Grocers are Captivating Customers with “Phygital” Experiences that Supercharge Sales and Loyalty
As shoppers return to in-person grocery shopping after the pandemic’s forced hiatus, they want a human experience that lets them touch products and interact with store staff, but they still crave the overall convenience of digital shopping. They are looking for a combination of the physical and digital a “phygital” shopping experience.
The definition of phygital is uncertain because it’s still evolving, but the concept is picking up a lot of steam as all retail adjusts to the changing needs of consumers. Retailers are searching for the “sweet spot” that hits the exact combination of physical and digital their customers want.
Phygital Pays Off
Providing phygital shopping experiences can pay off bigtime majorly in three ways: boosting foot traffic, sales, and gross profit. Designing phygital shopping should start with simply ensuring that customers aren’t disappointed. Out-of-stock items were an immense challenge for retailers during COVID, and many grocers were overwhelmed by the increased online demand.
Through no fault of their own, grocers provided an experience that wasn’t bad. It just wasn’t complete. There were far too many replacements and out-of-stock items. As customers return to stores, they expect to not have such problems. They want to take back control of their shopping experience.
One of the biggest conveniences digital experiences offers store managers is that they collect a lot of data about what each customer wants from their experience. That’s why as grocery stores are getting more sophisticated in the digital space, they realize that customizing offerings means they can provide attractive offers they know customers are going to love.
Phygital starts with a mobile app. The mobile channel is the true omnichannel solution: it’s with the customer everywhere, all the time; it provides valuable in-store opportunities to save, and it can give out-of-store opportunities to communicate and sell.
Apps need to provide in-store value first (where penetration is more than 60 percent of shoppers) and online capabilities second (where penetration is below 10 percent). Focusing the mobile strategy on enhanced in-store experiences ensures that digital touchpoints with consumers will be enormous as well, increasing opportunities to execute store, online.
All that said, integrating consumer technology needs to start in the store. The operations team must figure out from the ground up how technology will be executed, and whether it’s even feasible based on labor constraints or an honest diagnosis of store-level capabilities. Most importantly, they must get employee buy-in and adoption so that enthusiasm comes from within.
When it comes to managing data in any phygital environment, “paralysis by analysis” is the biggest challenge for independent grocers. Many technology solution providers spout confusing numbers for impressions, clicks, reach, influence, unique views, heat maps, and more, but it’s best to stick to the basics:
Is the campaign I’m advertising driving unit sales?
Is the combination of campaigns I’m executing leading to an increase in customer count for my stores?
Am I connecting with most of my customers in a meaningful way? If you haven’t connected with half of your shoppers in the past six months, your strategy isn’t working.
Phygital works. Kroger, Dollar General, and Albertson’s have all proven it, in different ways with different strategies. Amid Kroger’s major digital evolution from 2012 to 2017, they had 52 consecutive quarters of same-store sales growth.
Many times, failure of phygital is not because of the solution provider, but because of the chosen strategy within the solution. It’s important to work with a technology partner that will help shape a strategy that fits your situation. You must have clear success metrics and goals that can be hit on a quarterly basis. If those goals aren’t reached, your team must be prepared to revise its strategy.
Want to become an RSA America partner? Contact us today for a free demo to learn how our personalization, data-informed marketing, digital coupons, and customer analytics service can help your grocery store.