Phygital Retail. Unified Commerce. Adaptive Retail. No matter the name, the message is the same: Customer-centric, interconnected, frictionless. It strives to seamlessly blend the convenience of online shopping with the immersive experience of visiting a brick-and-mortar store. Walmart, perhaps, said it best at this year’s Consumer Electronics Show when talking about this concept. “It’s retail that is not only eCommerce or in-store, but a single, unified retail experience that seamlessly blends the best aspects of all channels.” As we look at the final spoke of the Phygital Flywheel, our focus is on integrated omni tactics that can create that unified experience to accelerate sales growth across the Phygital space.
First, we need to understand that this is far from a singular focus on online touchpoints.
 | As McKinsey research notes, 60-70% of shoppers across all product categories expect to do their CPG shopping and product research both online and in-store. |
Phygital Retail. Unified Commerce. Adaptive Retail. No matter the name, the message is the same: Customer-centric, interconnected, frictionless. It strives to seamlessly blend the convenience of online shopping with the immersive experience of visiting a brick-and-mortar store. Walmart, perhaps, said it best at this year’s Consumer Electronics Show when talking about this concept. “It’s retail that is not only eCommerce or in-store, but a single, unified retail experience that seamlessly blends the best aspects of all channels.” As we look at the final spoke of the Phygital Flywheel, our focus is on integrated omni tactics that can create that unified experience to accelerate sales growth across the Phygital space.
First, we need to understand that this is far from a singular focus on online touchpoints.
As McKinsey research notes, 60-70% of shoppers across all product categories expect to do their CPG shopping and product research both online and in-store.
This means brands must prioritize integrated omni activation, creating a seamless and consistent experience for shoppers across different channels, leveraging the strengths of each channel to deliver the right message at the right time. To achieve omni integration and accelerate growth in the Phygital space, two areas are key: Shopper Marketing and Social. To help you get the most out of the Phygital Flywheel for your brand, following are some insights from MPG VP, Omnichannel, Tony Crecca.
The Evolving Role of Shopper MarketingWith the current complexity of consumer paths to purchase, and the exciting integration of technology and data analytics for greater consumer connectivity, Shopper Marketing is indispensable for brands in today’s competitive retail landscape. It requires a deep understanding of the consumer journey, the retail environment, and the competitive landscape. It also requires a flexible and adaptive mindset, as the retail world is constantly changing and evolving. Shopper Marketing continues to evolve to create seamless, personalized shopping experiences that align with shopper needs, preferences, and purchase habits. By making meaningful, relevant connections with target customers both on- and off-line, brands can foster loyalty and set themselves apart from the competition.
In the Phygital space, Shopper Marketing must transcend traditional boundaries to meet consumers with the right message, at the right time, wherever they are - whether at brick-and-mortar, via mobile app or laptop. Effective strategies leverage data-driven insights to identify key moments of influence along the consumer journey, from initial product awareness through to the point of purchase and beyond. They look to optimize digital channels to drive in-store traffic, and use geo-targeting strategies and deep analytics for more personalized marketing. The result: A strategic mix of in-store promotions, display ads, loyalty programs, digital marketing, geo marketing, and product placement, all tailored to influence the shopper's decision-making process.
While the principles of shopper marketing remain consistent across physical and digital channels, there are nuances that brands must consider when crafting campaigns for each platform. In-store, brands can leverage visually captivating displays, interactive demos, and personalized assistance to engage shoppers. Physically interacting with products can create a sense of discovery or excitement and encourage purchase decisions.
Online shopper engagement requires a different approach. Brands must focus on creating a frictionless user experience, leveraging targeted advertising, and using social media and influencers to build brand loyalty and drive sales. And for a growing number of retailers, a strong brand community is becoming the cost of entry. Therefore, it is crucial for brands to optimize their online presence. |
Phygital Retail: Some Key Shopper Marketing Tactics
Online ads. Online ads are a common way to reach and influence shoppers who are browsing or researching products online, or who are using online grocery delivery or pickup services. Online ads can be tailored to the shopper’s preferences, behavior, location, and purchase history, and can be used to drive traffic to a website, app, or social media pages, or to the retailer’s online platform. They can provide relevant information, offers, or incentives to the shopper, such as product features, reviews, ratings, coupons, discounts, or loyalty rewards. Online ads should be optimized for mobile devices, as many shoppers use their smartphones to shop online or to compare prices and products while in-store.
In-Store Displays. In-store displays are still a powerful tool to influence shopper behavior, especially for impulse purchases. Shoppers often look for displays at the end of grocery aisles or in the middle of larger areas to find seasonal or sale items, or to discover new products. Displays need to be visually appealing and engaging to catch the attention of shoppers, who have short attention spans and are often in a hurry. Display placement is also crucial, as it can affect the visibility and accessibility of the products if not in a high-traffic area, near complementary products, or by the checkout counter.
Geo-targeting.With geo-targeting, brands can reach the right audience at the right place and time, driving higher engagement and conversion rates. Location-based SMS campaigns have emerged as a powerful strategy to attract customers to physical stores. By sending SMS messages based on a customer’s location, businesses can inform them about nearby deals, promotions, or new product launches, encouraging them to visit the store in person. This personalized approach increases the likelihood of conversion and the overall campaign effectiveness.
Augmented Reality. Augmented reality marketing campaigns and rewards programs can also be successful in engaging consumers and driving sales.
The Rise of Social MediaAccording to Insider Intelligence, US social network ad spend will grow 13.5% to reach $82.88 billion in 2024, per our October 2023 forecast. And spending on social marketing activities over the next 12 months is expected to hit its highest level since the height of the pandemic.  Social media can be highly effective in building brand awareness, engagement, and loyalty among shoppers, especially younger generations. It can be used to showcase the brand’s personality, values, and story, and to connect with shoppers on an emotional level.
As advertisers seek more innovative ways to reach consumers on social, platforms are responding with new formats and features. For example, TikTok introduced search ads last year, which enables advertisers to serve ads alongside organic search results. Meanwhile, Snapchat is incorporating generative AI into its platform, allowing developers to use ChatGPT to create AR lenses.
At the same time, AI-powered algorithms have made individual user experiences on each platform more unique. For marketers, this makes having a deep understanding of the platform audiences and small communities within each more critical than ever before.
It’s also important to understand that Social has become a proving ground for new products. Brands need to know where and when to deploy, how to continue to leverage it, and how to connect it to broader marketing strategies, such as online ads, in-store displays, or email marketing. |
Phygital Retail: Some Key Social Media Tactics
Did you know? According to Morning Consult, over a third of US Gen Z consumers have purchased a product from an influencer-founded brand in the past year, followed by millennials (29%), according to Morning Consult. Think about:
Hyperlocal Campaigns, Niche Influencers. Increase your chances of connecting with your target customer through geotargeted influencer campaigns and influencers who are entrenched in regional trends and preferences.
Search.Think about optimizing search on your social media platforms. Consider: Nearly 40% of Gen Z preferred TikTok over Google for searching for information.
UGC Content. Social media can be used to generate user-generated content, such as reviews, testimonials, photos, videos, or hashtags that can increase the credibility and visibility of the brand.
Interactive and Immersive Experiences for Shoppers. These can include live streams, polls, quizzes, games, or contests that can increase the interest and excitement around the brand.
Social Commerce & Live Shopping. Live shopping is making a comeback in Social. During live shopping events, brands and retailers leverage platforms like Instagram Live to showcase products as customers watch and make purchases directly on social media. The US livestream shopping market was projected to surpass $31 billion by the end of 2023, and leading brands like Macy’s, Nordstrom, H&M, and Walmart have been quick to embrace the trend.
Phygital Retail requires a strategic and holistic approach to reach and influence shoppers. When putting together your omni-integrated activation plan, consider:
Understand the consumer journey: Today’s consumer journey is not linear, but rather dynamic and complex, as consumers use multiple channels and sources of information to make their decisions. It’s important for brands to map out the consumer journey for their target segments, and identify the key moments of influence, or touchpoints, where they can engage consumers with relevant and personalized messages. For example, a brand can use online ads, social media, or email marketing to create awareness and interest; in-store displays, product placement, or packaging design to create consideration and preference; and coupons, discounts, or loyalty programs to create action and retention.
Leverage data and technology: Data and technology are essential tools for creating omni-integrated shopper marketing campaigns, as they can help brands to collect, analyze, and act on shopper insights. Brands can use various sources of data, including retail media, social media, loyalty cards, and web analytics, among other sources, to understand who their shoppers are, what they want, how they behave, and where they shop. Brands can then analyze and interpret the data to create personalized and optimized messages and offers for each shopper. For example, a brand can segment shoppers based on their preferences, behavior, location, and purchase history, to deliver tailored ads, recommendations, or incentives to each segment.
Create a seamless and consistent experience: This is one of the main challenges across different channels and platforms. Ensure that your messages and offers are aligned and coherent across online and offline touchpoints, and that they are relevant and timely for each shopper. As we’ve said before, brands also need to ensure that their products and services are available and accessible across different channels and platforms, and that they are easy and convenient to use.