Introduction
In today’s rapidly changing world, businesses must constantly evolve to stay relevant, especially in the Fast-Moving Consumer Durables (FMCD) sector. For years, brands in this industry relied on traditional brick-and-mortar stores to showcase their products, but with the rise of e-commerce and shifting consumer behaviors, that’s no longer enough. The modern consumer craves a hybrid experience where the physical and digital worlds converge. Enter “phygital,” a buzzword that’s now becoming the standard for companies wanting to provide a seamless experience.
So, why has phygital become so essential for FMCD businesses?
What does it mean for both brands and customers and how can it address the ongoing shift in behavior?
Phygital - Taking over the FMCD Scenario
Phygital is a blend of the physical and digital worlds to create a unified and seamless experience for consumers. It integrates the best aspects of both in-person and online interactions, enhancing the customer journey across multiple touchpoints. The term is derived from merging “physical” and “digital,” and it refers to the way businesses create interconnected experiences that cater to the modern consumer’s need for convenience, speed, and engagement.
In practice, phygital experiences can include things like:
- Augmented reality (AR) in retail stores: Customers can use their smartphones to virtually try on clothes or see how furniture would look in their homes.
- Click-and-collect services: Shoppers can buy products online and pick them up at a physical store, blending the online shopping experience with the immediacy of in-store pick-up.
- Smart kiosks in stores: Customers can access product information, compare features, or check stock availability through interactive screens, bridging the gap between the physical store and the digital world.
So, what exactly does phygital mean in the context of FMCD? At its core, it’s about integrating the digital tools consumers use every day into physical retail experiences and vice versa. Phygital combines the speed and efficiency of digital with the tangible, sensory experiences of the physical world.
In practice, this could take many forms. For example, customers might interact with augmented reality (AR) apps to see how a new piece of home equipment fits in their kitchen before visiting the store. Or they might use QR codes in-store to get detailed product information on their phones, allowing them to compare features without needing to consult a sales associate.
For businesses, especially in sectors like FMCD (Fast-Moving Consumer Durables), the phygital approach allows for a more personalized and fluid shopping experience, leading to better customer engagement, increased sales, and a stronger brand presence.
In short, phygital is about making the customer experience more connected, interactive, and engaging by leveraging the strengths of both physical and digital environments.
Recognizing The Need For Phygital
The growing need for Phygital experiences in the FMCD (Fast-Moving Consumer Durables) industry stems from significant shifts in consumer behavior, market demands, and technological advancements. The convergence of physical and digital touchpoints is becoming essential as businesses aim to meet evolving customer expectations for convenience, personalization, and seamless interaction.
Why Phygital Experiences are Crucial for the FMCD Industry?
1. Consumer Behavior Shift:
Today’s consumers demand a unified experience. They no longer see physical stores and online shopping as separate entities. In an article by SAP, nearly 85% of customers expect consistent interactions across both digital and physical channels. The FMCD sector, which involves products like home appliances, electronics, and other durable goods, is adapting to this demand. Customers often research products online, experience them in-store, and vice versa.
2. Increased Use of Digital Tools:
The rise of mobile devices, e-commerce platforms, and social media has changed how consumers interact with brands. By offering a phygital experience, FMCD companies can provide digital features like AR-enabled product views, virtual try-before-you-buy options, and in-store tech-based assistance, increasing engagement. For instance, Samsung and Mitsubishi have introduced AR apps for home appliances, allowing customers to visualize how a product will fit in their space before visiting the store.
3. Personalization and Convenience:
In an industry where products like washing machines, refrigerators, and air conditioners involve significant consideration, personalization and convenience are key. Phygital experiences blend the best of both worlds, providing personalized digital assistance (e.g., AI-powered recommendations) while offering the tangible experience of physical stores. A 2019 study by Accenture found that 91% of consumers are more likely to shop with brands that provide relevant offers and recommendations.
4. Bridging the Research and Purchase Gap:
FMCD purchases often involve significant research due to their long lifespan and higher price points. Consumers research online, check user reviews, compare features, and visit stores to physically experience products. Phygital experiences bridge this gap, helping customers complete the journey with “click-and-collect” or “buy online, pick up in-store” (BOPIS) options. According to Retail Dive, 67% of customers have used BOPIS services, indicating the importance of merging physical and digital interactions. Not just that, businesses have also implemented ROPIS models for a better purchase experience.
5. Post-Pandemic Shopping Behavior:
The COVID-19 pandemic accelerated the adoption of digital channels and shifted consumers toward a hybrid shopping model. As restrictions lifted, consumers began seeking out physical interactions again but with the expectation that digital conveniences would remain. In the FMCD industry, this means creating experiences that combine the immediacy of in-store interactions with the ease of online browsing and purchasing.
Some FMCD Consumer Behavior Shifts To Look For!
The Fast-Moving Consumer Durables (FMCD) industry is witnessing significant shifts in consumer behavior, driven by rapid digitalization, increased environmental awareness, and evolving expectations around convenience and personalization. Understanding these trends is crucial for businesses looking to stay competitive and align their strategies with the needs of modern consumers.
Here’s a closer look at the latest trends and shifts in consumer behavior in the FMCD industry:
1. Rise of Digital and Omnichannel Shopping
The pandemic accelerated the adoption of digital channels, and this behavior is here to stay. Consumers now expect to seamlessly move between online and offline touchpoints when making purchasing decisions. The concept of omnichannel retailing – where customers can browse online, purchase in-store, or vice versa – has become the norm.
According to Mailmodo, 63% of shopping journeys now start online, even if the final purchase happens in-store. You can see how Apple has perfected its omnichannel strategy by offering seamless integration between its online and physical stores. Customers can browse and configure products online, book in-store appointments for hands-on experience, and make in-store pickups after purchasing online.
Consumers also expect advanced features like click-and-collect (buy online, pick up in-store) and same-day delivery. For FMCD products, such as home appliances and electronics, consumers often start their research online but still prefer to experience the product in-store before purchasing.
2. Demand for Personalized Experiences
Today’s consumers are seeking more personalized experiences when interacting with brands. This shift is particularly strong in the FMCD sector, where consumers expect product recommendations, targeted marketing, and tailored customer service based on their preferences and past behaviors.
A McKinsey report found that 71% of consumers now expect companies to deliver personalized interactions, and 76% get frustrated when this doesn’t happen. Brands like Samsung offers an AI-powered recommendation engine on its website, which suggests products based on browsing history, preferences, and previous purchases. This personalization helps consumers navigate a wide range of products and increases the chances of conversion.
With technologies like artificial intelligence (AI) and big data, FMCD companies are now capable of gathering and analyzing customer data to offer more personalized shopping experiences.
3. Sustainability and Ethical Consumerism
Consumers are becoming more aware of the environmental and social impact of their purchasing decisions. Sustainability and ethical considerations are playing a significant role in shaping consumer preferences in the FMCD industry, particularly in sectors like electronics and home appliances where environmental concerns are prominent.
According to Capgemini, 79% of consumers are changing their purchase preferences based on the social responsibility, inclusiveness, or environmental impact of a brand. LG Electronics has launched its “Life’s Good” sustainability initiative, which includes using eco-friendly materials, reducing energy consumption, and ensuring responsible waste management in its products. This resonates with environmentally-conscious consumers who prioritize sustainability when making purchasing decisions.
In response to these concerns, brands are increasingly offering eco-friendly products, embracing circular economy practices (e.g., repair, recycle, and refurbish), and promoting energy-efficient appliances.
4. Shift Toward Contactless and Self-service Technologies
Post-pandemic, there’s been a noticeable shift toward contactless shopping and self-service technologies, which allow customers to engage with brands in a safer, more convenient manner. In the FMCD space, this includes innovations such as self-service kiosks, touchless payments, and AR/VR technologies for virtual product trials.
A study by Statista shows that the global AR market is expected to reach $198 billion by 2025, as more industries adopt AR for shopping experiences. IKEA has integrated AR into its app, allowing users to place furniture in their homes virtually before buying. This provides a contactless shopping experience while enhancing consumer confidence in their purchasing decisions. Additionally, smart stores and automated retail are emerging, where consumers can purchase FMCD products using AI-driven, cashier-less checkout systems.
5. Phygital Integration and Hybrid Customer Journeys
As discussed earlier, the convergence of physical and digital (phygital) experiences is becoming more prominent in the FMCD industry. Consumers expect hybrid customer journeys that allow them to seamlessly interact with brands both online and offline. The blending of these two worlds creates a more cohesive and engaging experience.
Research by Wisernotify indicates that 80% of consumers expect retailers to provide a consistent experience across all channels, whether they are shopping online or in-store .
Best Buy is an excellent example of how an FMCD company has embraced phygital experiences. The company introduced AR features in its app, allowing customers to visualize how electronics would fit into their homes. In stores, Best Buy offers self-service kiosks for customers to check inventory or read product reviews while physically browsing. The seamless integration of these online and offline experiences has helped Best Buy increase customer satisfaction and engagement.
6. Demand for Smart Products and IoT Integration
Smart home devices, wearables, and other connected FMCD products are in increasing demand as consumers seek more integrated, automated, and intelligent solutions in their homes. With the rise of the Internet of Things (IoT), customers want appliances that can communicate with each other and be controlled remotely.
The global smart home market is expected to show a CAGR of 10.67%, resulting in a projected market volume of US$231.6 Billion by 2028, as per Statista. Brands like Bosch and Whirlpool offer smart home appliances that integrate with voice assistants like Amazon Alexa and Google Assistant, enabling consumers to control their refrigerators, washing machines, and dishwashers with simple voice commands or via mobile apps. The convenience of smart products and the potential for energy savings are key factors driving consumer interest in these technologies.
Enter Commerce and DXP Migration Services for FMCD Businesses
Commerce services and DXP (Digital Experience Platform) migration can play a transformative role in helping FMCD businesses capitalize on the evolving trends in consumer behavior. With the shift towards personalization, omnichannel shopping, smart product integration, and sustainability, FMCD companies need to adopt digital solutions that can handle these complex demands and enhance customer experience.
Let’s dive into how commerce services and DXP migration can help FMCD businesses maximize their potential and align with the latest industry trends.
1. Optimizing Omnichannel Experiences Through Commerce Services
The rise of omnichannel shopping isn’t just a buzzword; it reflects a fundamental shift in consumer behavior. Customers now expect seamless experiences across all touchpoints, whether they’re engaging with a brand online, via mobile, or in-store. In the FMCD space, this means creating unified experiences where customers can effortlessly interact with product catalogs, order items, or access customer support across platforms.
How commerce services enable omnichannel success:
- Headless commerce:
The decoupling of the backend (data, product catalog, transactions) from the frontend (user experience) allows FMCD businesses to tailor their customer interactions more flexibly. Headless setups give brands the freedom to integrate with multiple touchpoints – such as smart home devices, AR interfaces, and in-store kiosks – without needing to rebuild the entire backend infrastructure. This agility is especially valuable in the FMCD space, where product ranges can vary greatly and need to be displayed in different contexts.
Under Armour adopted headless commerce to unify their digital and physical shopping experiences. This setup allows them to engage with customers in new ways, including offering personalized training tips via mobile apps, sending alerts for in-store inventory availability, and integrating with wearable fitness devices. By leveraging headless commerce, the brand not only streamlined its customer touchpoints but also scaled its operations more efficiently across regions.
- Omnichannel commerce for FMCD:
With omnichannel commerce platforms, FMCD companies can bridge online and offline experiences, offering customers the ability to check product availability online and reserve in-store pickups. For high-ticket FMCD items, such as home appliances or electronics, this feature can drastically reduce cart abandonment rates.
Lowe’s has been a frontrunner in omnichannel retailing by enabling customers to check stock availability at local stores and offering an intuitive Buy Online, Pick Up In-Store (BOPIS) option. The integration between their digital and physical storefronts has resulted in greater customer convenience, improving conversion rates.
2. Enhancing Personalization and Customer Engagement with DXP Migration
With customer expectations on the rise, FMCD brands must use Digital Experience Platforms (DXPs) to deliver relevant, personalized content across multiple channels. DXPs provide a unified way to manage and orchestrate experiences, combining data from various customer touchpoints into actionable insights.
- Centralized content management:
One of the biggest advantages of DXP migration is the ability to centralize content creation and distribution. For FMCD businesses with large product lines, managing content efficiently is key. A unified DXP can reduce the manual workload involved in managing product descriptions, multimedia content, and customer reviews, while ensuring that the right content is delivered at the right time.
- Advanced personalization with AI:
Many DXPs now incorporate AI and machine learning tools that can analyze vast amounts of customer data to provide individualized recommendations. FMCD brands can use this data to engage customers with personalized experiences based on previous purchases, browsing behaviors, and even external factors like seasonality.
Brands can consolidate their digital presence across various regions! By leveraging their preferred vendor’s AI capabilities, they can deliver tailored product recommendations for electronics, appliances, and entertainment products based on user preferences and market trends.
- Customer data integration:
DXPs enable FMCD businesses to unify customer data from different sources, including eCommerce, CRM systems, and social media. This holistic view of the customer allows brands to craft more personalized, timely marketing messages. For example, a customer purchasing a home appliance online may receive personalized tips on maintaining that product, or targeted offers on complementary items like accessories.
3. Leveraging Data-Driven Insights to Optimize Sales and Marketing
One of the cornerstones of effective digital transformation is the ability to leverage data to make informed decisions about customer behavior, inventory management, and sales. By using predictive analytics, AI, and machine learning integrated into commerce services and DXPs, FMCD businesses can stay ahead of consumer trends and better allocate resources.
- Predictive sales forecasting:
AI-driven predictive analytics can help FMCD companies anticipate demand more accurately, optimizing supply chain efficiency and reducing overstock or stockouts. This is particularly crucial for high-value consumer durables, where inventory turnover rates may be slower than FMCG products, making precise forecasting essential.
Procter & Gamble uses predictive analytics tools to anticipate customer demand for home appliances and other FMCD goods. By analyzing purchase data, search trends, and external factors like economic conditions, P&G can better manage its supply chain and marketing strategies.
- Data-driven marketing:
With DXP platforms providing detailed customer insights, FMCD companies can refine their marketing efforts, targeting individuals with more relevant messages and product offerings. Real-time data allows brands to adjust their marketing strategies dynamically, ensuring that they can respond quickly to changing consumer preferences.
Dyson uses a unified digital platform to monitor how consumers engage with their products across different regions. This data is then fed into their marketing campaigns, allowing them to fine-tune product messaging based on local preferences and trends.
4. Ensuring Scalability and Flexibility with Modern Technology
As FMCD businesses grow and their operations expand, having flexible and scalable digital infrastructure is crucial. Modern commerce services and DXP platforms are designed to support growth by offering cloud-based, API-first architectures that can handle increasing traffic and complexity without sacrificing performance.
- Cloud-based scalability:
With the rise of cloud computing, platforms like Adobe Commerce or Salesforce Commerce Cloud enable FMCD brands to scale their operations quickly. This ensures that businesses can handle high-demand periods (such as holiday seasons or major product launches) without facing performance bottlenecks.
Whirlpool shifted its commerce infrastructure to the cloud, allowing the company to scale up its e-commerce operations globally. This migration has provided Whirlpool with the flexibility to introduce new features and handle higher traffic volumes during promotional events.
- API-first approach for future-proofing:
By using a microservices architecture, FMCD companies can quickly integrate new technologies, such as IoT devices, AI-powered customer service, or voice commerce, without needing to rebuild their entire digital infrastructure. This modular approach allows businesses to stay agile and respond to new market opportunities.
5. Fostering Seamless Collaboration Between Teams
One often overlooked benefit of DXP migration and commerce services is how these platforms enhance collaboration across marketing, sales, product, and IT teams. Having a unified source of truth allows departments to work in sync, reducing silos and ensuring that everyone has access to real-time data and content.
- Cross-functional collaboration:
With a single, integrated platform, marketing teams can quickly update product descriptions, while sales teams can monitor customer interactions and product performance across multiple channels. This leads to more cohesive campaigns and a unified customer experience.
- Data transparency:
Having access to shared data allows all teams to make informed decisions. For example, IT teams can address website performance issues based on real-time analytics, while marketing teams can adjust their strategies based on customer engagement data.
6. Adopting Emerging Technologies to Drive Innovation
As FMCD brands continue to evolve, embracing emerging technologies is critical for long-term success. Both DXP platforms and commerce services support the integration of new technologies that enhance the customer experience and drive operational efficiency.
- AI and machine learning for better experiences:
AI can predict customer behavior, optimize product pricing, and deliver real-time recommendations. For FMCD brands, this can be particularly beneficial in reducing churn rates and increasing customer lifetime value.
- IoT for smart product integration:
With more consumers investing in smart home devices, FMCD businesses can leverage IoT technologies to offer connected products that provide additional value post-purchase. Commerce services integrated with IoT enable brands to offer personalized maintenance tips or product updates based on real-time usage data.
Partner with Krish to Lead Your Digital Transformation
In today’s rapidly evolving FMCD industry, leveraging commerce services and DXP migration is crucial for staying competitive. Whether through headless commerce, cloud-based scalability, or AI-driven personalization, these technologies enable FMCD brands to optimize their operations, improve customer experiences, and drive sustainable growth.
At Krish, we specialize in helping businesses integrate modern commerce solutions and migrate to advanced DXP platforms. Our expertise in commerce services like headless commerce, omnichannel strategies, and DXP integration ensures that FMCD brands can harness the full potential of digital transformation and stay ahead of the curve.
Partner with Krish to unlock the true potential of your digital strategy, streamline your digital commerce operations, and deliver exceptional experiences to your customers across all channels because it is all about being an experience-first brand!
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As Director - Marketing, Zenul leads the marketing and branding at Krish. He brings with him an in-depth understanding of the evolving digital ecosystem and has a proven expertise and experience in strategic planning, market and competition analysis, creating and implementing client-centered, lead-gen and brand marketing campaigns. He has a heart for technology innovation and has been a keynote speaker on various platforms.
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The Importance of Multi-Language and Multi-Currency Stores in the FMCD Sector to Expand Your Reach
18 November, 2024 In today's hyper-connected world, consumers are no longer limited by geography. Whether you're selling electronics, home appliances, or any other fast-moving consumer durables (FMCD), your business can now reach customers across continents. However, with global expansion comes the need to adapt to diverse languages, currencies, and cultural preferences. The growing demand for personalized shopping experiences, seamless cross-border transactions, and increased competition makes having multi-language and multi-currency stores not just a trend but a necessity.
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