The futuristic new retail trend super-charged by COVID-19

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Why it’s time to try ‘phygital’ retail. You might not know it, but you’re living in a ‘phygital’ world. 


As technology blurs the lines between the physical and digital worlds (and a zippy portmanteau, phygital, follows), our lives have taken on a sort of online-offline fluidity. 


Modern shoppers will browse the web, try in-store, then buy the best deal online later – a habit known as “showrooming”. They customise, they create, they demand more than simply a product.  

What we’re seeing is a coming to the middle, where neither bricks-and-mortar nor online pure play is the optimal solution. To be successful, you need to do both at least reasonably well.

- Dr Jason Pallant, marketing lecturer at Swinburne Business School

Now some retail brands are crafting strategies that deliberately blur the physical and digital worlds. At Adidas in the US, shoppers are provided with augmented reality (AR) gear to allow them to design their own sneakers in a fully immersive environment. At Nike’s Brooklyn Community Store, 80 per cent of the staff are local, and the shop supports local organisations and charities. It’s a hub for the community and, with such a strong neighbourhood presence, a foil to the online experience. 


In the luxury sector, online shoppers can embed Burberry’s $2390 Black TB bag into their “personal space” via AR, giving shoppers a hi-tech way to try before they buy. Another option is to add a handbag to an Instagram image, delivering instant – if digital-only – fashion cache to a look. At Ralph Lauren’s NYC store, interactive mirrors allow shoppers to experiment with digital outfit combinations and communicate with assistants. Both Prada and Louis Vuitton have dressed virtual stars, from models to gaming heroes. 


According to Afterpay’s Global Gen Z Report, phygital retail will only become more important – especially to the digitally native Gen Z (those born between 1995 and 2012), whose lives flow seamlessly between offline and online worlds. 


Now more than ever, brands must look to omnichannel retail strategies, says Dr Pallant. DTC online brands should consider experimenting with pop-up bricks-and-mortar presences, while in-store shopping can be supplemented using digital technology.


Nicolò Andreula, the Italy-based economist, marketing consultant and author of #Phygital: The New Marketing Between Physical and Digital, says that phygital shopping has grown alongside the popularity of smartphones, augmented reality and virtual reality – and presents real opportunity for smaller retailers.


“Use a smartphone to remind people how great it is to shop there,” advises Andreula. “The key here is empathy and multisensorial storytelling.” 

An Instagram post that celebrates the smell of freshly baked bread in a cafe, or a video of unpacking a new delivery of the season’s must-have lipstick line in-store, for example, tap into emotion and tell stories that go beyond the product alone.


Andreula says that the pandemic has validated and accelerated the phygital trend.


Brands that were already phygital – for example, Nike Live stores, which provide a limited range in-store with screens that enable customers to access the full range – carry less stock, so were better able to adapt to social distancing measures. 

“COVID has forced large parts of populations, including my mother and aunt, to finally shop online,” he says. “On the other hand, young people who thought they could do everything online now understand how important it is to have real, high-quality human relationships. The pool of customers looking for phygital has risen dramatically.”

And that emerging middle ground is now looking more crucial than ever.


Daisy Dumas is a journalist who has worked for The Sydney Morning Herald and The Evening Standard. Her work has also appeared on the BBC, CNN and The Independent.  


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Read more about Gen Z here.