The term “Phygital” refers to the blurring of the lines between the physical and digital worlds. From a retailer’s perspective, this term points to spaces that blend in-person and online experiences to create a hybrid of both. As such, the Phygital Generation (the demographic cohort after the Millennials, also known as Generation Z) is a young group of digital-native consumers who expect brick-and-mortar shopping experiences to seamlessly incorporate digital technology.
Contrary to popular belief, Generation Z still prefers shopping in physical stores. An IBM executive report found that 67% of the Phygital Generation still did most of their shopping in-store, while a further 31% still shopped in-store “some of the time”. What differentiates the Phygital Generation from past consumers is that technology is not seen as simply a marketing or sales tool. Rather, it’s seen as an integral part of every point of the shopping experience. Younger consumers will hold today’s and tomorrow’s retailers to new standards, which requires a fresh approach to just about everything. But don’t feel daunted! Here’s how to impress them with customer service that’s both innovative and accommodating.
Optimize everything for mobile
Every member of the Phygital Generation has a personal portal to the online world that’s within reach (if not already in hand) at all times. Therefore, they expect every touchpoint to be optimized for mobile, from the official website to the checkout process through to ongoing service and support. This is an important lesson for appealing to this generation — technology is about making things easy, not flashy. Consider how this impacts your marketing strategies. Strategic CRM e-newsletter campaigns are likely to become tablestakes, if not a marketing tactic of the past, as the next generation increasingly expects to be able to communicate with brands in real-time using new tools like chatbots and SMS messaging. As such, the easiest way to serve younger consumers is to accommodate the devices and behaviors they already rely on.
Create an enticing in-store experience
Just because the Phygital Generation loves smartphones doesn’t mean they only want to chat or text with support staff. On the contrary, they actually expect to come into a store and receive a higher-level of service as well as a greater range of opportunities. Gen Z are enthusiastic to try-before-they-buy, a mentality which is leading to an increase in retail “showrooming”. Basically, the Phygital Generation is not looking for stores full of kiosks and self-serve checkouts. Instead, they seek a unique and exciting in-store experience that adds value to their purchase, rather than simply facilitating it.
Increase access to the omnichannel
Omnichannel retail as a strategy embodies much of the seamlessness and accessibility that the Phygital Generation will naturally expect. Both the omnichannel and the phygital experience are about combining and re-contextualizing sales channels to facilitate new shopping experiences, allowing for an easier integration of the physical and digital worlds. As such, the Phygital Generation will expect to be able to shop online and pick up in-store and vice versa. In general, they will expect the widest number of purchasing options possible and seamless fulfillment regardless of on-site inventory.
Prioritize a personalized experience
A generation that lives a large portion of their lives online is used to logging into an account or being tracked by cookies. Not only are they used to being remembered, they have come to expect it — and the customization it provides. Collecting and utilizing customer data from as many touchpoints as possible is going to be essential for serving the Phygital Generation as it will allow for retailers to provide a customizable experience. Consumers these days are expecting custom-tailored service and personalized recommendations, which means that retailers need to be able to offer consumers advice based on their personal preferences and shopping history. This isn’t a one-way street: 44% of consumers say they are likely to visit a store again after a personalized shopping experience, making the investment in personalized experiences hugely beneficial to the retailer as well.
The Phygital Generation is looking for tech-aided shopping experiences that are engaging, informative, accessible, and accommodating. This is only possible when in-store technologies are integrated and working on a common platform. Working with a homogeneous suite of technology ensures that shopping in-store is an opportunity and not an annoyance, as it allows for a seamless shopping experience. For instance, products visible online need to be available in-store to allow consumers to try-before-they-buy, and digital signage needs to similarly reflect consistent messaging once they’re in-store. With an integrated POS, retailers can also see consumer data in real-time to prompt customized upsell opportunities that benefit both parties.
The Phygital Generation is projected to become the largest segment of consumers by 2020 and drive over $140 billion in direct spending. As this demographic becomes increasingly important to retailers, customer service must change to meet (or exceed) their expectations. These consumers expect their retail experience to toggle back and forth between the physical and digital worlds as easily as they do. If retailers do not adapt to this changing of the guard, they risk getting left behind.
Are you ready to be at the forefront of retail with innovative tech? The iQmetrix team wants to help you make it happen. Our retail management solutions are tried and tested, prepared to move with you as you grow and scale.
Photo credits: March Marcho / Shutterstock, Focus and Blur / Shutterstock, Nicole S Glass / Shutterstock