January 07, 2026
Retail Getting Phygital in 2026 With Stronger Customer Connections
Phygital is yet another buzzword that’s coming around for a fresh lease of life thanks to the rise of AI and mixed reality across retail and consumer technology.
Verizon’s Global Head of Retail, James Hughes is first out of the 2026 gate with his assertion that phygital brand ambassadors will redefine retail. They can do so by combining AI, adaptive intelligence, and immersive storytelling to create data-rich, personalised experiences.
Seamlessly integrating with staff engagement, he reckons they’ll deliver hyper-personalised engagement and transform stores into unforgettable destinations. Retail could certainly do with a boost after a poor festive sales season.
And, Hughes is far from alone with plenty of discussion around phygital in many forms across the markets.
On show at that bastion of cutting-edge technology, CES, a new LEGO smart brick highlights the brand’s first step into phygital play, while brands like LG are showcasing “Affectionate Intelligence in Action” — a philosophy that places people at the centre of technology.
Hughes reckons the long-promised concept of retail-tainment is shifting from experimental pilots to scalable, real-world deployments. At the forefront of this transformation is the phygital brand ambassador: a fusion of AI, adaptive intelligence, and real-time connectivity that redefines how brands engage with customers.
The Ambassador as an Adaptive, Intelligent Environment
Hughes explains, The phygital brand ambassador represents a new class of retail engagement – a knowledgeable and highly skilled environment that adapts to individual customer preferences in real time.
Powered by immersive technologies and ultra high-fidelity, AI-generated content, it elevates storytelling and personalisation, creating seamless, emotionally resonant experiences that bridge the physical and digital worlds.
Immersive digital storytelling: In a high-end boutique, a virtual ambassador, voiced and animated by a brand ambassador, transforms browsing into a rich, personal narrative. From brand heritage to product craftsmanship, this AI-powered storytelling creates emotional connections that elevate the customer experience.
Blurring commerce and entertainment: In a global sportswear store, an AR version of a world-renowned athlete doesn’t just recite product specs – they demonstrate training drills in the aisle, offer virtual selfies, and turn shopping into a dynamic, shareable moment.
The Human-to-AI Handoff: A Unified, Intelligent Sales Engine
The true power of this technology lies in its seamless integration with human staff. A virtual ambassador can engage a shopper, then locate the nearest associate and say, “Excuse me, could you please assist [Customer Name] with a size seven in the new cleats?”
This kind of knowledgeable, highly skilled interaction, enhanced by immersive technologies and ultra high-fidelity, AI-generated content, delivers a fluid, personalised experience that blends digital efficiency with human warmth – taking customer service to the next level.
This is the future of the augmented retail workforce – a hyper-personalised, AI-driven engagement that transitions smoothly to human interaction. It frees associates to focus on high-value moments, while ensuring operational efficiency and customer satisfaction.
This fluid handoff is powered by ultra-low latency 5G and edge computing, enabling real-time responsiveness at scale.
According to Hughes By 2026, the phygital brand ambassador will be a defining competitive advantage. Retailers who embrace this technology will transform their stores into data-rich, personalised, experience-led environments – proving that the future of retail isn’t just transactional, it’s unforgettable.
Phygital is popping up in many areas, from gaming to in-car systems, so there’s some work for brands to claim the term, and deliver on the promise, but it should be a key trend to watch over the year.
