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Phygital customers in all your stores

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How to successfully bridge the data gap between physical and digital world and gain a holistic view of retail customers, by implementing the most innovative solutions.

Recent developments in retail industry

A lot has changed for the retail industry in the last 10-15 years. Digitalization has been a major driver of the transformation process, but the impact on the individual sales channels has been very different in terms of scope and dynamics. As a result, retailers operate in two somewhat separate worlds that struggle to be merged and communicate smoothly with each other.

  • Even though some technical innovations took place in physical stores, the primary focus has clearly been on the e-commerce business.

  • Online shops are set up quickly and cost-efficiently, while physical stores are deployed over 20 years, often without major changes.

  • Data from online shops is processed automatically and therefore always up to date, while data updates in the physical world only happen once per day and often overnight – sometimes even accompanied by a complete loss of data.

  • Technology behind online shops is easy to update and maintain, while physical stores typically operate on old legacy systems.

  • In addition, retailers often have two separate pipelines for deploying different solutions - one for their physical stores and one for their online shops, using different technologies and following different plans.

  • Testing and implementing a globally available online shop can be done on short notice, whereas in the physical stores, tests are done in a single store first, and if the solution works, it can be rolled out to all stores – not a problem with 10 stores, but with hundreds or thousands, the plan becomes very complex and difficult to execute.

So much regarding the internal and “homegrown” aspects. Beyond that, retailers also must face and respond to an external pull arising from digitalization, not only during the pandemic: increasingly heterogeneous customer preferences and purchasing patterns.

Personalization facing very heterogeneous preferences and behaviors

Customers interact with retailers more or less on a daily basis, some even more frequently. However, the clientele shows very different shopping behavior: many young people prefer to buy purely online, while elderly customers often have a lower digital profile and still tend to purchase locally – and the majority use both sales channels, online as well as on-site. And there’s greater demand for seamless and flexible omnichannel experiences by the day.

Nearly half (48%) of customers want retailers to remember their preferences and purchase history to provide a more personalized browsing experience. This is according to the latest Adyen Retail Report, which evaluated the preferences of 36,000 consumers from 26 countries in 2023. Still, 50% of consumers in Spain, for example, believe it is more difficult to classify customers by behavior and needs, as each one of us wants a personalized experience. However, consumer trust has reached a point where every detail and care in the purchasing process is of utmost importance.

As a result, retailers are looking for innovative ways to stay in tune with the dynamic of their consumers’ sentiments and behavior. Investment in personalization is proving essential, with data being the way forward. Up to 52% of the 12,000 businesses from 24 countries surveyed for the Adyen Report struggle to categorize shoppers by their needs. Only 27% of them use a customer relationship management (CRM) system to create more personalized journeys. And only 23% of retailers have central databases that map sales from all channels – leaving three-quarters of them being unable to connect transaction data from online and in-store.

Challenges

Under these circumstances: How can retailers connect physical stores with the online world to get a holistic view of retail customers? How to enable seamless communication between online and brick-and-mortar stores by sharing and transmitting data and information between the different sales channels in real-time? How to provide customers with a unique experience and treat them as the same person – regardless of which touchpoint they choose?

All these questions need to be answered as soon as possible because only retailers that successfully merge both worlds will be able to secure their place in a market, that offers a 1.5-billion-euro retail opportunity for unified commerce worldwide, as quantified by the Adyen Report, stating that retailers who used unified commerce in 2022 experienced an 8% revenue increase.

Also in Spain, digital transformation has played a key role in the growth of companies. Faced with enormous uncertainty, many companies have opted for innovation, process optimization, loyalty, and, in short, a more flexible and adaptable market.

Specifically, 30% of Spanish companies say that they have invested in unified commerce because it increases their sales and profits, and they believe that unified commerce increases customer loyalty. The benefits that this strategy can bring to companies are reflected in the opinion of Spanish consumers, with 63% saying that they would be more loyal to a retailer that allowed them to buy products online and return them at the store, for example.


Solution

As retailer, you can improve your personalization strategies with the use of data. Unified commerce allows you to better manage online and in-person data and draw more accurate conclusions from it. It connects real-time data from all your various channels, payment methods, brands, and regions into a single, centralized view.

Mimacom can help your company stay ahead of competition and identify your phygital customers. As an innovative company with over 24 years of experience in technology, data engineering and BPA, Mimacom has become an expert in retail industry, working with some of the most important retailers in different countries and with global presence.

Based on these projects, we have created a simple way to merge information between online and physical stores, sharing information in real time and enabling retailers to identify phygital customers. Our approach consists of 5 steps:

  1. Identify your data channels: We understand the channels that you use to share information for e-commerce and physical stores, and together we choose the solution for real-time communications that best fits with your organization.

  2. Identify your integration points: We work with you to identify the best points to share information between your e-commerce and physical stores to attract your phygital customers.

  3. Identify your connection points: We jointly select the various sources and sinks where information should flow between your e-commerce and on-site stores.

  4. Tailor your IT to support phygital customers: We use surgical precision to integrate the data into your systems, touching only specific points and respecting the same “contracts” you already use now (files, REST APIs, JMS systems, etc.).

  5. Manage your phygital customers: As a result of the steps above, you will manage your phygital users integrated in your systems and you will be able to start customizing their experience in all your channels and create new business opportunities.

Focusing on time to market, we prefer using cloud-based technologies to speed up the first physical store that manages phygital customers. Based on our experience and expertise, Confluent Cloud + Camel / Spring Integration standalone applications + Kafka Connect are usually the technologies best suited for developing these projects in a short period of time.

In each case, we tailor our solution to your specific needs every step of the way to ensure you get the most from our services. We are committed to working with you to make your business goals a reality.

Contact us today to learn more about how Mimacom can help you stay ahead of your competition.

Head of Retail

Nelo Puchades

Located in Valencia, Spain, Nelo is our Head of Retail and expert for Cloud in Spain. At Mimacom, Nelo helps leading Retail businesses to streamline their operations and improve their success.