Let's get 'phygital': The race to hybridize experience

September 20, 2021 Vibes Marketing

The pandemic has pushed one of the biggest challenges for retail businesses into the spotlight, namely 'How do you smash channel silos and join operational dots to deliver seamless integration of physical and digital services?' As customers demand more hybridized services, retailers are responding fast despite the many data hurdles to grab-and-go.

From click-and-collect to curbside, self-serve and self-checkout, the past year has seen the proliferation of empowering retail services. But despite businesses giving the impression of being 'omnichannel,' the pandemic revealed that when it came to being able to innovate customer-facing services at scale, this was far from the case.

Not only were many retailers unable to join up their ordering, sales and fulfillment services, but they also weren't able to access the holistic data flows they needed to unify communications across multiple channels or to ensure seamless experiences including loyalty, and rewards to incentivize customers during the pandemic. Seventy-eight percent of leading U.S. retail and hospitality organizations face issues with channel integration.

Even though webstores and mobile apps are able to access and utilize up-to-date digital data, the ability to harness in-store POS data within these platforms still lags behind. Many retailers are still not properly set up for connected commerce — either to sell online, to run their businesses remotely, or handle the complexity of multiple touchpoints.

During the pandemic, more than two-thirds (69%) sought to integrate digital platforms to sustain their business during office-closures, staff-isolation, and diminished physical footfall.

But many found they were not able to manage their supply chains remotely or allow customers to order online and then pick up curbside, which could have enabled their stores to still do business.

Outlets that failed to "do digital" were left behind while those that could pivot services survived and thrived.

The aftermath of 2020 has led to accelerated investment in connected commerce platforms and solutions. Things that were always thought of as 'future' technological advancements maybe five to 10 years away have accelerated to the fore as retailers use the break in demand to streamline their processes and build out tech that will support their recovery — including contactless, QR codes and mobile payments and acceptance.

It is likely that the tech-changes implemented in the past twelve months will remain in place, becoming part of the new working practice long after the pandemic has passed. These changes will allow retailers to connect services more seamlessly and capture even more data at the sales point, feeding this back into the business to enrich CRM and loyalty applications.

 Retailers are rethinking loyalty  

As channels merge, retailers' traditional loyalty programs, based on coupons and in-store redemption, are out of the window.

While customers still want to buy their products and get great deals, many remain anxious about social distancing, so don't want unnecessary physical contact in store.

They're looking for new loyalty models with digital rewards that follow them across their journeys whatever channel they are in and which can be redeemed at any touchpoint that's convenient for them.

As loyalty gets hybridized too, the big question for retailers is how do you ensure that reduced face-to-face interactions still deliver a positive experience? And how do you then market to customers in non-linear sales journeys to continue to drive sales add-ons and uplift?

Once again, the answer lies in connected commerce. By tapping into transactional data, using tokens and personalized content combined with proactive out-reach, unified CRM platforms and mobile push notifications, retailers can create 'follow-me' incentives that optimize loyalty, conversion and spend.

In this respect, the pandemic has forced retailers out of complacency, helping them to break free from the idea of standard buying habits and encouraging them to take a more personal approach to cross-over services.

 Merging services has thrust data management and security to the fore  

As retail organizations collect more data to fuel new phygital services, they also must overcome issues with internal IT-complexity and legacy debt. There can be dozens of information systems (spreadsheets, CRM applications, data warehouses, mainframe applications, point-of-sale, cloud applications, email servers, etc.) that hold service and customer data. Bringing it all together also creates issues with security and compliance.

It's clear that creating seamless hybridized platforms is a big ask, especially when in-house IT-support teams are already stretched, understaffed, or working remotely. It's why many retailers are now looking to vendors to help them connect services and help them remain compliant with minimal effort and resources.

As we get ready to embrace recovery and the return of live shopping, there is no going back.

Customers that have become used to new hybridized services will expect these to continue for some time to come, if not indefinitely. Consequently, retail-tech, e-commerce and payment vendors will become even more important in re-energizing operations and fueling retail growth.

In the race to secure customer loyalty through better connected experiences, the winners will be those that can connect the data dots within their businesses as well as multiple touchpoints within their channels. To achieve this, they will be seeking partners with more flexible relationships and the ability to develop new ecosystems with synergistic brands and hybridized services to drive innovation faster than ever before.

 

This article was written by Chris Kronenthal from Retail Customer Experience. News Features and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

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