Close Menu

What Is Phygital Retail?

6 min read

Integrating the Physical and Digital Worlds

Amid the pandemic, it looked like digital retail would finally end physical retail. It instead served as a reminder of the vital role physical retail plays in a comprehensive retail experience. 

The in-store shopping experience is far from dead. Consumers are returning to stores. The social element of stores was also highlighted because human contact was limited. 

The benefits of digital retail have been recognized by consumers who previously ignored it. The phygital retail concept combines physical and digital components, resulting in the best of both worlds. Today, both channels play important roles.

Integrating the Physical and Digital Worlds 

Collaboration between these two channels is not new. Phygital retail involves a more immersive experience rather than multichannel or omnichannel strategies. 

In light of the pandemic two years ago, phygital retail recognizes that both channels can be as important as each other and that a blended offering can deliver an accentuated, powerful customer experience that is superior to one channel alone. 

During pandemic lockdowns, the role of phygital retail was highlighted. Retailers who had no choice but to bolster their digital presence but who still believed physical retail played a key role in buying decisions were able to take advantage of the use of virtual and augmented reality technology and the buy online and pick up in-store strategy, for example.

The Advantages of Phygital Retail 

Combining the two offers is certainly compelling. Each has its strengths. Size, complexity, and product categories can influence these strengths. Shoppers can, for instance, browse, research, compare prices, and get deliveries straight to their homes through digital retail. But before they make a purchasing decision, they cannot see and touch such products unless they go to the store. 

In physical retail, both channels are important to the customer journey and purchase decision, even though the impact may not be obvious. Previously, retailers might have looked at the poor sales of a physical store and assumed that it had little impact on profits. 

However, that assumption ignores the benefits of such physical strategies to support digital retail – whether it’s a place to see the goods in person, or simply to generate brand awareness.

The Three Pillars of Phygital Retail 

Integrating online and offline touchpoints to create a phygital experience involves the three I’s, immersion, immediacy, and interaction. To illustrate this, let’s consider these concepts:

  • Immersion means including customers in the experience. 
  • Immediacy allows shoppers to get the right information at the right time, and to decide how quickly their orders will be fulfilled. 
  • Interaction gives consumers the chance to handle your products and interact with them. 

A successful phygital retail experience is convenient, fast, and engaging.

Nine Strategies for Phygital Retail 

Consumers can discover and buy products through their preferred shopping channel in phygital retail, just as they can in omnichannel retail. The key to creating a phygital retail strategy is to streamline all your efforts, whether you’re selling online, in-store, through social media, or at a limited-time pop-up shop. 

Here are a few strategies to consider:

1 – Offer customers a choice of purchase methods

BOPIS (buy online, pick up in store) lets customers shop on your e-commerce website and pick up their order in-store or at a designated pickup location. In addition to reducing shipping costs, this can also lead to increased sales if customers choose to buy additional items while they’re at your shop to collect their orders. 

Another order fulfillment option is curbside pickup, which is similar to BOPIS. Orders can be placed online and picked up in person, but the customer doesn’t have to get out of their car. When they arrive at your retail store, they notify you via text, phone call, or email and you or your sales staff bring the order out to the curb. The convenience of this phygital retail strategy helps boost customer satisfaction.

2 – Offer self-checkout or no checkout 

Although the “just walk out” checkout experience of Amazon Go is probably not on the agenda of your local retailer, it is an interesting concept and may be achievable for retailers of all sizes in the future. 

The customer walks into the store, picks up their items, and walks out. Customers’ purchases are tracked using digital technology and their payments are automatically processed through the Amazon Go app after they leave.

The self-checkout process is a great way to digitize the in-store checkout process, so customers can pay when it’s convenient for them. To reduce the checkout-counter lines, you can place self-checkout kiosks throughout your store.

3 – Test out AR and VR applications

Technologies such as augmented reality (AR) and virtual reality (VR) blur the line between the digital and physical worlds. With AR, retailers are letting customers try on clothes digitally while they’re in-store, and VR is an excellent way to digitally immerse customers into an experience where they can discover your brand and products.

4 – Maintain supply and demand with endless aisles

In-store and ship-to-home, also known as endless aisles, is an order fulfillment option that allows customers to shop and buy products in-store and have the order shipped directly to their homes. 

The benefits of endless aisles include increasing in-store sales even if you don’t have the products in stock, and creating a seamless shopping experience for the customer. Customers can self-serve using ordering kiosks or you can assist them in placing their orders.

5 – Notify users locally via push notifications

Your retail business’s success depends on building relationships before, during, and after the sale. You can accomplish this by sending mobile notifications to prospective and existing customers through local push notifications. 

Customers within a certain distance can be alerted when new products arrive in-store, or they can be contacted post-purchase to solicit reviews and boost customer engagement.

6 – Establish a digital storefront with social media

Social media networks such as Instagram, Facebook, TikTok, and others allow your physical retail business to have a digital presence. Facebook and Instagram also provide e-commerce features, so you can implement a social commerce strategy and sell directly through social media. 


Advertising loyalty programs, sharing special offers, and running advertisements are easy to do on social media. It provides a seamless customer experience across all channels and enables retailers to connect digitally with shoppers. 


As an example, run a limited-time offer to give customers 10% off their next in-store purchase if they comment on an Instagram post. You can offer this deal to the first five people who comment on the post.

7 – Conduct pop-up stores 

Pop-up shops are a low-cost, low-risk way to add a physical presence to your online business where customers can engage with you. 

With phygital retail, shoppers can peruse your collection on an iPad, read customer reviews, and explore product details online while touching and trying on the merchandise in person. 

A pop-up store is also a great way to determine if you’re ready to expand beyond your e-commerce business to a physical location.

8 – List your business on Google Business Profile 

Another way to complement your physical storefront with a digital presence is to create a Google Business Profile (formerly known as Google My Business). You can also engage with customers, collect reviews, and promote your retail business online. 

You can use local SEO to attract customers who are searching for your products locally by keeping your GMB listing updated with images, your location, and special offers. Customers are also more likely to visit your store if you make it easier for them to find you online.

9 – Showcase customer reviews

It is important to encourage people to leave customer reviews to turn browsing customers into paying customers. A great phygital retail strategy is making sure in-store shoppers can also see online reviews. 

This can be achieved by displaying online reviews in-store next to the related products, so shoppers can save time looking up reviews online and make quicker purchasing decisions. Displaying relevant product reviews can be done with signage or by strategically placing iPads around your store.

The Future of Retail: Phygital Retail

Phygital retail is here to stay. Just as in other aspects of a consumer’s life, the physical and digital have merged in retail. 

Those retailers who realize the benefits of both physical and digital retail are now combining the two into a compelling, combined storefront that meets a much wider range of customer needs.

You can start creating a phygital retail experience today, no matter how big or small your business is. Using the same platform to manage your online and physical stores is a great first step to phygital retail. 

As a result, shoppers will receive a more personalized experience, create a cohesive brand experience, foster long-term loyalty, and boost online and in-store engagement.