Retail stores can revamp customer experience by going ‘phygital’

from Retail Asia (June 2023)

by Charlton Media Group

How brands can craft the right ‘Shoppertainment’

RETAIL WATCH Retail stores can revamp customer experience by going ‘phygital’

Consumers are increasingly demanding more exciting in-store experience.

To gather and use data analysis and insights, retailers should utilise video-powered retail

SINGAPORE

Consumers are more demanding now that they are back to in-person shopping. Retailers needed to revive their physical stores to make it more exciting for the consumers, because if they cannot get that, consumers would rather buy online, Singapore Retail Report study said.

According to Varun Sharma, Vice President of the unified CX platform, Emplifi, in the Asia Pacific and Japan, one way for retailers to create this excitement is to be “phygital.” They need to mix physical and digital strategies for a unified experience for consumers using digital datadriven customer insights and technologies.

To gather and use data analysis and insights, Sharma suggested utilising video-powered retail that involves video software that uses data to connect callers to an in-store expert to handle their queries.

“Video technology helps humanise digital communication between consumers and brands via their website—leveraging data insights such as how, when, and why customers are interacting,” he explained.

For example, Marks & Spencer has a “call the expert” video button, enabling their experts to pair with customers for a stronger chance of a sale. This live video service accommodated 28,000 one-onone consultations of customers browsing furniture, menswear, and lingerie in the store.

“This helps brands understand the customer journey better and provide a more personalised experience. With customer data, retailers can give shoppers exactly what they are looking for, boosting their sales potential, and cutting costs, too,” Sharma explained.

Dark stores

Another strategy retailers are using is called the dark stores. Despite the name, it can illuminate brick-and-mortar stores’ creativity. Dark stores are like distribution hubs of physical stores, said Sharma. These physical stores turned into dark stores, which are not open to customers but are used as store inventory and for brands to send out orders.

Online grocery store, HappyFresh, increased its dark stores in Singapore to allow an efficient shopping experience, bringing high-quality products to customers.

Since its launch, the online grocery’s users increased by 300%, month-on-month, to address growing demand.

BNPL schemes

The Buy Now, Pay Later (BNPL) schemes also received popularity in Singapore from 2020 to 2021 due to convenience and prudent economic climate, Quan Yao Peh, a Senior Research Analyst at Euromonitor International, said.

Based on Euromonitor’s 2021 data, credit cards account for 61% of personal transactions.

“BNPL has been positioned as increasing the immediate affordability of goods and services, whilst allowing customers greater repayment flexibility compared to one-off spending,” Quan Yao said in an interview with Retail Asia.

To avoid turning BNPL to buy now, don’t pay later, businesses should consider the profile of their consumers.

“A millennial and Generation Z, someone who has just started working, is perhaps still in university and may not have that much disposable income at this point. The retailer needs to consider whether or not the BNPL implementation will allow them to better reach and capture the wallets of their target consumer,” said Quan Yao.

An example of a brand adopting BNPL is clothing brand, Pomelo’s, partnership with Atome, a BNPL mobile app, to allow customers to pay one-third of the total bill first. After their check out of items, their orders will be shipped and customers will get the items and pay other payments later with zero interest, 30 days apart.

Pomelo is currently operating three physical stores in Singapore which are in Nex, Jem, and 313@Somerset.

Cashier-less checkouts, AR zones

Smart technology can also create seamless experiences for customers when they visit physical stores such as through cashier-less checkouts, voice-activated instore robotic assistants, dynamic merchandising tools, and shelf-monitoring solutions, explained Guillaume Sachet, Partner of Advisory Practice at KPMG, a professional services firm.

He added that these technologies can combat consumers’ frustrations such as long queues, insufficient stock of popular products, and navigating physical stores.

A brand that does this is Singapore’s Pick&GO, an AI convenience store, which resorted to AI technology to help customers walk and complete their payments in a matter of seconds.