Digital Transformation in the Fast Fashion Industry: How do Consumers Perceive Phygital Retail?

Abstract: The fashion industry has witnessed significant digital transformation, leading to the emergence of phygital retail that seamlessly integrates physical and digital experiences. This study explores the impact of phygital store design on customer-based brand equity in the fast fashion sector, focusing on the drivers and barriers that shape customer perceptions of phygital retail. By employing Cifci et al. (2016) customer-based brand equity model, the study evaluates the model's applicability in the context of phygital retail. An abductive research approach combines deductive hypothesis testing with the inductive exploration of novel topics. The research findings reveal that the application of phygital retail positively influences brand satisfaction and brand loyalty, improving customer-based brand equity. Specific dimensions of brand equity, such as brand awareness, service quality, and lifestyle-congruence, are significantly influenced by phygital retail. Factors driving positive perceptions include convenience, personalized experiences, and a seamless blend of physical and digital interactions. However, a lack of experience with technology, desire for human interaction, bad implementation, and concerns about sustainability can hinder positive perceptions. This research contributes to understanding the impact of phygital retail on brand equity in the fast fashion industry. It provides valuable insights for fashion brands to enhance their value proposition to customers.