For the last decade, the retail industry has been on an existential search for the future of its own soul.
Consumers armed with smartphones increasingly turned to browse-and-buy shopping from virtually anywhere, flipping the nature of retail on its head. Meanwhile, traditional brick-and-mortar retailers have struggled to find effective ways to keep pace with digital natives and build relationships with newer generations of shoppers.
The media often cast this story in biblical proportions, a modern David and Goliath narrative eyed closely by investors and consumers alike. But the tale didn’t end with the young upstart slaying an entrenched behemoth. It turns out David and Goliath can co-exist. That’s because data has helped recast the rules of the global economy, blurring the lines of how people shop and ushering in a new era of consumer behavior in retail and beyond.
This has been made possible by building a so-called “phygital” bridge between both experiences, extending the journey of shopping across online and offline worlds.
This bridge helps solve for challenges that both physical and online retailers face. For example, brands are finding it difficult to both stand out in the brick-and-mortar environment and retain needed staff to run and operate their physical locations — all while implementing new tools just to manage changing consumer expectations. On the flip side, digital-only retailers struggle to forge emotional connections and loyalty with consumers, and a lack of real-world services with a human touch can be off-putting.
Adopting and leveraging a phygital solution tackles three big industry hurdles, and in current use cases has already shown positive results.
The first is how it leverages digital tools to enhance the customer experience. A stark reality is some 70 percent of online shoppers cannot tell whether clothing they’re looking at will fit properly. A phygital solution can deploy an intelligent dressing room with live scan technology — operable from a smartphone. Use of this strategy improved conversion by four times and delivered a 40 percent reduction in returns.
Another example is cashier-less payments such as mobile self-checkout. Not only does this allow customers to make purchases without facing long checkout lines, but it also supports retailers that may be facing staffing shortages. Furthermore, retailers that enable asset tracking and supply chain optimization can leverage near real-time data compiled at checkout to push out more personalized promotions to consumers, increasing sales and driving up revenue per square foot.
Second, the employee experience can be drastically improved by updating in-store technology and digital signage. For example, deploying handheld, in-store devices provides employees access to real-time data, empowering them to be more agile and effective on the sales floor. And with prices rapidly changing, digital signage allows retailers to adjust pricing right from their keyboard, removing the need for someone to manually swap out tags in-store. Both phygital solutions help employees perform their jobs more efficiently, which helps retain talent and can aid in attracting new talent.
Finally, the role of digital media is hard to understate. Combining online retail with live commerce is one of the more powerful tools yet in the universe of phygital solutions. When people use their laptops and smart devices to tune into live commerce streams, conversion rates have been shown to be 10 times higher than in traditional e-commerce. And businesses are taking note. Since 2020, live commerce has grown by 76 percent.
We’re also beginning to see retailers gamify the shopping experience — both in and out of stores. Whether hosting competitions via a mobile app, encouraging shoppers to spend to earn prizes, or implementing augmented reality- and virtual reality-powered technologies, providing a new way to view and interact with products, gamification increases engagement, leads to more conversions, and falls in line with the direction brands are taking as they prepare for the broadening of the metaverse.
These three solutions — and a bevy of others — are all made possible by powerful technology. The first step retailers can make toward preparing for the next generation of consumerism is to map out a long-term, business-aligned IT strategy. It’s a combination of cloud, apps, data analytics, modern networking, security, and user-friendly tools that will make it possible.
The David vs. Goliath story was never one about being the biggest or having the most stamina. It’s always been about finding solutions amid chaos, being clever, challenging norms, and pushing forward on your own terms — not someone else’s. Retailers for a decade have wrung their hands over the future of their industry. Now is the chance to embrace new digital tools and data to flip the script and forge a new era of success.
Kayla Broussard is the U.S. CTO of Consumer & Travel and a Distinguished Engineer at Kyndryl, an IT infrastructure services provider.View Original Article