Generational differences towards phygital services: insight from the retail banking industry

Purpose Phygital is a promising phenomenon that employs cutting-edge technology to connect digital and physical spaces, providing users with interactive experiences. This research empirically examines the factors influencing customer loyalty between the two generational cohorts (Gen X and Gen Y) towards phygital services in the retail banking industry. Design/methodology/approach The researchers conducted a quantitative study through self-administered questionnaires, which included 493 respondents from Generation (Gen) X and 509 from Gen Y. The “partial least square-structural equation modelling (PLS-SEM)” was used for testing. Findings The standardised path coefficients show that in Gen X and Gen Y, customer trust and system quality significantly influence customer engagement and customer satisfaction; however, security and privacy risk have an insignificant influence on customer engagement and customer satisfaction. Surprisingly, perceived value significantly influences customer engagement and insignificantly influences customer satisfaction in Gen X. Further, perceived value substantially affects customer engagement and satisfaction in Gen Y. Moreover, there is a significant association between customer engagement, satisfaction and loyalty in both generations. Practical implications The present research is unique and offers insightful implications for several stakeholders, including customers, bank managers and practitioners, to understand the potential of phygital settings in transforming the landscape of banking transactions. Originality/value This study is a preliminary investigation concentrating on customer behaviour towards phygital services in the retail banking industry. Furthermore, this study provides valuable contributions to banking literature through a comparative assessment of Gen X and Gen Y by shedding light on the unexplored realm of phygital services from the perspective of a developing nation, i.e. India.