The future of retail is written in phygital and omnichannel terms
The philosophy of a unified customer experience necessitates the convergence of digital and physical shopping experiences.
Today, the global retail industry is facing the “perfect storm”. The pandemic has profoundly changed not only shopping habits but also the expectations and values of consumers, as they no longer exclusively shop online or only in physical stores. The current shopping journey is “phygital” and is guided by an omnichannel approach that blends e-commerce with the in-store shopping experience. Younger consumers, in particular, seek a more personalized, if not entirely customized, shopping model.
The success of retail businesses depends on their ability to provide a combined digital and physical experience, with “phygital” solutions being the optimal way to satisfy today’s demanding customers who are constantly online. Given these circumstances, the future of retail is already being written in digital terms, with the integration of technology becoming increasingly crucial for attracting customers back to physical stores and creating unique shopping experiences.
Advanced technologies such as virtual and augmented reality, artificial intelligence, and data analytics have become invaluable allies for retail businesses, allowing them to create personalized offers for each customer, improve the payment process, invite customers to visit the business repeatedly with new incentives, and more. It is no coincidence that out of the projected $1.19 trillion in global retail sales during the holiday shopping season (November-December 2023), $200 billion will result from actions and experiences supported by artificial intelligence (Salesforce).
Through phygital solutions, retail businesses can harness the potential of technology in the effort to integrate physical and digital channels. By leveraging phygital solutions, they can provide physical stores with an exceptional customer experience through technologies such as digital kiosks, digital screens, QR codes, and smart mirrors, emphasizes Deloitte in the study “Global Powers of Retailing 2023: Shaping the Store of the Future.”
From analytics to the in-store customer experience
In an era where technology is now essential for enhancing customer loyalty and promoting business success, it is not surprising that businesses achieving better performance than their competitors are those that implement practices aimed at optimizing the customer experience (CX) using analytics and artificial intelligence technologies.
Digital cash registers where customers scan and pay for products, virtual product try-on experiences using augmented reality (AR) and artificial intelligence, smart mirrors displaying information about products – these examples are not visions of a distant future but innovations that the global retail industry is already investing in. More than one in two retail businesses plan to increase their investments in CX technology by at least 25% over the next two years, according to research by MIT on behalf of SAS (“Delivering Experiences That Win Business and Build Loyalty: CX Champions Share Their Strategies”).
It’s no coincidence that the top 10 players in the global retail industry for 2023, according to Deloitte’s research, have leveraged modern technology solutions to strengthen both the digital aspect of their physical stores and to develop and enhance alternative omnichannel experiences.
What consumers want
These technological tools serve both consumers and businesses by optimizing in-store operations, such as contactless transactions, self-service options, and electronic payments. These processes have become essential as consumers have become more selective in their purchases, setting high standards and demanding a shopping experience that includes flexibility, innovative technology, security, and convenience, whether they are shopping online or in physical stores.
It’s no coincidence that, on average, 3 out of 4 consumers in Europe state that they would abandon a purchase if they had to wait at the checkout for more than 5 minutes. Furthermore, 3 out of 5 now use self-service checkout kiosks to expedite their transactions (according to PayPal).
What the status is in Greece
Following international trends, Greek consumers are choosing to make their purchases both in physical stores and online, seeking an omnichannel shopping experience. Today, although 76% of Greeks make their purchases online, they desire a more “phygital” shopping model (Focus Bari and Plushost).
According to the same research, Greek consumers prefer online shopping due to better prices and offers (74%), time savings (62%), and avoiding the need to travel to physical stores (55%). Additionally, 50% say they shop online because they find a wider range of choices, and 49% mention that online orders save them from waiting in queues at physical stores. When it comes to physical stores, consumers choose them for immediate product pickup (69%) and the physical interaction with the product (65%).
In an era where consumers have high expectations, payment methods are also becoming a key point for the retail industry. This is leading businesses to upgrade their equipment to support all payment methods. In Greece, for example, while debit cards remain the most popular payment method (60%), digital wallets (e-wallets) are gaining significant traction, making in-store purchases just as easy and fast as online ones.
According to “Focus on Tech Life Tips” by Focus Bari, the use of e-wallets in the Greek market has surged by 146% in the last two years. While only 6% of consumers paid with a digital wallet in the first half of 2020, today, this percentage has reached 14%.
So, in Greece too, retail businesses are called upon to undergo a true revolution in their purchasing model. This revolution will offer a seamless omnichannel shopping experience to serve the customer better.