April 29, 2015

Let’s Get Phygital… in Retail

Forecasting Trends

6 Ways Retailers are Blending Physical and Digital Experiences in “Clicks and Mortar” Stores

Every quarter, we gather for a Learning Day to recharge our minds and creativity. This past Learning Day we took a dive into how companies are integrating technology and digital content into their physical locations –  to create blended physical and digital (“phygital”) experiences in what’s been aptly called “Clicks and Mortar” stores. We were particularly interested in online services that have moved into the physical space – companies like Trunk Club, Amazon, and Birchbox. Matthew led us on a whirlwind tour of examples, PechaKucha style, then we headed out into Soho to experience Clicks and Mortar for ourselves.

So what did we find from our online and in-person research? Why and how do online companies take advantage of phygital stores, and why and how do traditionally physical retailers take advantage of technology?

From Digital to Physical

1) To Tell A Brand Story: Companies are using physical locations to create a brand experience and connect customers to the brand story. We all know from our personal experiences that the associations we have with a particular brand — how they look and feel, how they make us look and feel — impact how likely we’re going to go back to them and whether we’d recommend them to our friends and colleagues. For example, Warby Parker, which started out as a online store, displays their company story alongside their products and through The Readery and the books displayed in their stores, creates strong connections between their classes and a love for reading. To take it one step further, they once took over part of the New York Public Library’s iconic Rose Main Reading Room in a “hush mob” >>>.


photos: Warby Parker

2) To Provide Complementary Services: Physical locations complement and add to what’s available online, particularly by offering related services. Birchbox, a subscription service for discovering and trying new beauty products, offers basic hair, makeup, and nail services at their Soho store. They also allow customers to hand-pick samples and build their own box, whereas the online subscription service selects products for you based on your profile. At Bonobos’ Guide Shops, customers can book one-on-one appointments with Guides who will help you find the right styles and fit, and place your order to be shipped home.


photos: Birchbox, Bonobos Guide Shop

Using Digital in Physical

3) To Test the Waters: Building out a physical store takes time. While a location is under construction, companies are building momentum and awareness by creating digital storefronts and leading passersby online. As a bonus, Kate Spade Saturday’s NYC store offered one-hour delivery so customers could have products in their hands as soon as possible, almost like they had bought it in-store.


photos: Kate Spade Saturday, Toms

4) To Showcase More: Technology is being used to showcase and demonstrate more products than can be feasibly presented on-site. Auto companies like Chevy and Audi have been using Oculus Rift to give customers in showrooms a unique experience with their products. While Chevy is using the virtual reality experience to show their customers how their products handle in tough terrain, Audi utilizes the technology to help customers visualize customization options. Fashion companies like Rebecca Minkoff and Burberry are integrating RFID tags into their clothing so customers can activate more information about the pieces they’ve chosen, for example to see related items.

photos: Rebecca Minkoff, Audi

5) To Personalize the Experience: Having face-time with someone is an opportunity to get to know them in ways that aren’t yet possible online. On the hardware side, Sephora has introduced Color IQ, a device they created with Pantone and can only be used in-store, to determine the appropriate foundation color for customers and then match them with variety of products in the store and online. On the solutions side, companies such as Apple, Safeway, and Giant Eagle are using (or will soon use) online profiles and Apple’s iBeacon technology to push personalized suggestions and deals to you in-store.


photos: Sephora, Mobile to Mortar iBeacon application

6) To Continually Improve the Experience: Data collection is an integral part of companies’ physical / digital strategy. Data collected online can inform in-store strategies and information that can only be gathered in-store, such as customer behaviors, can be used to improve the experience in real-time and in the long-term. For example, Nordstrom physically tags products that are popular on Pinterest to help customers find the products that they were often asking for (because they saw them online), and Disney’s Magic Band helps the company manage wait times and better understand their users’ preferences and behaviors, among other things.


photos: Nordstrom, Disney

We had a great time visiting stores, discussing our own experiences, and—in the second part of our learning day—creating our own pitches for Click and Mortar stores. Look out for those soon!

– Yen


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