Why Retail’s Future Is “Phygital”

Consumers want the best of physical and digital engagement – and retailers need solutions so they can deliver.

retail trends

ISVs have heard about the importance of omnichannel over the past decade. But in some circles, it’s being replaced by a new trend: “phygital” retail.

Faith Pueneh, front end lead for Women Who Code, explains, “’Phygital’ is a phrase that is becoming more and more relevant when talking about the future of retail. It describes the convergence of physical and digital interactions.”

She says the phygital concept combines the best aspects of digital and physical retail to offer customers a comprehensive shopping experience that fulfills their varied demands and expectations.

It’s the merging of quick access to information and allowing customers to search a retailer’s entire inventory with the ability also to incorporate aspects of brick-and-mortar shopping into the experience to enable consumers to see, feel, and try products.

“Through this integration, merchants can embrace the potential of technology to improve the shopping experience while simultaneously responding to shifting consumer tastes and behavior,” Pueneh says.

Mike Welsh, CCO at Mobiquity, adds, “Retailers are faced with the challenge of meeting customer expectations at every touch point, so diversifying this process to include multiple strategies increases their chances of providing a positive customer experience.”

“Brands are focused on striking the right balance between physical and digital experiences,” he says.

The Phygital Model Leverages Advanced Technologies

Pueneh also points out that tech advancements like virtual reality (VR), augmented reality (AR), and the Internet of Things (IoT) allow businesses to design engaging in-store experiences. “The real and digital worlds are connected by these technologies. Retailers can gain a deeper understanding of customer preferences and behaviors by utilizing data from both digital and physical encounters.”

Welsh says, “Immersive and engaging phygital touchpoints with AR will become essential for brands to keep pace with digital innovation and evolving customer expectations. Blending both physical and digital experiences should align with a retailer’s brand identity and resonate with consumers.”

First Steps Toward Connecting the Physical and the Digital

Phygital retail also builds upon omnichannel processes that consumers have embraced, using all available options to make their shopping experiences most convenient. Pueneh says this includes services like buy online, pickup in store, which allows shoppers to browse and pay online and pick up their orders in physical locations.

She adds, “Highly tailored marketing and purchasing experiences are made possible by this data-driven strategy, which can increase client loyalty and revenue.”

BOPIS is relatively commonplace, particularly after the COVID-19 pandemic, when more consumers’ use of this service increased by 70 percent. However, AR and VR in stores are less common and may represent an opportunity for ISVs to innovate and provide retailers with solutions that are easy to deploy, use, and manage. Retailers may also be searching for ways to integrate endless aisle solutions with both in-store and ecommerce systems to achieve true real-time data, streamline processes, and optimize customer experiences. Innovative ISVs focused on the retail space also have novel ideas for phygital commerce, for example, ways to enhance live video shopping or technology that allows digital shoppers to interact with sales associates.

Ana Milevskaja, CMO at e-commerce platform Productsup, says, “If a brand isn’t embracing an omnichannel strategy, it’ll be light years behind the competition. The majority of retail brands will miss out on sales and customer retention loyalty if they don’t provide a seamless, consistent consumer experience across physical and digital channels.”

ISVs, too, will miss out if they don’t embrace this concept and adapt or develop solutions for the future of retail.

“I don’t foresee a world where we only shop online or in person,” Milevskaja says.

Jay McCall

Jay McCall is an editor and journalist with 20 years of writing experience for B2B IT solution providers. Jay is co-founder of XaaS Journal and DevPro Journal.


Jay McCall is an editor and journalist with 20 years of writing experience for B2B IT solution providers. Jay is co-founder of XaaS Journal and DevPro Journal.