Mind the Store

Retail Reality

Toys Lead Phygital Experience in Retail Stores

By
Barbara Thau
Tue, 08/22/2017 - 14:00

Amid a dour drumbeat of retail closures, bankruptcies and liquidations, retailers are investing in hybrid physical-digital experiences designed to engage shoppers, increase foot traffic and boost sales. One of the most popular ways to deliver these experiences? Toys.

Often the second fastest-growing merchandise category in retail, according to SVP Juli Lennett at research firm NPD, the toy category lends itself well to new forms of interactive play and experiential retailing. Today, improving the shopping experience requires "phygital" moments: in-store fixtures or activities that merge digital conveniences with physical interactions. A “phygital” dressing room might have mirrors that double as a touch-screen computer, for example. As a product category, toys provide retailers with the opportunity to foster these moments, drawing consumers into stores for experiences that extend into the digital world, but can't be replicated entirely online.

Barnes & Noble and LEGO Blend Physical, Digital Play

Amazon has long threatened booksellers, and while Barnes & Noble's business isn't thriving, the company has been looking for new ways to stay relevant. The company has incorporated other product lines and specialties to draw consumers into stores, including an expansion of toys in recent years. The company is intent on “offering customers interactive and fun hands-on experiences," Kathleen Campisano, Vice President, Specialty at Barnes & Noble, said in a statement.

The LEGO Group is one of Barnes & Noble's biggest partners when it comes to the experiences Campisano mentions. The Group has been undergoing its own set of changes to stay ahead of consumer preferences and expectations—in July, they launched LEGO BOOST, a tablet app that combines computer coding and LEGO building.

For Barnes & Noble, LEGO BOOST presented a prime opportunity to incentivize consumers to explore the "phygital" experience of the app in their stores. Called the “LEGO BOOST Creative Toolbox Building Event," LEGO devotees were invited to visit Barnes & Noble stores to build Vernie the Robot using the app and physical legos. At many locations, local robotics and coding experts were on hand to help shoppers. The unique combination of community, interactivity and on-hand expertise drew consumers to the brick-and-mortar stores to interact with the product and eventually (for some) make a purchase.

Walmart's Toy Department Blends Physical, Digital Aisle

Beyond offering products that are "phygital," like LEGO BOOST, retailers like Walmart are exploring how to combine the ease of shopping online with a brick-and-mortar shopping experience. As millennials—now the nation's biggest buying group—become parents, companies are finding that it's particularly important for toy shopping to have a physical and digital component.

“[Millennials are] very much into experiences and retailers that bring services and engagement into stores to compete with online shopping," NDP's Lennett says.

Walmart is testing in-store kiosks that enable shoppers to view its toy store inventory and order unavailable items from a touch screen monitor—dubbed an “endless aisle for toys." The kiosks are designed to offer convenience for shoppers, while mitigating a major retail profit drain: Every year, out-of-stocks cost retailers an estimated $100 billion in lost sales.

“Meeting customers' needs is critical as they adopt more digitally-driven lifestyles," the company stated in a blog post.

While Walmart, along with Barnes & Noble, was founded in the pre-digital era, both companies now have digital in their sights, leveraging toys to create one of a growing number of phygital experiences for consumers.