5 Qs With Max Fashion’s Jiten Mahendra On Building A Phygital Retail Brand
Amalgamating the best elements of e-commerce and a real-world brick-and-mortar store, this new blend of digital and physical is disrupting the marketing landscape in more ways than one. There’s no better joy in experiencing the instant gratification of shopping needs, without having to wait for days, through the convenience of online shopping today. This is exactly why this model is a preferred choice for the current set of consumers.
Jiten Mahendra, Senior Vice President Marketing, Max Fashion agrees that there is an apparent shift in the retail industry that has evolved from traditional models that siloed the physical and digital into distinct channels to the current model. Expounding how the retail industry has panned out over the years, he shares that the initial phase was driven by 3P’s out of 8P of marketing, i.e. Product (assortment/syncing fashion with Indian sensibilities), Place (acquiring location on High streets or in Malls) and Price (ensuring that the brand can create a push to the immediate audience it wants to cater to and Pull the lower segment).
The next phase, he adds, was driven by the remaining 3P’s- Promotions (driven by reward program as a tool to increase Frequency and ATV by giving reward points redeemable on the next purchase), Productivity and Processes to Increase basket size, conversion, achieve stock liquidation to ensure freshness and finally to achieve the targeted SPF.
The current phase is lead by 2P’s- People and Physical Evidence (customer experience). The customer has become Omni. Hence, brands were forced to create an Omnichannel experience, so the siloed journey of online and offline need to be merged, and that is the reason for the push on phygital initiatives to upgrade the customer experience. And this is only possible if people are trained and able to handle multichannel customer journey merging at the stores.
"The pace of the above journey increased by 3X due to the pandemic", he asserts.
Further giving us insights to build a successful phygital brand, Mahendra highlights in an invigorating discussion with us.
Excerpts:
Q1. Not too long ago, omnichannel marketing was heralded across the board as being the best marketing model for retailers. But the tides have changed. Retailers are going after phygital retail now. Do you agree?
Omnichannel lead to channel-centric strategy. Due to the pandemic, brands realized that a unified customer experience was required as all channels were forced to converge to meet customer requirements. In this sense, phygital retail becomes more important to leverage the existing assets and build a profitable business model.
Q2. What are the key opportunities & challenges when a brand decides to enter phygital retail?
Upgrading customer experience is the only sole objective for phygital retail to create business impact.
Key Challenges
Mapping customer journeys across channels to create relevant communication and experience (single view of the customer) is tough. The most informed customer interacts with the store associates (weaker link), and the customer experience faces turbulence.
Customer metrics are still defined at the channel level, so the holistic NPS is missing, and with customers becoming omni, this is becoming more critical. SCM integration between channels (single view inventory), POS integration across channels (wallet integration between offline and online or Loyalty points redemption across channels) are other key obstacles.
Opportunities
Omnichannel customer's ABV (Average Bill value) is always higher than either offline or online channel customers.
Loyalty with the brand increases as they have experienced the brand across the channel and this leads to more category penetration and increased frequency of interacting with brands, sell-through of stocks, and consolidation across channels becomes seamless. This leads to more fresh stock, which facilitates the conversion and increases Customer experience.
Q3. How are marketers accommodating the new integration of the digital into the physical? What strategies are they deploying?
The pandemic has made marketers understand that a customer's relationship is with the brand and not with a channel. Therefore, brand attributes need to be unified. Strategies are now being built around digital and physical fusion. Leveraging features like click and collect, get your size, and endless aisle turn out as brand USP.
Brand authenticity has become paramount. Hence, unified promotion and pricing across channels are critical. Integrating loyalty program features across the store, e-commerce websites and app will help build a seamless unified experience.
Q4. What are some of the phygital retail technologies that brands are leveraging today?
Brands are working on unifying and creating a single view of the customers by deploying – CDP and DMP. Data is another area for further innovation where dynamic data stories will be replacing static dashboards. It’s impossible to talk about marketing in 2021 without discussing artificial intelligence (AI) and machine learning (ML), opening up further possibilities for delivery and service.
Q5. What are the ingredients that make for a successful phygital retail brand? How can marketers create an exceptional phygital experience for their customers?
Marketers need to get tuned into their customers through the below:
Trust: Orchestrate and honor customer data preference and have control over the data
Unify: Unify a single view of the customer to achieve customer experience
Now: Use real-time data to create relevant customer conversations
Everywhere: Deploy CDP to ensure a relevant & consistent experience across all channels
Delight: Create a frictionless shopping experience
