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Using AI To Bridge The Gap Between Online And In-Store Retail

Alan Gormley
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It’s no secret that eCommerce store owners around the world are constantly searching for new ways to enhance the customer experience. In order to do so, it’s crucial to pay attention to the rise of the 'phygital' shopping experience – where both online and offline stores support each other in increasing traffic by enhancing the customer journey.

Phygital, meaning the blurred line between physical and digital channels, can create a consistent omnichannel experience that can make the transition between offline and online shopping more seamless.

According to Forbes, “The growing phygital experience is becoming a powerful force in delivering convenient and relevant experiences to customers, especially post-pandemic.” It’s all about simplifying the buyer’s journey and making shopping much more convenient. For example, making use of phygital retail could give customers the option to choose their preferred shopping method, payment, and order fulfilment methods. This flexibility results in a better customer experience, more sales, and increased brand loyalty.

In this blog, we will discuss the benefits of syncing online and offline shopping, what your eCommerce store might be missing, as well as how AI recommender systems are driving this merge.

Welcome to the phygital era

“Phygital brings together the best of both worlds for a seamless transition, no matter where or how a customer is shopping.”Forbes

Phygital is not simply the latest buzzword in marketing, but rather a new era for every business to consider adopting, and fast. Consumers have become accustomed to instant gratification, and therefore a trip to a store needs to be worth the time and energy, with many researching prices and availability online beforehand. For this reason, retailers must rely on every tool they can to understand customer needs, optimise their customers’ time and best serve their ever-changing needs.

A phygital experience is one that maximises both online and offline to engage with customers in multiple touchpoints to grow repeat sales and merge the experiences that are only found in-store, as well as those experiences only found online. This gives shoppers the flexibility to choose how they shop, when they shop, and how they pay and complete their purchases.

It starts by making every interaction count. This omnichannel sales strategy helps retailers create a completely connected physical and digital storefront to boost sales like never before.

Creating phygital shopping experience by merging online and offline retail.

In-store touch points that might be missing from your eCommerce store

Retailers have certainly seen a rise in in-store visits post-pandemic. While the need for online shopping is still strong, the percentage of those wanting to visit physical stores shouldn’t be ignored.

In order to create the best possible phygital experience, are a few ‘quick fixes’ that might need solving first and foremost in order to mirror the in-store experience. Here are a few pieces of the in-store puzzle your eCommerce store could look to solve in order to improve the shopping experience on your online store.

Friction (Your shoppers are leaving without engaging with your store)

Unlike in-store shopping, online shopping can have many friction points that turn away ready-to-buy customers. Some of these points include out-of-stock, pricing discrepancies, bargain basements, endless product listing pages and undesirable homepages with boring copywriting or design.

Service (No shopping assistant to guide your shoppers)

One of the biggest reasons why customers may want to shop in-store is to receive service, help and advice. This can be easily solved with a friendly but unintrusive online shopping assistant, as well as a chatbot that can help with any questions that aren’t already answered on the FAQ page.

Overall a confusing shopping journey!

Oftentimes the customer shopping journey is ignored or created as a single journey. Every shopper is in a different journey stage which needs to be accounted for. Stores are sometimes too focused on taking customers to the finish line instead of bringing shoppers on a journey that best suits them and engaging them in real-time. The former can cause high bounce rates and cart abandonment rates. For example, eCommerce marketers may want to consider making the mobile shopping journey easier with great navigation and filtering.

Anonymous Browsing

New customers should get a feeling of excitement when they visit a physical store while returning customers should feel remembered. Anonymous and guest browsers should have such a good experience online that they turn into repeat customers. And you can do just that by adapting your store to every unique visitor. Shopbox is an AI recommendation model designed with the customer experience at its core, creating an AI-powered adaptive store for a tailored shopping experience – but more about that later on!

Omnichannel marketing examples for retail.

Bridging the gap between offline and online

So, how exactly does one make the transition between offline and online shopping more seamless? The answer isn’t a simple checkbox, but rather a continuous journey to discover what works best for your brand. Besides some of the simpler tasks such as creating a Google My Business Profile and a digital storefront on social media, here are a few other things to consider.

1. Invest in research to better understand your customers

Creating an immersive experience means diving deep into truly understanding what matters to your customers, and how they like to shop and interact with brands. Understanding this will help you create the best possible experience in a way that makes the most sense to your customers.

2. Take the best of both worlds and combine them

A strong phygital experience requires taking the best elements of your digital strategy and combining them with the best elements of a physical strategy. For example, do you have a solid social media following? If so, think of ways in which you could leverage your following to encourage in-store shopping and vice versa. Here are a few other exciting ideas:

  • Use QR codes in-store to point to special online offers or encourage website visits.
  • Make sure your website has a working map so visitors can locate your store.
  • Ensure your store is optimised for mobile so that your shopper can seamlessly shop wherever they are.

3. Give your customers options

The phygital experience is all about creating flexibility for your customers, so why not let them choose how they want to buy? Options such as ‘click and collect’ or ‘curbside pickup’ are great options to give those that want to experience both online and offline. The benefits of ‘click and collect’ are that it can reduce shipping costs but also could increase sales should the customer purchase something else while they’re in store too.

4. Integrate customer reviews

eCommerce marketers know how valuable product reviews are, so displaying them online is a no-brainer. But what about displaying digital reviews in-store? You could showcase digital reviews on signage next to certain products or display an iPad in strategic positions in-store, or perhaps add a QR code next to products for shoppers to easily scan and learn more. All of these ideas can help customers make their buying decision faster.

Example of ai recommendations for online retail.

Taking The In-Store Experience Online With AI

Making use of AI is one of the fastest ways to implement a phygital experience – and a successful one at that. The beauty of AI is that there are endless options to suit various business models.

Of course, our favourite, and a firm favourite among hundreds of businesses worldwide is the AI Shop Assistant. We all know that recommendations can lead to increased sales as a result of a better shopping experience, but McKinsey reports that personalisation drives up to 15% more revenue and improves marketing-spend efficiency by up to 30%.

These integrations work on highly-personalised recommendation engine algorithms that create tailored website journeys to bring the best of the in-store experience, online. It’s one of the best conversion optimisation tools on the market because it gives the customer exactly what they are looking for – a great, easy online shopping experience.

Integrating an AI recommendation platform gives marketers a bigger and better idea of what a shopper likes, creating a stronger connection by recommending the right products based on a number of factors, not to mention increasing the customer lifetime value.

Time to get phygital with AI?

It’s no longer the product that is at the heart of any business – it’s the customer. The best phygital experience understands customers’ needs at a deep level and provides the right digital tools and in-person experiences to allow the customer to move between the channels seamlessly.

Brands that succeed in incorporating emotion, ultra-personalisation, surprise and entertainment in their phygital strategy are those that will ultimately take industries by storm, using improved customer experience as the key differentiating factor. Our AI recommendation integration, Shopbox, can help you get there faster.


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