Top 5 Insights for the Phygital Operating Model in the Fashion Industry

In the fashion industry, a company’s operating model is of great significance. It encompasses the structure and processes for generating revenue and reducing costs. To increase revenue, cut costs, and delight consumers, fashion companies must innovate their operating models.

In recent years, especially after the pandemic, consumers’ behavior has undergone tremendous changes. In the past, people mainly purchased fashion items from physical stores or e – commerce platforms. Although these two purchasing methods still exist today, the approach to buying and selling has significantly shifted. As life gradually returns to normal and the COVID – 19 pandemic fades rapidly from people’s memories, consumers are once again enthusiastic about the in – person shopping experience. Therefore, it is crucial for the fashion industry to develop smart and practical marketing plans to meet consumers’ evolving needs.

To understand this phenomenon deeply, one needs to consider the question, “Do consumers interact with fashion brands physically or virtually?” The answer is both. This has given rise to phygital marketing, prompting fashion companies to integrate physical and digital elements into their operating models. Whether before or after the pandemic, phygital has profoundly influenced the sales and purchasing behavior of fashion products. If fashion companies want to improve their sales performance, the following five key insights about the phygital experience provided by Fashiondevops will help companies focus on consumers’ psychology, emotions, etc., to construct the best possible user experience.

1. What is the Phygital Experience in the Fashion Industry?

The phygital experience in the fashion industry combines physical and digital experiences to create a new interaction model for consumers. Many fashion companies have quickly adjusted their strategies to meet the current needs of consumers. For example, consumers can place orders for fashion clothing through their mobile phones and then pick them up at physical stores. Before purchasing cosmetics, they can use augmented reality (AR) technology for virtual try – ons. And they may communicate with virtual assistants before getting in touch with real – life customer service.

To remain competitive in the market and increase sales, almost all fashion companies have adopted a digital operating model. Common examples include using mobile phones to view the new product catalog of a fashion brand in – store and completing payments without touching the payment terminal. Although the pandemic has driven the integration of physical and digital elements in the customer experience in the fashion industry, this model will persist for a long time in the future.

2. Why Has the Phygital Model Become the New Normal in the Fashion Industry?

In the increasingly digital present, people may wonder why the fashion industry still needs the phygital experience. Nowadays, people are busy with their lives, and many work from home. Achieving an end – to – end digital customer experience is particularly important.

The rise of e – commerce platforms has impacted the business of physical fashion stores, and the outbreak of the pandemic has exacerbated this trend. However, in 2022, the omnichannel shopping model has become a new trend in the fashion industry. Consumers tend to combine online and offline channels for browsing and purchasing fashion items.

Many consumers still prefer physical fashion stores because they can touch and feel the products. Moreover, when consumers spend more time in shopping malls, they are more likely to make more purchases because there are no distractions in physical stores. For example, when browsing fashion products online, one may be interrupted by a phone call or others. But in a physical store, consumers’ senses are integrated with the surrounding environment, and they can see all the products at once in a comprehensive manner. In addition, after the lockdown, people have an even stronger desire for the shopping experience in physical stores. Even though many people work from home, they still go out shopping occasionally.

People are willing to spend more time with their relatives and friends in fashionable restaurants and shopping malls. This is because they save commuting time and costs. In general, consumers enjoy shopping in physical fashion stores but dislike long queues. They hope to communicate with salespeople and also look forward to digital browsing. For example, after arriving at a restaurant, consumers can place orders, make payments directly through their mobile phones without waiting for the waiter or queuing, and then find a seat and wait for the food. This seamless experience encourages more people to go out for consumption. Therefore, marketers are providing digital customer experiences in physical spaces.

3. Five Insights for Achieving the Phygital Experience Operating Model in the Fashion Industry

The marketing revolution requires fashion companies to upgrade their marketing methods. According to Fashiondevops, the strategies for the phygital operating model in the fashion industry need to focus on the following five main factors:

1. Omnichannel Phygital Experience Becomes the New Norm: The omnichannel experience is becoming increasingly popular in the fashion industry. Therefore, companies should not be limited to the division of channels. The image and popularity of a fashion brand stem from a comprehensive understanding of the company’s values and potential customers. To achieve maximum success, the phygital operating model in the fashion industry must focus on an integrated approach and cross – channel collaboration. The phygital experience integrates all physical and digital elements, and focusing on a dynamic system is the core of smart marketing in the fashion industry.
2. Consumer Psychology is the Key to Optimizing the Phygital Marketing Model: Any fashion company has its ideal customer groups. Whether a company targets business customers (B2B) or individual consumers (B2C), it is essential to pay attention to consumer psychology. This is the core of the phygital ecosystem in the fashion industry. Marketing experts study consumers’ purchasing behavior, such as active customer groups, browsing time, popular products, etc. Consumers’ choices of various fashion items, advertisements, etc., can well reflect their preferences. Fashion companies can use these customer habits to build a phygital model and formulate marketing strategies based on it. Therefore, quickly and deeply understanding consumer psychology is expected to double or even triple the revenue of fashion companies.
3. Revamping the Revenue Model to Improve Operational Performance: The revenue of a fashion company mainly depends on the quality of its products or services and the customer experience. To achieve the desired goals, companies need to innovate their revenue operating models to realize the phygital marketing approach. Focusing on internal training to provide a comprehensive and dynamic user experience marks the transformation of fashion companies from the old model to the new one. For example, fashion brands need to train their in – store employees to understand and operate the phygital system. This requires not only investment in technology but also effective performance management. The two must work together to promote sales growth instead of competing with each other.
4. The Phygital Model Requires a Growth Mindset and Allows for Trial and Error: Technology is developing and changing at an extremely fast pace. However, it takes time for humans to adapt to these changes. A complete transformation overnight is unrealistic because people need time to learn and grow. Unlike machines, humans are more likely to make mistakes. This leads to an important aspect of the phygital world in the fashion industry: a growth mindset can stimulate creativity and promote development. For example, a change in the policies or vision of a fashion company will have a profound impact on the entire enterprise. In such cases, strong leadership with the ability to make trade – offs between different channels and methods is crucial.
5. The Phygital Marketing Model is Still Evolving: Phygital is still in the development stage in the fashion industry because many companies are still in the transition period. Currently, only some fashion companies can directly face the new concept of integrating the physical and digital. The latest fashion trends are at the critical point of phygital integration, which requires a large amount of capital and advanced technology. However, a fashion brand cannot completely achieve phygital overnight. Gradual changes and regular adjustments are crucial for achieving balance and development. In addition, the definition of the phygital experience in the fashion industry is also constantly changing.

4. Conclusion

Formulating a phygital strategy for the fashion industry requires considering the above five key factors to achieve a comprehensive and unified business model. The primary task is to evaluate the current customer experience of fashion companies. Paying attention to the challenges (pain points) faced by customers is the key to creating an optimized phygital experience. As the owner or operator of a fashion company, the goal is to create various immersive experiences that are easy for consumers to use.

This will achieve a “silent utility”, that is, there will be almost no consumer complaints because the experience is easy to understand and use. Fashiondevops is committed to achieving stable and rapid growth because we keep up with the latest trends in the fashion industry. Attracting consumers to interact with the fashion brand with minimal investment while bringing maximum benefits to consumers will make them repeat customers.