Written by Alexa Ellis, Director of Marketing & Growth, January 8, 2025

Retail isn’t just evolving—it’s transforming into a hybrid experience where digital customer experience meets physical in-store experience. This new era, known as "phygital" retail, blends online convenience with in-store engagement to deliver seamless customer journeys.

What Is Phygital Retail?

Phygital retail bridges the gap between physical and digital shopping experiences. It’s about creating touchpoints where customers can engage with your brand on their terms—whether through an app, an in-store kiosk, or augmented reality (AR). Retailers who master this blend offer customers the best of both worlds: the tactile, immediate satisfaction of in-person shopping and the personalization and efficiency of digital.

Key Trends Driving Phygital Retail

1. AI-Powered Personalization Tools like in-app product recommendations, tailored to your purchase history and in-store behaviors, are making retail feel personal, even in a crowded environment. By blending digital insights with physical presence, retailers can deliver hyper-relevant suggestions in real-time. Have you ordered from Starbuck’s recently? If so, you’re already experiencing the power of AI personalization. The app integrates AI to send tailored offers based on past orders, the time of day, or customer preferences, which can be redeemed seamlessly in-store.

2. Augmented Reality (AR) In-Store Experiences Imagine walking into a store and pointing your phone at a product to instantly see customer reviews, styling tips, or product specifications. AR is transforming in-store shopping by adding a layer of digital interaction, enhancing decision-making, and reducing returns.  One company embracing AR In-Store Experiences is Sephora Virtual Artist. Sephora enables customers to use AR to "try on" makeup virtually through their app or in-store kiosks, helping shoppers choose the perfect shade before buying.

3. Buy Online, Pick Up In-Store (BOPIS) Redefined Click-and-collect has grown beyond convenience. Phygital solutions now let customers use apps to reserve fitting rooms, virtually “try on” items before pick-up, or schedule consultations with in-store associates. One trailblazer in BOPIS is Nordstrom’s Reserve Online, Try In-Store service. Nordstrom allows customers to reserve items online, which are then held in fitting rooms for in-store try-on. This adds convenience while still offering the tactile experience of in-person shopping.

4. Smart Stores and IoT From cashier-less checkout to interactive kiosks that display dynamic content based on who’s browsing, smart store technologies make shopping fast and frictionless. The most well-known example of this trend is Amazon Go Stores. These cashier-less stores leverage sensors, cameras, and AI to let customers pick up items and leave without waiting in line. The bill is automatically charged to their Amazon account.

Why Phygital Retail Matters

Customers no longer separate "online shopping" from "in-store shopping"—they see it as one experience. The brands that succeed are those that break down barriers, creating a unified journey where each channel complements the other. By embracing phygital solutions, retailers can not only meet modern expectations but also build deeper, more loyal relationships with their customers.

At Stratfield Consulting, we specialize in helping retailers craft strategies that bridge the digital and physical divide. Whether it’s designing personalized in-store or in-restaurant experiences, developing strategies for leveraging AI for a better customer experience online, or integrating omnichannel solutions, we know what it takes to thrive in the phygital era. Let’s make your customer journey truly seamless. Contact us today!