Home Insights Era of the ‘phygital’ starting to gain momentum
Era of the ‘phygital’ starting to gain momentum

Era of the ‘phygital’ starting to gain momentum

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It is one of the megatrends GPT predicted two years ago that would impact the property sector in the coming decades, the merging of the online and physical environments.

A report published by GPT in conjunction with the CSIRO in 2013 predicted that traditional ‘bricks and mortar’ retailers in the future would look for property formats that enabled them to integrate their online and offline strategies. These formats would allow mobile integration, virtual change rooms, parcel pick-up facilities and in-store technologies that were connected to the internet.

Two years on, this trend is no longer a prediction. It has fast become a reality, with technologies such as phone Apps for ordering food and beverage, iBeacons to send in-store messages to shoppers and click-and-collect locations are all already becoming common place in retail stores and shopping centres.

While the growth of online retailing is showing signs of slowing – having grown at nine per cent in the past year compared to 29 per cent per annum three years ago according to NAB figures – the so-called era of the “phygital” is just starting to gain momentum, which will significantly shape the future of retailing.

As the CSIRO scientist Stefan Hajkowicz, who collaborated with GPT on the original report, says in his latest book on megatrends: “The transformative aspect of the virtual world isn’t just the data. It’s also the new sensory devices, new gadgets, new software and – perhaps most importantly – the new connectivity on the worldwide web between all these entities.”

Hajkowicz says the exponential growth in devices and datasets that could be plugged into the internet would be behind this growth. “The exciting, and perhaps a little scary, thing is that it’s hard to see a ceiling to this exponential growth in digital connectivity,’’ says Hajkowicz.

This increased connectivity is already available in shopping centres, whether it is a shopper being able to order from a coffee shop through their phone, retailers being able to change shelving price points from their computers or shopping centre owners being able to send push notifications to shoppers in specific locations through the centre.

There are a number of retailers starting to use digital technology to enhance their customer experience, such as handing shop assistants tablets that allow them to check stock levels, undertake transactions and provide information without being stuck behind a counter.

Cisco says the connection of physical objects to the digital world – also known as the Internet of Things – already promises 800 “variations” or combinations of possible shopping journeys. This compares to 40 in the e-commerce era and three in the pre-internet shopping era. These variations include a mix of options such as self-checkout, mobile device payments, interactive kiosks, live video, secure pick-up lockers, phone apps and so on.

There are thousands of other variations on how the Internet of Things will shape the entire digital world beyond the list of possible shopping journeys. Retailers could use data extracted from the physical world to analyse how shoppers move through their stores, measure customer density and conversion rates. They could also find ways to better connect or provide information to customers – whether it is virtual mirrors that provide additional information to customers in change rooms or retailers sending in-store messages to handheld devices or wearables.

Ultimately, it will be up to shopping centre owners such as GPT to use the information they learn from the “phygital” to make more informed decisions on how we can design centres to create more connected communities for the future.

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