Background: The modern retail landscape is undergoing a structural transformation, one defined not merely by the adoption of new technologies but by the fundamental reconstitution of the service encounter itself. Across sectors ranging from consumer electronics to luxury fashion, retailers are deploying interactive kiosks, augmented reality displays, AI-driven recommendation engines, and sensor-embedded product zones in a deliberate effort to dissolve the boundary between the physical store and the digital platform.
Aims: This study investigates the experiential and neurophysiological dynamics of technology-based service failures in physical retail environments to develop a theoretical model for effective human-led service recovery. As retailers increasingly automate the customer journey, technology failures represent a critical threat to customer experience, creating a paradoxical need for skilled, human intervention.
Methodology: This research employs a neurophenomenological approach, integrating first-person data from Interpretative Phenomenological Analysis (IPA) with third-person, objective data from electroencephalography (EEG). A video-cued recall protocol was designed to capture rich, in-the-moment experiential accounts from eight participants in a flagship phygital electronics store, while ensuring high-fidelity, artifact-free neural data. Data saturation was confirmed after the eighth participant, justifying the sample size within IPA norms.
Findings: The analysis revealed that technology failures induce a distinct "neural signature of frustration", characterized by negative emotional valence (low Frontal Alpha Asymmetry), high cognitive load, and profound disengagement. Conversely, effective human intervention acts as a regulatory mechanism, resolving technical issues and transforming this negative state into a more positive and engaged emotional state. This "Human Anchor" role, dependent on employee competence and situational awareness, is particularly critical in low-trust market contexts where the physical store functions as a validation point for the online brand.
Conclusion: Theoretically, this study extends service recovery theory into the phygital domain by proposing a model of human intervention as a cognitive-emotional regulation mechanism. Methodologically, it validates a neurophenomenological protocol for consumer research, bridging the gap between subjective lived experience and objective neurophysiology.