet guru Marc Andreessen predicted that the rise of e-commerce signaled the imminent death of physical retail. He guessed wrong. Three years later, Jeff Bezos, heavy hitter for the supposed pure-player Amazon launched its first-ever grocery store in Seattle. Amazon also recently launched several bookstores. Does this mean brick-and-mortar is making a comeback? Well, not exactly. Amazon’s grocery store is nothing like your usual Safeway or Sainsbury’s. Seattle is investing in phygital, traditional retail outlets mixed with a heavy dose of digital technology.
There is no checkout or cash register at “Amazon Go” (okay, it’s not the most original name). Rather, shoppers pay automatically through a mobile app of the same name as they leave the store with their items. No sales assistants, no cashiers, no hassle. Now in 2017, phygitalization has also reached Shanghai, where the Swedish startup Wheelys, famous for its bicycle cafés, has opened an entirely staffless “Wheelys 247” store. Shoppers can walk in and out of the store and pay for their purchases using a free app 24 hours a day, 7 days a week.
Walking and shopping? What a kick!
Let’s not be too hard on Marc Andreessen. Physical retail outlets are definitely being transformed by new, digital trends. However, the internet genius had overshadowed the reassuring side of in-store shopping and the understandable need to “try before you buy.”
There might be a throwback to fruit and vegetable markets, where everything is weighted out by hand and customers inspect their produce for freshness. However, this trend doesn’t account for the fact that even “digital natives” still prefer handling their purchases before paying. Young adults 25 and under are overwhelmingly in favor of the brick-and-mortar store, which according to a recent study is where they do 98% of their shopping. It’s important to note, however, that these shoppers stroll through the aisles with their eyes glued to their smartphones, looking up product information, comparing prices with the competition, and taking and sharing pictures of the products with others as they go. The same is true of more than half of mobile users.
If customers want information and interaction, then that’s what they’ll get. These days, you can go to Sephora and scan their products with your smartphone to search product information, find links concerning their products or learn beauty tips online. If you can’t find the items you are looking for in-store, you can use terminals to schedule home delivery of your favorite Sephora merchandise. Most recently in London, the upscale department store John Lewis opened a location at St. Pancras train station dedicated solely to “click and collect”, where shoppers can pick up products the next day. Two checkout counters are available for any on-the-spot extra purchases that customers might want to make while at the shop.
Suffice to say, the retail outlet itself is changing from a place where goods were once stored to a pick-up location. Is this distressing vendors? Just the opposite. Going phygital is an opportunity for them to shed their warehouse uniforms and become customer advisors and brand ambassadors. Electric retailer Darty provides its sales assistants with tablets, an indispensible accessory containing valuable information to help inform shoppers. When customers update their profile on the company website, the sales staff can even become a personal shopper of sorts, offering truly personalized advice. And this is the real Holy Grail when it comes to phygital retail.
Because another trend is the growing expectation of seamless and effortless personalized service in-store the same as online. To this end, customers are even ready to hand over their personal information to a company if it means preferential treatment in the store or in cyberspace.
Hyper personalization and the end of the store as we know it?
The phygital revolution is set to transform retail considerably, turning shopping at an outlet into a kind of theatrical reenactment of something once deemed necessary. Customers will enjoy personalized greetings, targeted advice, tailor-made special offers and virtual reality changing rooms, all designed to pamper them. As biometric recognition becomes more widespread, personalizing the shopping experience will only speed up. It’s just a matter of time before you won’t even need to give your name to get the royal treatment of reliable, speedy service.
Let’s go even further and think about stores that conform to the preferences of each shopper. Is blue your favorite color? Well, just watch as floor-to-ceiling screens in the dressing room change to match your favorite hue. Welcome to the personal shopping experience of a lifetime, a store with only you in mind. Ralph Lauren already has an outlet that is testing smart dressing room mirrors, which can offer shoppers size or color suggestions based on what they are trying on. Sales assistants use these smart mirrors to help them find items and check their stock, freeing up more time to look after customers.
The very notion of the store might disappear entirely, being replaced with a sort of customer-service/fitting-room center that we visit after purchasing online. And because these personal showrooms will have access to our profiles, tastes and habits, they will even be able to offer related articles that we hadn’t considered but suddenly can’t seem to live without. The future of retail could very well be shelfless. Maybe Marc Andreessen wasn’t so wrong after all!