Unlocking Gen Z engagement in phygital retailing: Evidence from a multi-mediated customer experience model

Abstract

This study investigates how phygital experience influences Gen Z customer loyalty in Sri Lanka's consumer electronics retail sector, addressing the limited evidence from emerging markets on hybrid retail approaches. The research emphasizes the growing relevance of integrating physical and digital touchpoints to create immersive consumer journeys and explores how such experiences foster loyalty among younger consumers. A quantitative research design was adopted using a structured 5-point Likert scale survey questionnaire was completed by 480 Gen Z customers of consumer electronics retailers in Sri Lanka. Data were analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine direct and indirect relationships between phygital experiences and loyalty. The study also evaluated a serial mediation mechanism to explain how immersive, technology-enabled environments and seamless physical-digital integration contributes to loyalty formation. Results demonstrate that phygital experiences significantly and positively influence customer loyalty. Gen Z consumers place high value on interactive, technology-driven retail environments that enhance satisfaction and strengthen their commitment to brands. The findings highlight the importance of co-creation, engagement, and perceived value in shaping loyalty, while underscoring the role of digital literacy in navigating hybrid retail contexts. The study provides actionable insights for retailers seeking to design effective phygital strategies that resonate with Gen Z consumers. It offers guidance for innovation and market expansion in emerging economies. However, the reliance on self-reported, cross-sectional data from a single sector and demographic limits generalizability. Future research should extend across industries, age cohorts, and cultural contexts, incorporating variables such as trust, emotions, and digital fatigue. This research contributes to the growing body of knowledge on phygital experiences by contextualizing the phenomenon in an emerging market setting. It advances theoretical understanding by empirically validating a mechanism linking phygital experience to loyalty and provides practical recommendations for retailers aiming to enhance customer journeys through hybrid strategies.