What: Retail and consumer packaged goods (CPG) companies are increasingly adopting "phygital" strategies, merging digital experiences with physical shopping to enhance customer engagement and sales.

Why it is important: The phygital approach addresses challenges like rising competition and changing consumer expectations by offering personalised, convenient, and interactive shopping experiences, which can lead to increased sales, reduced returns, and improved customer satisfaction.

The article explores the concept of "phygital" shopping, where digital and physical retail experiences merge to create a seamless and engaging customer journey. This approach is becoming essential for retail and CPG companies facing fierce competition and evolving consumer behaviours. By integrating technologies such as augmented reality (AR), retailers offer personalised experiences that allow customers to visualise products in their own spaces before purchasing. For instance, brands like Warby Parker and Ikea use AR apps to let customers try on glasses or place furniture virtually in their homes. This not only reduces inventory needs but also enhances personalisation, leading to higher customer satisfaction and lower return rates. The phygital model also caters to the convenience demanded by modern consumers, particularly busy parents who benefit from the ability to shop from home with accurate product visualisations. Moreover, this strategy provides valuable data for retailers by tracking consumer interactions with products in a virtual environment. As phygital experiences become more prevalent, they are expected to reshape the retail landscape by blending the best of both digital innovation and traditional shopping.

Phygital revolution: merging digital and physical retail