Every business is jumping on the bandwagon of using technologies like IoT, AR, VR, and AI in retail stores to create phygital experiences for their customers.
Retail stores across the world have been longing to develop the omnichannel customer experience. Omnichannel in a retail context means to provide true continuity of customer experience between different online as well as offline channels. And they can now achieve that vision by developing a phygital experience. Phygital is a recent buzzword that is gaining a lot of traction nowadays. It simply means combining real-life 'physical' and ‘digital’ experiences to benefit customers. As humans, people tend to value both real-world experiences and the online world’s connectedness. And combining these elements becomes possible by going phygital. Retailers can simply go phygital by converging offline and online with the help of various digital technologies. Technologies like IoT, AR, VR, and AI in retail are enabling retailers to bridge the gap between the online and offline worlds.
Businesses can connect physical objects like packaged foods, clothing items, accessories, and other products with devices like display screens, cameras, and sensors that integrate with digital technologies and allow phygital experiences.
The technology that connects every device with each other and servers can connect physically with digital worlds as well. IoT already has various applications for retail. IoT sensors allow businesses to offer in-store digital experiences like real-time customized advertisements, packaged product information, and location-based navigation. Retailers can connect smartphones and in-store display screens with carts to show real-time advertisements for relevant products and generate more revenue. For instance, they can install beacons on shelves to detect what products are purchased by customers. Imagine a customer purchasing a milk carton and seeing an ad for coffee or tea sachets on the nearby LED screen. This can enhance customer engagement. And real-time advertisements can easily put relevant products in the head of consumers. A great example of this is a popular Finnish chain that installed beacons to enable consumers to view recipes and receive smart advertisements. A study on its success reveals that 25% of consumers who viewed their targeted advertisement purchased the advised product.
Retailers can also deliver packaged food information to customers in an engaging way. IoT-enabled smart carts can allow consumers to scan the barcode on products and get relevant information such as manufacturing details, ingredients, nutritional information, and recipe ideas. This information can be shown as pie-charts, diagrams, and videos to enhance engagement and information sharing. IoT in phygital stores also enables retailers to promote their brand. They can ask consumers to promote their products on social media and win free samples. For example, an ice tea company in South Africa launched a Twitter-activated vending machine. All that consumers had to do to get free samples was tweet about the vending machine.
Computer vision has the ability to extract information from images. It can constantly monitor products on the shelves and help in inventory management so that customers can find all the products available every day. Also, computer vision can enable a cashier-less shopping experience. Cameras installed on smart-carts can detect products in the cart. Computer vision applications can scan the products and extract their pricing information from servers. It can then calculate the final bill amount. This eliminates the need for consumers to wait in a queue for payment.
Facial recognition technology also helps retailers to go phygital. A camera with facial recognition technology can detect returning customers and add data of new customers to servers. It enables retailers to identify previous customers and assign them loyalty points. This can ensure customer retention for retailers. Also, robots can enhance the in-store experience by helping consumers to navigate in stores. They can analyze customers’ moods and converse with them in multiple languages to entertain them.
Immersive technologies allow displaying features of services and products without the 0 need to fetch them in reality. And that is a great way of going phygital. They can enable customers to try any product before making a purchase. This will allow customers to try multiple products on the go. For instance, virtual mirrors can display customers’ look after wearing purchased products. And it eliminates the need to go to the trial rooms and to try every item. VR can create virtual showrooms that merge the physical and digital worlds. For instance, IKEA has developed its virtual reality showrooms that help customers to visualize IKEA-furnished rooms. Retailers can also enable in-store navigation with the help of AR. Consumers can simply enter their shopping list into a system. AR can show the direction to customers to help them navigate through the store and find each product mentioned in the shopping list.
There are several retail stores that have already started offering phygital experience and not just products to their customers.
One of the biggest eCommerce giants, Amazon has started its version of phygital outlets in the form of Amazon Go stores. To date, it has 26 open and announced stores in the USA. They provide a cashier-less experience to users. All a consumer needs to get the phygital experience at Amazon Go is a smartphone, an Amazon account, and the Amazon Go app. Consumers can download the Amazon Go app for free on app stores. When they enter the store, customers can scan their phones at the entrance. And then Amazon’s advanced in-store technology detects every purchased item with the help of computer vision to calculate the final amount. The receipt of the final amount is then sent to customers and charged on their Amazon account.
Rebecca Minkoff is a global designer brand. It has partnered with eBay to transform the customer experience. In some of Rebecca Minkoff’s retail stores, they have deployed technology in mirrors and fitting rooms. When customers enter the store they can interact with the mirrors lining against the wall. These mirrors are actually giant touchscreens. Customers can select the drink they want through mirrors. They can then select all the items they want to purchase. Once they have selected all the items they plan to purchase, they can straight head towards the fitting rooms. Mirrors in the fitting rooms can detect customers’ entrance by communicating with their smartphones. Customers can use mirrors as simple mirrors or get any additional information about garments on their display. They can also request a different size for any garment through mirrors.
Nike has opened a phygital store in NYC under the name “House of Innovation 000.” This phygital Nike store offers services of both Amazon Go for cashier-less experience and Rebecca Minkoff to request items. But it also offers to design customized shoes. Yes, you heard that right, customers can design their own shoes. The store has several touch screens that enable customers to design their shoes. The touchscreen also has some pre-built designs to assist customers. When the design is created, the store can create a physical copy of that design within 90 minutes. This facilitates personalization and enables enhanced customer experience.
There are many startups that have started using technologies like IoT, AR, VR, and AI in retail to offer phygital experience to customers. But, the phygital era in retail stores is still at its infancy. Majorly only giant companies have invested in it. The success stories of these giant companies will eventually encourage every large and small retailer to go phygital. Also, these giant companies have implemented only a few digital technologies in phygital stores. Incorporation of more digital technologies will enable a more frictionless and enhanced customer experience in physical stores.
Naveen is the Founder and CEO of Allerin, a software solutions provider that delivers innovative and agile solutions that enable to automate, inspire and impress. He is a seasoned professional with more than 20 years of experience, with extensive experience in customizing open source products for cost optimizations of large scale IT deployment. He is currently working on Internet of Things solutions with Big Data Analytics. Naveen completed his programming qualifications in various Indian institutes.