Phygital Shopping Experience -A Definitive Guide

What is Phygital?

Phygital is the combination of technology and marketing experience bridging the gap between the digital and real worlds. But the term is more widely used to entail a shopping experience. 

The customer experience journey is pertinent and critical to the success of Phygital marketing tactics. Investing time to understand how the customer experience journey will shape up as per your wishlist will help. For modern-day consumers, online-only modern-day the digital experiences have to be optimized to give the aha moment to the customers.

The concept of Phygital entails three “Is”

Immediacy – Focuses on making things happen in real-time. 

Immersion – The target users and consumers are involved in the experience.

Interaction – Involves communication within the physical premises of the retail destination. 

The important aspect to consider is the right fitment of technology so that it creates a seamless experience between the physical and digital environments.

Smart Vending machines- Vendify

As per a study conducted by  Bain & Company, despite the rollout of Covid-19 vaccinations in 2021, the luxury market plummeted by 23% (This is the largest drop since 2009) to $79 billion in sales. The executives from the luxury sector who participated in the research have forecasted that a turnaround in revenues reaching at par with the 2019 levels will not be possible until Q2 2022 or Q1 2023.

Despite the downturn, online luxury shopping doubled its share to 23% in 2020 from 12% in 2019. The same is expected to exceed 30% by 2025. The infographic can be accessed here:

The pandemic forced us to pivot for a secluded and digitally oriented life. This has led to the increase of the “Isolation Economy”. The premise behind the same is that people will travel less to take care of their daily needs. The trend is already in place where the likes of Amazon, Flipkart, Reliance have ventured into the delivery of groceries, fruits, and vegetables at the doorstep. We do not need to go to a physical office to complete our official tasks.


How is Phygital transforming the Customer Experience?

As shared above Phygital is the combination of offline and online environments with the integration of the best components to deliver a satisfactory and definitive customer experience. However, the differentiator lies in comparison to other digital customer service approaches with the involvement of multiple channels ensuring a fluid shopping journey.

Despite the integration, of technologies such as AI, ML, and AR into the retail experience, consumers still want to touch, feel and try their desired goods. This implies that interpersonal communication is still a critical factor and brands have realized this consumer behavior by involving EQ (Emotional Quotient) along the customer journey.

For example, let us imagine that you wish to buy a 4K 65” Smart TV from a leading retail chain. But due to the constraints caused by the pandemic, you cannot visit the outlet. So you fix up an appointment with the store via their app. At the fixed time slot you interact with the store executive via a video call and the executive starts giving you a walkthrough of the latest SMART TV SKUs available in the store based upon the choice, budget, and preferences. This can be achieved by leveraging cutting-edge technologies such as AR Glasses and autofocus cameras. You can feel the product and test the features virtually as if you are physically present in the showroom.

The deployment of the Phygital approach is encouraging zero physical contact between the business and its consumers but at the same time creating more immersion and immediacy in the customer experience. Businesses do not have to spend on other channels to support the customer journey. The phygital ecosystem is ideal for Millennial and Gen Z customers, forcing brands to straddle between online and offline to create phygital examples with every interaction. 

How can Brands Transition For The Phygital Economy?  

Develop A Deep Understanding Of The Target Buyer Persona

The consumer behavior has shifted gears in the current scheme of things and will become permanent post the COVID-19 situation when the severity minimizes. They are advancing towards more of an individualistic approach, making it more complex for marketers to succeed. They have to continuously understand evolving perceptions, needs, and beliefs, trying to find ways to utilize them to improve their offering. 

Brands that are focussed mainly on the digital presence will have to investigate more deeply into what their customers are feeling is missing. Physical stores on the other hand can look for avenues where they can include digital components to enhance the customer experience. 

As the saying goes, charity begins at home, data of disgruntled customers can be a good starting point in finding the key pain areas that have been left unaddressed. To unwrap such insights, marketers and businesses will have to design detailed customer journey maps and determine how to make their products more discoverable. Technologies such as the Internet of Things and Artificial Intelligence will be great enablers. The data insights thus extracted will help to make actionable, well-informed decisions.


IKEA, the traditional furniture retailer with 75 years of history, now has a digital platform to co-create products and innovations with third-party designers, startups, and customers. The “co-create IKEA” platform focuses on five areas: Product ideas, Bootcamp, collaborating with university students, and connecting with innovation labs and maker spaces around the world.

Innovation via Communities

Social media platforms have the power and potential to create relevant communities. These communities are great avenues for influencing, sharing knowledge, cross-selling, and gaining loyal customers. Coupled with the physical environment these communities can play a very profound role in creating positive brand equity. These influencers can be beta testers and early adopters for new products and features, helping the company improve customer experience. 

Understand The Goal   

Brands should appreciate the value proposition of such a transition and clearly understand the value that is going to be created. This is an appealing and futuristic solution. At the end of the day, the customer is the king. Modern-day consumers are more technologically savvy and well informed so the onus lies on the brands to create experiences that help them sell.

Balancing the Connection

Phygital is a destination for creating customer delight and experience and only those brands that are forward-thinking will survive. By evaluating and blending the best aspects from both spectrums, businesses will be able to achieve their customer service goals. For customers, phygital has become an alluring standalone platform for product discovery that delivers exemplary customer experiences.

Business Use Cases Of Phygital

Smart Vending Machine-Vendify

Smart Vending Machines

These are populating more and more in developed and developing countries. Whether at the airport, a bank, or a plush mall, a vending machine makes it possible for consumers to instantly gratify their needs quickly and efficiently using digital technology. These are now becoming so commonplace and accepted that most consumers don’t even think about this as a digital experience – it’s just the way things are done. 

Mobile Apps, BOPIS, and Curbside Pickups & Delivery

According to a survey conducted by Mobiquity consumers in the US predicted that they’ll use curbside pick up even more once social distancing has relaxed – up to 125% of their total volume of purchases. The convenience that curbside, online pick-up in-store (BOPIS), and mobile apps offer customers is being embraced more and more every day. As more people get the COVID-19 vaccination and head back into convenience stores, restaurants, banks, and retail stores, the companies that have spent time thinking about how to offer the safest, most convenient experiences will win. 


The concept of Smart Homes is becoming a reality in India too. Voice-enabled virtual assistants such as Alexa have added to the “Digitally SMART” mannerisms among the consumer. But they can be used for more than just playing games or listening to music, or switching off the lights. More companies are creating voice skills to aid consumers with everyday tasks. And just like the other examples listed, it’s common for these experiences to have a digital component that is married with a physical one. 

Phygital Banking

The believers of digital-only banking are changing their minds. They have eventually realized that neither digital nor branch banking alone stands tall to the customer experience (CX) parameters and they must take the ‘Phygital’ leap to exploit the FinTech revolution.”  Mukesh Kumar Bukka Kellton Tech

Banking transactions involve an element of risk and trust simultaneously, irrespective of whether they are retail or business transactions. Contemporary banking in India has transformed a long way in the last twenty years. The change in consumer behavior, neither completely digital nor branch banking can satiate the consumers.

So Phygital banking is being considered a disruptive model. It entails convenience banking, mobile banking, internet banking, experience banking, personalized banking, etc.

The elements needed for Phygital banking are the human workforce and disruptive technologies. Technologies that can be deployed are 

  • XR (Extended Reality) can help create immersive, simulative experiences for customers and provide better training to employees and agents. 
  • Blockchain can support better cash management and implement DLT (Distributed Ledger Technology) in the banking core. 
  • Video conferencing can be used to simplify product complexity and offer financial advice.
  • Conversational AI can be deployed to handle customer queries round the clock where bots deliver humanized experiences to customers.

Such experiences can help reduce costs and improve customer value.

Business Benefits

Customer Delight

Modern-day consumers are fickle-minded. Many of them prefer an online-only mode for shopping and others prefer to visit a physical store. And it could be vice versa also where in-store shoppers will want to buy online and online buyers visit the physical store. According to a study in the US

  • 63% of consumers prefer to shop via E-Commerce and 49% still prefer to visit a physical store.
  • Inside a physical store, 82% of the shoppers will use their Smartphones to check for product reviews.

Phygital can help in giving customized experiences to the customers.

Amplified Sales Revenue

A good and satisfactory customer experience can help to increase sales revenue significantly. As they say, a happy and satisfied customer spreads the word around and helps in creating brand equity.

Safety and Convenience

Customers do not have to travel to the physical store and they can make well-informed decisions from the convenience of their homes or offices. So during the pandemic retailers do not have to worry about the safety of their customers and staff. Touchless/contactless checkout provides another layer of safety for customers who choose to shop in-store. Rather than tapping on a PoS device or handing a card to a cashier, customers can use their smartphone or NFC-enabled card to check out without picking up germs.

Deep Insights Into Customer Behavior

The phygital approach has access to in-store data and online buyers. This combination results in more granular information about the customers. Simply put, phygital means a 360-degree overview of the preferences and purchasing habits of each customer, both online and offline. What this further percolates to is the designing of a specifically targeted and hyper-personalized customer journey.

Inventory Optimization

Keeping the supply chain intact and optimizing the inventory is an essential part of the phygital experience. With data insights about customers routinely splitting orders between online, in-store, and in-between options like buying online and picking up in-store, smart inventory tracking will be able to offer a better experience. IoT technology, smart shelves, and even robotic inventory tracking powered by A.I. are all tools that retailers can use to keep track of inventory — and keep their promises to customers about what’s in stock.

The Future of Phygital

The innovation that Phygital has to offer in times of pandemic is going to stay for long even when it is over. Consumer habits have seen a paradigm shift. In the upcoming future retail will not be able to survive without the future. Consumers will become more demanding. The key to success will lie in making a seamless transition for customers.
VendifyTM is interestingly poised in the ecosystem with futuristic Phygital solutions for smart vending machines. Please write to to know more.

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