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WHAT IS Phygital Commerce?
Phygital Commerce is a new economic model for physical stores that have fundamentally broken the traditional economic model – no stock = no sale. It is a model inspired by the long tail of e-commerce but applied to the world of stores.
Please note, phygital commerce has nothing to do with online commerce. It’s a whole new paradigm.
Maxence Dislaire says: “the art of marketing an offer that does not weigh on the costs of the store; rents, stocks, logistics linked to shelving.”
WHY IS phygital COMMERCE A RUPTURE FOR BRICK AND MORTAR?
The Phygital Commerce will impact your business model through interactive devices in place such as range extension terminals, mobile phones and tablets, or even phygital merchandising. But its most powerful strength lies in the invisible part that is intrinsic to your business.
- Compared to stocks in store because it allows to play on 2 levers:
– The rent, handling, logistics, facing or even the replenishment that generates a stock in store
– Debt versus in-store storage
- It is often said that a product that stays in store for more than 60 days is a product made for the phygital trade. Indeed, a product with a slow sotck rotation called “slow mover” is a brake for each store and becomes a burden in your cash flow.
- Historically, stores are structurally limited by their m². They cannot sell more than what they have within their walls.
The long-tail phenomenon, explained here by Cédric Durcroq, cannot be applied to the concept of the traditional brick and mortar business store.
However, nowadays, the criteria of consumer requirements have evolved. The latter wish to have more and more choices as they find in online commerce. Thus, having more choice becomes a competitive advantage than not having any at all. This will prevent customers from going more easily on the platform of the one we no longer want to call: Amazon.
To achieve IT, 2 axes must be taken into account. 2 axes which remain complementary and essential to the success of a phygital project.
EQUIP VENDORS and SALES TEAMS
This is what we call Passive phygital. Phygital plays no role in the discoverability of the supply. Its objective is not proactive in promoting the invisible offer. Indeed, the so-called passive phygital implies that it is the client who acts first.
TRANSFORM THE STORE WITH INTERACTIVE DISPLAY
We are talking about proactive phygital here because the furniture in the sales area will play a major role in promoting the offer, brands and products.
Therefore, the choice of furniture is important because it is the latter that will attract customers. Each of the furniture devices offered by IMPROVEEZE is designed for the customer, where mobile salespeople are designed for sales teams.
HOW TO MAKE THE INVISIBLE VISIBLE?
Several studies have revealed that there are 2 typologies of purchasing behavior: rational behavior and emotional behavior.
- Rational purchasing corresponds to purchases meeting a need. I do not have the license and I have to move, so I need a bike or an electric scooter for example.
- Emotional buying, on the other hand, is more complex. Indeed, for this type of customer, the story around the product will play a major role in the purchase decision. The translation of most if not the majority of emotional purchases is the “crush” or “crack”.
These emotional purchases cannot be controlled and even less predicted, which certainly makes them the black spots of traditional commerce today.
Indeed, traditional physical commerce suffers cruelly from a total lack of emotional transfer. This can be seen in particular through an article by Olivier Dauvers and the striking example of the Christmas Cake. Who has never been disappointed between the packaging and the reality of the product? It is therefore essential to ensure that products that fall under rational buying behavior and emotional buying behavior equally satisfy consumers.
DIFFERENCE BETWEEN PHYGITAL COMMERCE AND E-COMMERCE
Whether on one side or on the other, everything changes. From the way to understand its implementation to the way it evolves to the user by the customer or the sales teams.
HOW TO GET INTO ACTION?
To successfully transition to the phygital trade, it is essential to take into account the following points.
- Surround yourself with people and companies who have measurable experience in phygital commerce like IMPROVEEZE. Do not underestimate this part because the phygital trade is still today a new profession and the pitfalls are numerous.
- Start with a simple project whose ROI will be easy to prove and achieve . A phygital project, the implementation of which will allow your brand to develop skills in the phygital professions.
- Identify a product category suitable for phygital commerce. Here are good candidates: bulky products, slow mover, high-priced products ...
- Choose a solution that is made for phygital commerce and not for online commerce.
