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Enhancing Customer Experience in a ‘Phygital’ Future

Jerome Goh

Senior Director, Innovation & Strategy
Blog

eCommerce is now almost universally accepted as a convenient shopping method, with sales expected to reach US$2 trillion in the Asia-Pacific (APAC) region by 2025. Even as physical stores welcome consumers back post-pandemic, digital shopping habits continue to grow and evolve. As a result, many brands’ physical stores and digital touchpoints coexist comfortably today, providing customers with even more choices of shopping experiences.

This coexistence of physical and digital touchpoints is crucial, especially for brands in the APAC market, where 90% of consumers expect brands to have an online presence. Even consumers who purchase offline still refer to at least one digital channel for research while they are physically shopping at stores.

To deliver against these expectations, businesses need to know how to merge online shopping and brick-and-mortar strategies for a unified customer experience (CX) — a concept that EPAM calls Blend Space or “phygital.”

Creating Successful Phygital Customer Experiences

In a phygital world, online and offline channels play complementary roles instead of being substitutes for one another. However, brands often experiment with digital and physical experiences in silos, and thus, fail to leverage the full potential of this retail approach to create outstanding CX.

So, how do brands break down those silos to create an excellent and seamless experience across the various customer touchpoints? Here are three key focus areas that marketers should incorporate into their strategies to deliver great phygital experiences.

1. Make omnichannel a priority Omnichannel experiences have become an indigenous part of the customer journey for both B2C and B2B brands. This is because the retail experience goes beyond the moment of purchase and includes the discovery, evaluation and post-purchase stages. For instance, customers find brands on social platforms, research the brand and product online, evaluate the physical product in-store, and eventually order the product through an eCommerce platform.

The beauty giant Sephora demonstrates successfully how retailers can offer an omnichannel experience. Its in-store experience is heavily supported by technology. Its mobile app uses location-based marketing, recognizing when consumers enter a store and serving them with relevant information such as store maps and deals. In-store makeup artists use iPads to help clients virtually try on hundreds of different shades and styles. If a product is out of stock in-store, a staff member will order it through their mobile device and arrange shipping. This experience does not end when the customer leaves the store. After the product arrives, an email is sent with a tutorial link to help customers get the most from their new purchase.

This scenario not only applies to B2C brands. On the B2B front, buyers are regularly using 10 or more channels to interact with suppliers.

Customers are also increasingly in control of their shopping journey and want brands to meet them on their terms, including connecting with customers on their preferred channels and engaging with them in real time. According to research, 87% of consumers get frustrated when they can’t contact customer service on their preferred channel. This sentiment is especially concerning in APAC, where 71% of consumers say they would switch to a competitor after just one bad customer service interaction. Therefore, creating a seamless experience across multiple channels is critical for successful conversion and customer retention.

2. Leverage your insights — With 80% of consumers in Asian markets demanding that brands connect on a personal level, phygital offers a great opportunity for brands to understand and connect with their customers. Brands have the ability to collect data and meaningful insights that can reveal the how, when and why of customer interactions, which in turn enables brands to deliver a personalized experience each time a customer engages through a touchpoint. These insights can then be leveraged to create bespoke offerings and experiences for customers both in-store and online.

Data analysis also helps retailers make insightful decisions on how to optimally utilize financial, human, and material resources. For example, tracking product conversion rates allows retailers to see which products are selling and when. Retailers can also monitor spikes in relevant internet searches, website visits or online support requests, and determine how best to allocate labor resources.

3. Enhance in-store experiences with online additions — As the physical and digital shopping landscapes converge, brands need to transform their traditional in-store experiences from being merely transactional to truly immersive.

Applying this strategy, a Singapore-based property developer, CapitaLand, teamed up with virtual reality influencer Rae for its 2021 holiday campaign at Funan Mall called “A Jolly Molly Christmas.” Through the campaign, CapitaLand aimed to increase foot traffic and generate excitement at the physical mall and engage with shoppers online through augmented reality (AR).

Phygital experiences are also proving useful for B2B brands to create consistent and connected customer journeys. German bathroom hardware manufacturer Hansgrohe pivoted its annual “Aqua Days” in-person trade fair for distributors and contractor professionals to a virtual event in 2021. The online event first led contractor customers to the company’s virtual showroom app to explore specific products, then to an actual brick-and-mortar showroom to see and touch those products prior to the purchase, and finally back to the eCommerce environment to complete the purchasing process. On the back end, the app is tied to a digital warehouse management solution that confirms product availability and delivery logistics. 

This Is Just the Beginning of the Phygital Era

As eCommerce grows, the future of retail will mean creating a cohesive experience, both online and offline. Phygital is critical to unlocking new CX opportunities and shopping formats, enhancing brand reach and providing a seamless customer journey. This synergy will be increasingly important for converting and retaining today’s customers, who prize choices and convenience and desire a personalized experience.

We see retail evolving further as brands explore modern technologies such as AR and virtual reality (VR) on the pathway to a new world of opportunity — the metaverse, which is forecast to capture up to US$800 billion by 2024. While these are still early days, the possibilities for creating unique and unforgettable CX in the metaverse seem endless for brands.

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