I’ve been pointing out the trend toward blended physical/digital (“phygital”) retail experiences for several years now. The momentum around this continues to grow as born-online brands like Nasty Gal and Bonobos rush to open stores and established names like Bloomingdales and Nike focus on bringing digital into their physical stores. So far the focus has been around how these innovations impact the customer experience. However, as the trend takes hold, these are really business model innovations and it’s time to take notice how these new models impact operations and the retail employee experience.
The phygital trend often serves to improve the customer experience by offering increased ease, simplicity and speed. Great examples include using the Starbucks app to not only pay for your coffee, but order it too; and being able to return items purchased on HauteLook to your nearest Nordstrom Rack location. On the other hand, there are times when the phygital experience is not necessarily a better experience. (I actually find the checkout process at Bonobos Guideshops to be clunky and it’s somehow unsatisfying to have to wait for pants in the mail when you just found and tried on the exact pair that you wanted).
So even though not every phygital customer experience is great, here’s the thing that is really going to make this trend appealing for retailers: it’s not just about the customer experience.
Showroom stores like Bonobo’s which pack a brand’s full range into roughly 1,000 square feet with no need for a back of house allow a brand to grow their customer base and market exposure at a fraction of the traditional inventory and real estate expense level associated with store count growth.
Where phygital can make things even better is the improved employee experience working at one of these stores. When I asked my personal “Guide” at the Bonobos store about her work experience there compared to previous retail jobs, she was emphatic that working in a showroom was much better than working in a traditional store. She knew that her primary mission was to focus on customers and the showroom model, by removing traditional tasks like stock keeping, afforded her so much more time to offer customers a concierge level of service. The quality of a store’s employees can make or break the customer experience. If the phygital model presents a more attractive day-to-day work experience, those stores will attract the best employees which will further differentiate them from their traditional competition.
With a variety of secondary and tertiary benefits beyond just customer satisfaction, we are sure to see continued growth in retail innovations that blend the digital and physical worlds to bring a better business, not just customer, experience.