Insights|Phygital Retail: Why Brick-and-Mortar Stores are Getting an Emotional Makeover

Phygital Retail: Why Brick-and-Mortar Stores are Getting an Emotional Makeover

Despite its ease of use and $455 billion in sales in 2017, U.S. e-commerce still cannot offer the immersive experience shoppers crave. Brick-and-mortar retailers are capitalizing on this as they reinvent their stores, turning them into emporiums of experience, sensation, and emotion.

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Brick and mortar retail digital transformation
by Sitel staff July 8, 2018 - 4 MIN READ

Despite its ease of use and $455 billion in sales in 2017, U.S. e-commerce still cannot offer the immersive experience shoppers crave. Brick-and-mortar retailers are capitalizing on this as they reinvent their stores, turning them into emporiums of experience, sensation, and emotion.

Whether it’s interactive terminals, mobile apps or free wi-fi, retail brands – big and small – are redesigning their stores around digital innovations and add-on services that resonate with consumers.

High-end department store Neiman Marcus boasts digital “memory mirrors” allowing customers to get side-by-side 360° views of every outfit they’ve tried on, and to transfer the images to their smartphone. Meanwhile, home-improvement and appliance chain Lowe’s has an augmented reality (AR) app letting visitors view the aisles through their smartphone screens to quickly find the exact location of any item for which they’re searching.

Welcome to the phygital retail era

“Retailers are now placing the customer, rather than the product, at the heart of their organization and its corporate culture,” explains Chief Client Officer, Sitel Group, U.S., Mike Small. “The act of buying now comprises emotion, ultra-personalization, surprise, and entertainment. The brands succeeding in making this connection with customers are building loyalty and will be able to use their improved customer experience as a key differentiator.”

This move to greater differentiation is eroding the dividing line between e-tail and retail and creating a new approach. It’s one that combines the best aspects of the online (digital) and offline (physical) world, a new model dubbed phygital retail.

Searching for an emotional connection

The success of low-tech pop-up stores as a support for online retailers is case in point. These short-term retail spaces give a theatrical, physical twist to a digital brand universe and offer unique experiences based around a new product. They generate excitement, surprise and social media chatter in equal measure when one suddenly appears on or near your block.

And, because the average person has never been more digitally connected – we’re now glued to a smartphone for over three hours a day – they’ve never been more receptive to analog forms of stimulation.

Even Apple, the company that ushered in the smartphone age, is introducing controls to help iPhone owners reduce their screen time and monitor how long they’re spending using each individual app. But as well as a break from their devices, consumers are looking for different types of tangible, human contact, especially when it comes to retail.

Major brands, in particular, have targeted this longing and are now building on it further by adding new layers of service and new forms of added value. Often unrelated but always welcome additions to the traditional shopping experience include free coffee, a fun photo booth, how-to classes or in-store product customization.

Adding value to the in-store visit

This is why at Whole Foods, customers can recharge (and take a break from) their phones while they shop. If they go into an Adidas store, they can use a treadmill to try their new sneakers before they buy and can even have a one-on-one with a fitness coach about training and equipment.

They are all services enhancing the customer journey, making it a route people are happy to take. Look at the growing popularity of “click-and-collect” for example. It combines the simplicity of an online purchase with the comfort and confidence of in-store pick-up.

Brands are taking the concept further still, even in the U.S. where the service is still a relatively new concept. For example, Walmart’s partnership with online services provider Handy means that items like flat-pack furniture and wide-screen televisions aren’t simply delivered in a timely manner, they’re also assembled or installed.

From in-store sales advisers to fully-fledged “enhanced sellers”

But innovation and value-added services need to be augmented with the sort of contact and engagement that only well-trained in-store staff can provide if brands are offering a retail experience that really resonates.

The growing popularity of e-tail means that most customer journeys now involve an online component – be it checking a store’s own website, that of its direct competitors, interacting with online communities or fully researching a selection of potential product purchases.

Retailers are now faced with the challenge of offering outstanding customer service both at a distant, digital and at a human, face-to-face level. To achieve this, they are putting their faith in retraining their in-store teams. These personnel have always helped the brand to project an efficient, stable image, but now the skill sets and technologies supporting them must evolve to continue representing a marque in the phygital age.

Multi-channel expertise

Sales advisers have always needed to be familiar with product features, but now they also need to know about the new technologies available in-store. What’s more, if the retailer is multi-channel, those employees need instantaneous access to customer histories, inventory levels and any other business-related data that helps them answer a question or resolve an issue while continuing to represent the brand’s values.

It’s why brands are increasingly equipping employees with connected devices, so they have as much information as consumers. These “enhanced connected sales advisers” also have a determining impact on retailer revenues.

“The ‘enhanced sales adviser’ must learn how to support customers throughout their experience with the brand and know how and when to give that vital bit of ‘human’ advice in the midst of an increasingly digital universe,” says Mike Small. “He or she must use dialog to create a unique, personalized relationship with the customer and also be able to present the new services and technologies offered in-store.”

Whether through staff-training programs, removing friction points from the customer journey or helping brands implement omnichannel strategies that chime with increasingly multichannel consumers, Sitel Group helps retailers achieve the root and branch transformation necessary to ensure they can still compete and stand out from the crowd in the phygital retail age.

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