To meet evolving customer needs and enhance operational efficiency, Canadian merchants are embracing “phygital” shopping in 2025—a seamless blend of digital and physical experiences. Digital methods are yielding quantifiable increases in revenue, consumer loyalty, and supply chain efficiency as the boundaries between online and physical commerce blur. Here are some ways this hybrid approach is transforming Canada’s retail landscape.
What is Phygital Shopping?
Phygital shopping is the fusion of the tactile, customized aspects of in-store shopping with the speed and ease of digital commerce. Retailers are combining physical storefronts and online shopping to create seamless, interconnected customer journeys rather than treating them as distinct channels. Customers can use this method to conduct online research, see things in person, and make purchases through the channel that works best for them. Frequently, they switch between digital and physical touchpoints multiple times during a single transaction.
Key Features of Phygital Retail
1. Unified Commerce Platforms
To coordinate inventory, payments, and consumer data across all channels, Canadian businesses are investing in unified commerce platforms. This provides clients with flexibility and convenience by ensuring real-time product availability and enabling services such as “buy online, pick up in store” (BOPIS) and “reserve online, try in store.”
2. Augmented Reality (AR) and Smart In-Store Tech
Consumers can see products before they buy them, thanks to augmented reality solutions like interactive displays and virtual try-ons. AR-powered apps have been introduced by retailers such as Sephora and IKEA, and in-store smart mirrors and RFID-enabled shelving offer real-time inventory updates and tailored suggestions.
3. Mobile Integration and Contactless Experiences
Mobile apps enable contactless payments, offer customized discounts, and guide customers through stores. The in-store experience is streamlined, and wait times are decreased by utilizing self-checkout kiosks, digital price tags, and QR codes—all essential components in increasing customer satisfaction.
4. Data-Driven Personalization
AI-powered analytics monitor consumer preferences and actions across multiple platforms, enabling merchants to offer dynamic pricing and customized promotions. This extreme customization boosts conversion rates and cultivates a sense of loyalty.
Measurable Benefits for Retailers
Supply Chain Efficiency: By offering real-time inventory visibility, phygital models enable retailers to minimize stockouts and overstocks, optimize stock levels, and use physical storefronts as fulfillment centers. For instance, Best Buy and Target save logistical costs and increase fulfillment time by supporting BOPIS and same-day delivery with linked inventory systems.
Customer Loyalty: Retailers foster repeat business and trust by providing consistent incentives, promotions, and support across all touchpoints. Personalized experiences increase engagement and give customers a sense of value. Examples include mobile app notifications and AR-powered product recommendations.
Sales Growth: Phygital techniques enhance conversion rates and basket sizes by reducing friction in the purchasing experience. According to brands, incorporating digital capabilities into physical stores can boost client retention and sales by 20% to 30%.
Operational Efficiency: Routine processes are automated, checkout is streamlined, and employees can concentrate on valuable customer interactions thanks to digital tools. This improves the entire shopping experience while simultaneously lowering labour costs.
Real-World Examples
- Sephora: Makes people shop how and where they prefer, by combining flexible pickup and delivery options with augmented reality virtual try-ons.
- Indigo Books & Music: Offers individualized in-store and online experiences through unified commerce and AI-powered suggestions.
- Walmart and Uniqlo: Utilize interactive kiosks and smart checkouts to expedite transactions and instantly deliver product details.
The Future of Phygital in Canada
By 2025, it is predicted that 75% of the world’s population will use augmented reality shopping tools, and Canadian businesses are well-positioned to spearhead this change. The phygital model, which offers seamless, personalized, and compelling shopping experiences that foster growth and loyalty, will become the new standard as technology becomes more accessible and consumer expectations continue to rise.
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Disclaimer: This article is based on publicly available information intended only for informational purposes. CanadianSME Small Business Magazine does not endorse or guarantee any products or services mentioned. Readers are advised to conduct their research and due diligence before making business decisions.
