What’s phygital? And why does it benefit your business?
In this article
On the one hand, the pandemic has encouraged more digital shopping habits. On the other, it has led to a re-evaluation of the physical experience. The combination of these two opposite trends gave impetus to the phygital phenomenon. Let’s find out what it is, how it works, and why it can be beneficial.
How many times have we gone to a store to see, touch, and try out a product to then leave empty-handed and order it online? And how many other times, before buying in a physical store, have we browsed the web, consulting the brand’s e-commerce, and reading dozens of reviews in order to make a decision?
Just think about how often we’ve been in both situations. This will help you grasp why the phygital phenomenon is becoming the new frontier of customer experience and one of the main trends in digital 2021 strategies.
As the term suggests, phygital is about bridging the online and offline worlds. It’s a new way of experiencing shopping across the boundaries of the two environments, blurring them into a hybrid model. Thus, the best of the physical and digital worlds unite to offer a complete and satisfying customer experience.
How does it work?
The three “i’s” that make up the phygital experience
The phygital phenomenon is based on three essential elements, the so-called three “i’s”:
A customer experience, to be truly phygital, must combine all these components, joining the immediacy and immersion of the digital world with the interactive exposure of physical reality. This requires the following:
- provide physical spaces with technology that facilitates immediacy and immersion, and
- provide online spaces with tools that favor the interaction between the consumer and the product or the company.
In practice, the phygital phenomenon is based on the adoption of a multi-channel approach as well as the use of Marketing Automation strategies and digital technologies like artificial intelligence, chatbots, and augmented reality.
Phygital solutions for SMEs
Indeed, small and medium-sized businesses may often have a hard time implementing digital technologies like augmented reality or artificial intelligence because of limited budgets and skills. What should they do?
Here, find some alternative solutions for SMEs. Approach the phygital phenomenon without large investments or special skills:
- Social media Instagram and Facebook can be excellent tools for offering discounts and coupons to the users who perform a certain action (e.g. content sharing), to be claimed in the physical shop. Social profiles can also work the other way around, inviting interested in-store customers to subscribe to our social channel or tag our company on their page and get a special offer in return.
- Pop-up and temporary stores A company that operates exclusively online might open a pop-up store at a strategic point (based on the analysis of its customer base geolocation data). This is a simple yet effective phygital strategy that’s becoming more and more frequent in the last years, especially during the holiday season and occasions like Black Friday.
- E-commerce plus Email and SMS Marketing for a multi-channel approach This post has already shown that creating an e-commerce and enhancing it through a multichannel approach is now easy for SMEs too. Tools like Shopify and WooCommerce can integrate Email and SMS Marketing platforms like MailUp so that everyone can create an interconnected e-commerce. All it takes is learning how to develop the right sales strategy.
Satisfy user expectations and wishes
To date, 63% of purchases start online, but 49% of consumers still prefer to shop in-store. This shows how physical interaction is still a key element for consumers.
Data confirm a preference trend toward the phygital purchase approach, especially when it comes to new generations: IDC conducted a survey on over 7.00 European consumers, revealing that 82% of millennials no longer see a real border between physical and digital, and expect increasingly unified and personalized experiences. Further, 21% make a purchase on a mobile in-store, while 36% search their device before buying in a physical store.
These figures confirm that the habits and expectations of today’s customers are increasingly directed toward a hybrid and fluid shopping experience, where the advantages of both the physical and digital environment merge. Therefore, a phygital approach satisfies this need. It increases customer consideration, degree of appreciation, and loyalty toward the companies that favor this type of experience.
A complete overview of customer habits is the base for hyper-personalizing the customer journey
The phygital approach better combines data of in-store and online users. The result is an even more complete and detailed customer profile. In other words, phygital means a 360 degree overview of the preferences and purchasing habits of each customer, both online and offline.
The resulting quantity of specific data facilitates the design of increasingly targeted and hyper-personalized customer journeys. The latter—we’ll never grow tired of repeating it—are key to a successful sales strategy.
Phygital and the customer experience: some examples
The Amazon Go checkout-less supermarket
The Amazon Go supermarket has more than 20 stores in the United States. Customers can enter by scanning a code with their smartphone and purchase products without going through the traditional checkout counters. An electronic invoice is subsequently sent to the user, and the total price of the shopping is charged to his or her registered bank account. This allows for a totally contactless and automatic payment, as well as a fast and comfortable shopping experience.
The Timberland brand has introduced TouchWalls in some shops. These digital displays offer customers the opportunity to consult the entire online product catalog live and create a collection of favorite items. The brand stores and uses the customers’ browsing data and favs to create customized marketing campaigns and enhance its sales strategy.
The Nike SNKRS store in Atlanta
In February 2019, Nike inaugurated a pop-up store in Atlanta dedicated to users registered to its Nike SNKRS application.
Nike used the geolocation data from its user database to notify all subscribers who were within a 25-mile radius of Atlanta about the store’s opening. As an incentive, they launched a limited-edition product only available in the new physical store. Also, the store was provided with a vending machine for free accessories, which can be activated via a QR code generated by the application. In this way, the customers used their mobile devices in the store to activate the code and take home the free gadgets.
Digital technologies are increasingly offering interactive and stimulating customer experiences, but consumers don’t seem willing to abandon the advantages of the offline world. The phygital phenomenon is the optimal solution to meet these conflicting needs of the public and to build an even more personalized user journey.