The word “digitalization” has become much more egalitarian in recent years. And rightly so: now is the time for the advent of phygital, David Mingeon, Deputy Director General of Havas Paris explains :
“The proliferation of technological innovations has enabled phygital to take a foothold in commerce. Whilst many people believed that e-commerce would wipe out the high street, it is now a hybrid form of commerce which is emerging between on and offline. This new dealing of the cards opens the way for new alternative players and novel practices”.
Charlotte Journo-Baur, the CEO of Wishibam, believes that phygital represents a mixture of “physical, digital and first-hand experience”: the perfect mix to help retailers renew sustainable profitability!
Definitions of the word are often vague and misunderstood, but it is worth our attention because these days, the digitalization of points of sale (also known as web-in-store) has become almost mandatory. The issue today is to put customers back at the heart of every interaction and every decision.
PHYGITAL, THE DIGITALIZATION OF POINTS OF SALE
The arrival of e-commerce platforms has changed our shopping habits. Online shopping is convenient, simple, smooth-running and rapid, making the system increasingly popular with consumers.
According to a study by FEVAD (Fédération du E-Commerce et de la Vente à Distance), 37.5 million French people buy online, which is almost 85.5% of internet users. In 2017, the turnover from online shopping was estimated at 87.5 billion euros. This increased by 14.3% between 2016 and 2017. Spectacular growth which has come about because of the convenience, immediacy and flexibility offered by online shopping.
Online shopping turnover in 2017
Growth in online shopping turnover between 2016 and 2017
However, the rise of online shopping has made us more demanding. Today, we no longer want to go shopping in stores unless there is an element of added value behind our visit. We seek an omnichannel purchasing experience which can bring us the best customer experience possible. Digital must be used to get rid of the in-store pain points.Eric Pestel, founder of Lookadok, explains :
“Customers have changed their behaviour and their expectations, which means that we need to rethink this relationship in order to satisfy our clients”
The digitalization of points of sale, or phygital, is the response to this demand.
Contraction des termes “physique” et “digital”, le phygital peut se traduire par l’installation de dispositifs digitaux en magasin. Son but : créer des synergies entre le commerce en ligne et les magasins physiques. Laurent Milchior, co-gérant du groupe Etam l’a d’ailleurs très bien compris, selon lui :
“Digital is above all a vehicle for omnichannel co-operation and in-store traffic”
Phygital is represented in different formats. For example, interactive screens for placing orders or finding supplementary information about certain products, click & collect and connected tablets that facilitate the digitalization of points of sale.
The benefit of choosing such solutions is twofold for the business. Firstly it drives in-store traffic (thereby increasing turnover particularly through cross-selling) and secondly, because it is a brilliant way of improving client loyalty and engagement.
It is a fact that the appearance of e-commerce has brought about a change in our shopping habits. We are increasingly connected and we are happy to keep informed throughout our buying journey.
According to the study undertaken by FEVAD, in 2017, 60% of us had already searched for items using our mobile phone whilst in store. Of that percentage, 28% had compared the price of a product sold by other brands. So there is plenty of competition out there: attracting and retaining customers has become crucial for companies.
There is no question that companies must adapt their offer to the needs of their customers or risk losing them. These days it is essential to offer a simplified buying journey and a seamless, personalized experience. Catherine Barba, a French e-commerce expert, entrepreneur and business angel, explains :
“Our retailers need to understand that e-commerce has become routine and that their clients now shop differently. A store is no longer a separate, stand-alone space, but rather a place that is always connected to the virtual world by its customers who are themselves permanently connected via their mobile phone, before, during and after purchase”
Remarks that are endorsed by Frank Rosenthal, consultant in commerce marketing :
“In the specialist retail market, 80% of customers search first of all online before going in to a store. Since e-commerce has embraced the trio of choice, price and services, points of sale have to ensure that they reinvent themselves in order to provide an experience that websites will never be able to offer”.
However it is important to remember that any solutions put in place must be designed with the customer in mind. The aim is to make their purchasing journey easier and to offer a better experience.
“The omnichannel concept at Carrefour means adapting to our customers’ needs and offering them the right service at the right time”
, confirms Marie Cheval, Executive Director Customers, Services and Digital Transformation for Carrefour.
There are no miracle solutions when it comes to phygital. The digitalization of points of sale requires upstream planning. Any service that is deployed must be beneficial to consumers which means that the very first step is to anticipate their needs.
What are customers looking for ? How can phygital be used to enhance their experience ? These are the sorts of questions that need to be asked.
An example of this is Maison 123 which has multiplied the number of exclusive services designed to “simplify life” for its customers. The strategy of the brand, which is largely digitally based, is to take into account the expectations of its clients by offering in-store iPads, e-reservation, mobile payments, click & collect etc. By offering these services, 123 shows its commitment to improving customer experience and to facilitating their purchase journey. Result : the web, including all services, represents 15% of the brand’s total turnover.
Which highlights the fact that retailers should also think of the economic benefits that phygital can bring. It is good to improve customer satisfaction, but even better to make a profit !
4 MAJOR REASONS FOR DIGITALIZING YOUR POINTS OF SALE
Phygital involves many benefits, as much for clients as for businesses. Discover the many features offered by the digitalization of your points of sale.
There are two phygital solutions that are very effective in attracting customers to visit a physical store.
Click & Collect : enables online purchases to be collected in-store. Delivery is free of charge, removing that obstacle from the customer’s purchasing activity.
E-reservation : without the obligation to buy, this service enables clients to reserve their item at a store so that they can try it on. This is especially useful for clients who want to see, try and/or touch a product in order to reinforce their purchase.
Even though both these tools function differently, they enable businesses to generate traffic at a point of sale without too much effort. By offering clients a real service (one offers delivery, the other offers the chance to try a product), both click & collect and e-reservation enable companies to retain a close relationship with their customers, which encourages loyalty.
A satisfied client is a loyal client, one who will be happy to return to a physical store if they are provided with a good experience. Whilst phygital has many benefits, one of the most interesting is the development of turnover.
Traffic generated at a point of sale (particularly from click & collect and e-reservation) facilitates additional sales. According to FEVAD, 33% of e-shoppers bought other products when collecting their orders in-store or via a relay point in 2017.
The omnichannel concept offered by phygital contains a major advantage : data collection. The data that is collected, whether online or in-store, enables a personalized offer and service.
According to a study undertaken by Adyen, 64% of consumers are likely to spend more time in-store if personalized offers are recommended to them.
are likely to spend more time in-store if personalized offers are recommended to them.
The key is to standardize the data in order to utilize it intelligently. The sales assistant can use a tablet to consult customers’ accounts and understand their preferences and buying habits: average spend, browsing history on the website, preferred brands (in the case of a multi-brand retailer), wishlist items etc.
The sales adviser can then easily adapt their dialogue whilst offering a seamless and personalized experience to their client…increasing the company’s turnover at the same time.
Sephora is one of the phygital pioneers. Since 2012, the brand has constantly adopted and set up new digital technologies in its physical stores.
Recently Sephora has introduced its new phygital offer : “Sephora Plus”. In practice this consists of connected terminals which allow clients to consult the whole range of products sold by the brand.
Since Sephora has an extensive catalogue, this solution permits the company to overcome any problems with stock due to lack of space in-store. In practical terms, this means that if one of the products is not available in-store (either because of lack of space or possible stock-outs), the customer can order it directly from the connected terminal. The package will be delivered free of charge within 48 hours to their chosen delivery address.
The installation of these terminals is not only very convenient and useful for customers, but also enables the brand to maximize its offer, provide customer satisfaction and, at the same time, make a profit.
Even if the appearance of e-commerce has changed shopping habits, this does not mean that physical stores are dead or dying. Phygital is establishing itself as a complement to physical and digital. Charlotte Journo-Baur, the CEO of Wishibam, explains :
“We believe that e-commerce deserves to be reinvented, that the customer deserves an experience that brings together the best of both worlds – online efficiency and in-store experience ”
Companies that put in place innovative and clever solutions for their clients can make the most of their website to generate traffic at the points of sale whilst at the same time growing their turnover and personalizing their offer. Laurent Milchior points out :
“The Web contributes to the store, just as the store contributes to the Web. Digital is stronger when it is close to the store and the store is stronger when it goes together with a user-friendly website”
of brands are likely to be equipped with a complete phygital system
Since launching in 2015, Wishibam has reinvented online shopping methods by bringing together the best of both worlds : the dazzling speed and convenience of e-commerce with the buying experience of shopping in-store. This explains the company’s raison d’être which is to help retailers offer a (genuinely) omnichannel experience.
Following the launch of their e-personal shopper solution, Wishibam now offers retailers another option. It is exclusively designed for the physical shopping environment as it involves the digitalization of points of sale and the addition, once online, of the e-personal shopper service.
An example of this is the Compagnie de Phalsbourg’s choice of Wishibam to digitalize the entire offer at its shopping malls, thus making The Village Outlet the first phygital outlet in the world : physical, digital and first-hand experience.
Would you be interested in digitalizing your points of sale and building phygital into your strategy ?
Passionnée par la transformation digitale dans le secteur du retail.