Phygital design has emerged as a novel approach for luxury retailers to draw customers in-store. Although previous studies have assessed customer and managerial opinions on the potential of phygital design, few empirical studies exist. This study aims to fill this gap by simulating a phygital luxury shopping experience through virtual 3D renderings. A between-subjects experiment with 280 participants recruited via Amazon Mechanical Turk investigated the perceived usefulness and playfulness of traditional vs. phygital stores and their effects on luxury purchase intention. Participants were randomly assigned to a traditional or phygital store condition, followed by surveys assessing the store environments. Results revealed that phygital store environments were associated with significantly greater perceived usefulness, playfulness, and luxury purchase intention. Playfulness fully mediated the relationship between store type and luxury purchase intention. This research provides insights into consumers' perceptions of phygital luxury retail environments and suggests managerial implications and directions for future research.