The ‘phygital’ business

People still want to go to physical stores, but there will be a shift towards digital strategies.

Despite many people’s fear and lack of confidence in returning to the shops following the first wave of coronavirus, the last few months have demonstrated that people still want to go to physical stores, but also that there is a shift towards digital strategies. Videogames’ influence on other sectors has long been a reality, and retail draws on this with innovations that further push the boundaries of what is digital and what is physical.

Drivers of change

Digital natives, whether Generation Z or Alpha, have dramatically altered the panoramic of retail in the last few years. Both groups, bolstered by their technological prowess, have caused an unprecedented upheaval in physical stores, forcing them to adapt to the explosion of online sales and digital devices. In the U.S., 79% of smartphone users have purchased online using their device during the last six months, giving rise to the new phenomenon of “m-commerce” (Source: Outerbox, 2021). 79% of Spaniards made an online purchase during the month of December 2020 (Source: Annual E-Commerce Report 2020, IAB). 

However, this shift to online commerce has not satiated consumers’ craving to return to in-store experiences, especially now when buyers are looking for that human touch provided by in-person customer service. Retail Think Tank, an online trends portal, predicts that retail in the United Kingdom will improve over the second half of 2021 by way of growing sales, which are hoped to jump by around 3% on the year.

“The greatest mistake that many traditional retailers have made is treating e-commerce as a separate channel an creating separate experiences, metrics and incentives”.
Steven Dennis, President of SageBerry Consulting.

The result

The omnichannel experience (sales through different physical and digital channels) will take centre stage when planning the shops of the future, not just in how to project brand image and the products displayed in the physical space, but also how these interact with the rest of the brand’s digital channels. The shop will simply become one more step along the purchasing process which will link up with e-commerce or marketplace stores. As a consequence, technology will be more present. 

Even though shopping could end up being via a digital platform, physical stores will still be fundamentally important as a unique crossroad between user and product, where buyers can try and get to know each product in their own context. As such, shoppable spaces, such as hotels and restaurants, will also be important, where each product can also be bought online and which offer ground-breaking new ways to think of shops. 

New digital strategies grant consumers a greater ability to express their likes through product personalisation, making them an integral part of the design process and giving products and digital assets greater value as a representation of their lifestyle, values and status. Stores have the opportunity to fully realise the potential of smartphones and AR to create new points of contacts with the consumer, allowing them to enjoy immersive product experiences, both in-store and online. 

Design keys

Design for multiple realities

The digital and physical worlds unite, resulting in physical spaces with a large dose of virtual experiences, paying special attention to how things look on a screen. Materials, textures and illumination that are augmented by technology will blur the limits between what is real and what is virtual.

The 5 senses

Sensory and immersive designs with a digital influence offer a special twist, with proposals that combine different materials to invite users to touch them.

Evasion and escape

Sanctuaries of surrealist inspiration and rendered worlds that provide a visual alternative to a world that is increasingly chaotic, offering moments of calm and escapism.

New materials

Inspired by technology and seemingly futuristic, calling for consumers to partake in a sensory and visual experience.

Integrated technology

The omnichannel shopping experience will force us to think about how technology can help facilitate the shopping whole process.

Vivid spaces

Planting the idea of a store that is more than just a place where products are displayed, instead of being a place where shoppers can enjoy first-hand experience of the brand’s value proposal, with shoppable spaces turning physical restaurants or hotels into online shopping spaces.

Case studies

Rem Koolhaas and OMA created a sensorial physical space comprising four connected geometric room for the virtual edition of the Prada FW21 Women’s and Men’s Show in Milan, Italy, collaborating with Miuccia Prada and Raf Simons. 

Team: Rem Koolhaas, Giulio Margheri, Alex Tintea, Giada Zuan. Photography: Agostino Osio, courtesy of OMA.

The Spanish design agency Masquespacio was commissioned to design the interior of La Sastrería restaurant in Valencia’s old fishing neighbourhood, El Cabanyal-El Canyamelar. Decorated in locally handmade ceramic tiles, the design seeks to pay homage to the area’s traditional character while creating a new culinary and sensory experience.
Pieces Home is the house created by furniture company An Aesthetic Pursuit which has been described as an “experience designed to improve traditional Airbnb stays” and as an alternative to old-fashioned furniture shops where you can buy everything that you see in the house.

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Designed by Karvone, its latest interior project, a cafeteria in China, boasts accessories that appear to be floating belts, decorated with mirrors and reflective metals, terrazzo flooring and abundant greenery. The result is an immersive and dreamlike setting with a minimalistic appearance.

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The idea behind BoxbyPosti in Helsinki, Finland is to meet the neds of a world that sends less and less letters while sending more and more packages. BoxbyPosti set up a space where consumers can pick up orders, try on clothes, recycle packaging and request returns. Team: Emma Keränen, Anu Latvala, Sara Koivisto, Niina Sihto. Photography: Riikka Kantinkoski.