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IS “PHYGITAL” THE NEW SUCCESS FACTOR?

RETAIL TRENDS TODAY AND TOMORROW

The strong growing e-commerce presents a challenge and has no doubt taken its toll on traditional retail sales, but a new trend shows that e-retailers open physical stores as hubs of inspiration and to boost visibility and sales. To apply the “Phygital” strategy and add a digital approach to the classic physical store may be the road to success in the retail landscape today and tomorrow.

STRONG GROWING E-COMMERCE VS TRADITIONAL RETAIL SALES

The total retail sales, including both online sales and sales in physical stores, worldwide have been growing and are projected to continue to grow the coming years, but the total retail sales growth rate is quite modest compared with the e-commerce development. The strong wind in the sails of e-commerce is obviously challenging and takes its toll on traditional retail sales. In the US, online retail has grown 300 % between 2000 and 2018, while during the same time, department store sales have dropped by almost 50 %.

E-TAILERS OPEN PHYSICAL STORES

What do all these figures tell us? What will the trends in retail and the shift in shopping behavior and choices of channels take us tomorrow? Are the physical stores doomed and will the shop windows in the city centers gape empty in the future, while only e-commerce distribution centers flourish? No, the future is not that bleak, and several recent reports show some interesting facts. More and more e-commerce companies (e-retailers) open physical stores! Some of these stores are mainly showrooms serving as points of inspiration and hubs to interact with customers. It is not just about the stores anymore. It is about the touch points before the actual purchase! Surveys show that a growing portion of the consumers find traditional shopping boring and that they seek inspiration and an experience when they enter a store.

“PHYGITAL” – THE NEW SUCCESS FACTOR?

Many retailers today have managed to adjust to the trends, seize the new business opportunities and offer the customers both an inspiring physical store and a well-functioning digital shop. The new term “Phygital” represents a strategy that more and more retailers adopt to run a profitable business in the new retail landscape. It is about combining two worlds and make the most of them - to add a digital approach to the classic store! To be successful today and tomorrow, it is important to find the balance and integrate digital and physical channels to provide the best possible service and customer experience.

Details

  • Sävsjö, Sweden
  • Sandra Wärenhed