Phygital 2022 Guide

Crisis & Change

The pandemic made us switch towards a digital-oriented life, mostly taking place online. The reduction of physical contacts is putting the sharing economy on the side, welcoming a new type of lifestyle: the isolation economy. Under lockdown controls, for stores, hospitals, states, land, auto sales, and banks, digital became the primary channel. Many companies have transferred their services in the digital world, completely eliminating their physical presence.
However, in some industries, like banking, this isn't the only option for adapting to new customer expectations. In fact, there's a better answer to the changes—Phygital. Phygital is a combined offline and online company presence where the retail experience takes place both physically and digitally.
With so many changes during the past year, there is a feeling that 2021 has brought us the future we've been waiting for. We have the technologies to make almost everything possible, and the technology will definitely influence the overall commerce.
In this guide, we're showing you how to embrace technology and use Phygital to provide the customer experience of the future.

What is Phygital

Anything seeking to bridge the gap between the real and digital worlds could be characterized as Phygital, but it is most widely used to describe a shopping experience. In fact, some of the customers have a Phygital experience without even knowing it. They search for stuff online and then go to the brick-and-mortar store to see it and buy it in-person.
Therefore, it makes sense for both companies and retailers to exist in this same space between the physical and digital realities and encounter customers there. Both internet and brick-and-mortar commerce have benefits. While brick-and-mortar retail is declining, it still has extremely valuable features that customers still want to experience. For some products, customers still want to touch the products and talk to the staff.
In order to create the perfect seamless experience for the customer and unique possibilities for consumers and advertisers, Phygital seeks to incorporate the best elements of digital and physical commerce. Phygital experiences could be a lifesaver for the declining brick-and-mortar stores, and for physical shops to continue to exist, the integration between the two worlds is inevitable.

How to create a seamless Phygital experience?

The concept of Phygital is guided by the three "Is":

  • Immediacy focuses on making things happen in real-time.
  • Immersion includes the user in the experience.
  • Interaction involves the communication within the physical part of the retail process.

The crucial part is to find which technology could support the interaction between the online and the offline aspects of your service. This technology should have the ability to fill in the missing pieces of the puzzle during the physical interaction.
But, let's take one thing at a time. This four-step process can help you design a better Phygital experience.

Step 1: Get to know your target audience

The new situation made changes in customer behavior more dynamic than ever. What is more, audiences are evolving towards an individualistic approach, increasing the number of personas marketers need to analyze in order to succeed. That's why they have to continually learn about evolving perceptions, needs, and beliefs, trying to find ways to utilize them to improve their offering.
For brands with a mainly digital presence, try to find out the physical factor that your interactions with customers are missing. Stores or organizations with primarily physical contacts, on the other hand, should try and find some digital components they could add to the customer experience.
The best way to find out what it is that you miss in your offering is to start with your customers' pain points. Examine data from disgruntled customers. What went wrong, and how can you solve it using a phygital marketing strategy?
To discover this, you have to do a detailed customer journey mapping and determine how to make your product more discoverable. Technologies like the Internet of Things and Artificial Intelligence can help you. Use data to extract valuable insights and make smarter decisions.

Step 2: Include customers in the process

Engaging with customers with giveaways and campaigns isn't enough anymore. To connect with the brand emotionally, they want to be a crucial part of the innovation process. They want to make a real impact and see how the company uses user-generated content to improve its products. This means that the company really cares about their opinions and experiences. IKEA is one of the masters of co-creation, actively including users in its product development processes.

Step 3: Encourage community-driven innovations

Marketing on social networks has the ability to create relevant communities around a product very quickly. These communities can be used to open new opportunities for influence, share knowledge, cross-sell, and gain loyal customers.
When they stretch into the physical world, online communities grow even more profound. Many companies build online groups that communicate online and then meet in the real world to share experiences, developing real fan clubs around a product. These fans can be beta testers and early adopters for new products and features, helping the company improve customer experience.

Step 4: Notice the connection

In the physical and digital worlds, company owners need to look beyond the obvious and see if the need for a physical product or service interconnects with a need from the digital world and try to build the interaction. Just social media marketing and in-store displays won't do it—Phygital goes way beyond. Instead, they have to think in terms of collaboration, networking, and emotions to better identify opportunities throughout the customer journey.

The future is Phygital

The modern consumer lives Phygital experiences every day without even being aware of it. Millennials and Generation Z are at the forefront of this transformation, inspiring companies to keep innovating.
There are countless ways how to make your Phygital experience desirable and easily discoverable for customers:

  • Pop-up stores
  • Event booths
  • AR & VR tools
  • Wearable tech
  • Physical products paired with apps

...and many, many others. Or, if you're not sure how to create the perfect Phygital experience, contact our team of experienced tech professionals.INk

Human. Technology. Together.

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