The Drum | How CPG & Fashion Brands Are Blending The ‘phygital’ Retail Experience

The Drum | How CPG & Fashion Brands Are Blending The ‘phygital’ Retail Experience

As part of our ‘Behind the future of retail’ content series, we look at how CPG and fashion brands are owning the ‘phygital’ retail experience to keep consumers connected.

Fashion and beauty brands have been straddling the physical and digital world for years, with many retailers struggling to blend the two experiences. While the Covid-19 pandemic accelerated fashion’s digital process, consumers are still waiting for seamless experiences and ultra-convenience.

Fashion retailers are no longer expected to passively sell clothes in a store or on a webpage. Beauty brands have been forced to innovate with new tools and virtual try-on techniques. In today’s connected world, brands need to be seen in both online and offline environments, be active community builders and hyper-personalize content to the consumer.

Research from Frog, part of Capgemini Invent, shows that 93% of consumers expect online shopping to be equal to or better than in-store, while 83% said if digital sites were improved, they would shop more online. Seamless integration of the online and offline paths is key in the new world of retail.

Luxury leading the way

Luxury fashion brands have rapidly adapted to direct-to-consumer (DTC) strategies after years of selling in high-end retail streets where the experience of buying is part of the parcel. Unfortunately for luxury fashion, DTC is a harder sell as consumers are unlikely to fork out after being exposed to online ads alone.

Nailing the consumer journey and carving out retail experiences that blend online and offline is even more crucial to luxury fashion than high street fashion. Therefore, the category has often been ahead of the curve with brands such as Burberry and Louis Vuitton leading the pack.

British fashion house Burberry is in a strong position despite a Covid-19 pandemic and the subsequent recession, due to its impressive digital transformation. When its stores shut during lockdown, Burberry managed to pivot and forge a digital-first omnichannel marketing strategy that evolves around different consumer touchpoints.

Burberry has been referring to this as ‘social retail’, based on the idea that people’s offline and online lives are linked. Tentpoles of its new approach include designing new store concepts, virtual appointments, client events and investing in omnichannel experiences.

The brand has also been experimenting with social commerce, for example using WeChat in China. Digital content is also used to inspire shoppers, so Burberry has incorporated video, animation and movement into interactive product stories.

DTC embraces bricks and mortar

Over the past two years, DTC retailers have realized they need physical touchpoints to keep consumers connected to the brand. Gymshark’s Regent Street megastore is a prime example. The fitness brand is a DTC darling that found early success through social and influencer marketing. In October, the retailer opened its first bricks and mortar store, selling apparel but also using the space to host classes and talks and as a base for Gymshark fans.

The brand has been experimenting with physical activations for some time as part of its community-building strategy. In September, it opened a pop-up barber shop and even ran a market stall staffed by the company’s chief exec selling discounted garments.

While Gymshark’s is a permanent store, a more common trend among DTC fashion brands has been to use ‘ghost-retailers’. Essentially, this is where DTC brands outsource the opening and running of a pop-up shop to another company – such as Leap, which has helped fashion brands including Naadam, Something Navy, Ashley Stewart, Birdies, Frank and Oak open pop-ups.

The omnichannel opportunity

It’s clear that the omnichannel opportunity for consumer-packaged goods, fashion, luxury and beauty brands is to innovate and integrate experiences across online and offline channels so that shoppers can enjoy a wide variety of products and services with convenient purchasing options.

“Capgemini, along with its partners, has created the ‘CornerShop’, where brands and retailers can demonstrate new concepts and emerging technologies, helping them evolve their omnichannel thinking and propositions,” says Steve Hewett, the vice-president and customer transformation and CX tech leader at Frog.

That includes being able to touch and feel products and get recommendations from trusted advisors. L’Oréal, for example, has been leading the charge when it comes to digital innovation in creating ‘phygital’ experiences, utilizing augmented products, offering virtual makeup try-ons and personalized beauty tips through partnerships with leading e-commerce platforms.

By taking a holistic approach to the retail experience that is driven by data, the brand has been able to explore new business models through online and offline social commerce and be present in the consumer journey wherever it unfolds (both at online and offline points of sale) to strengthen and accelerate the brand’s connection with consumers.

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