Phygital: What is it? Examples, Benefits & More

Phygital comes from the two words physical and digital. And as the name implies, refers to the merging of digital and physical marketing efforts of any company to boost its customer experience.

Though the name might be relatively new, the concept itself is a natural evolution of modern marketing, as it has become clear that physical marketing still trumps online marketing in many areas. So, combining the two channels is smart.

Any business can engage in Phygital marketing – all you need is to combine your digital and physical channels innovatively. And if the business is only online or physical, then building out the other channel can boost your operations.

This guide explains Phygital marketing in detail and includes examples of what other businesses are doing. It also shows you how to start a Phygital campaign to reap all the benefits.

What is Phygital?

You can call it the art of combining digital services or products with a physical store presence. Two things are important here – an online platform or app, combined with a physical presence for the business.

Phygital marketing can be used for everything from e-commerce to financial services, the entertainment industry, luxury goods, retail, real estate, education, and most other businesses you can think of.

All that is necessary is that you combine the best physical features of your business or offering with its best online features. This puts an end to “either-or” thinking, as a business does not need to choose just one marketing channel, but rather is simultaneously active on all channels.

The Phygital approach is all about giving customers the best possible experience of a company’s services. It aims to make commerce and service delivery easier, more fun, and more rewarding for the customer. While proving many benefits for the business as well.

Aspects of Phygital Marketing

There are 3 major aspects involved in any Phygital marketing campaign. They are immediacy, immersion, and interaction. These 3 concepts define any Phygital experience because they deal with human nature. And here is a closer look:

• Immediacy – Instant gratification is high among customers, especially among Millennials and Generation Z, which are used to instantly ordering stuff online. With Phygital however, the focus might additionally include instant notifications, the ability to make choices along the line, and even near-instant deliveries, such as in the Nike shop. Long gone are the days of placing an order online and waiting for a full week to have it delivered.
  
• Immersion – With immersion, the customer experiences the service or product in multiple channels. For instance, inspecting a 3D model of the product before buying. Or seamlessly engage with customer service through multiple channels like chat, phone, and email. Immersion, like immediacy, comes from the digital world of marketing.
  
• Interaction – This is where the physical part of the Phygital experience begins. Customers still prefer a level of physical interaction, even when they are okay with ordering the item online. This includes the ability to touch and feel a real product before ordering, or to talk with a sales rep in person.

Examples of Phygital Businesses

To better understand Phygital marketing and how it is changing the scope of business around the world, here is a look at some notable business operations implementing Phygital marketing in one capacity or the other.

• Capital One Cafes – You can walk into any of these cafes, buy whatever you want, take your time, and even sit and do some work because it has free WiFi. Then, you can also use the ATM, which is free for Capital One’s customers or talk with an ambassador about the different services of the Capital One online bank.
  
• Disney MagicBands – These RFID-equipped wristbands function as your hotel room key and payment medium for food, park, and other other venues.
  
• Retail bots in store – You walk into a store, and while you are looking around, a robot greets you and asks if it can be of any help.
  
• Restaurant QR Code – Enter your favorite restaurant, scan the QR code for the menu, and place your order. Enjoy your meal and pay through your smartphone.
  
• Gucci Smart Mirrors – You can search through content, rewind, pause, take pictures of yourself in the new clothing, and send them to friends for review. Or reserve the item.
  
• Chanel AR Smart Mirror – Request to try on some selected clothing through the app. And when you arrive for your appointment, all the clothing is laid out. Plus the fitting room’s smart mirror offers many helpful features.
  
• Nike Shop – Nike’s Manhattan store lets you design a custom sneaker by yourself. And if you can wait 90 minutes, then you might walk out of the store with your new custom sneakers.

• C&A Brazil – Here the clothe hangers also display how many social media likes the clothing item has.
  
• Rebecca Minkoff – The fitting room mirrors are interactive smart mirrors that assist you in checking out clothing and even ordering a drink for you.
  

• Amazon Go – Walk into a shop, pick up the items you want to buy, and simply walk out. No lines, no cashier. That’s the Amazon Go Phygital store.
  
• KFC China – This Phygital fast-food store makes it easy to order from a kiosk inside the shop, then you can just go and collect your food. Facial recognition helps to complete payments and the AI can even suggest menus because it knows you.

Enabling Technologies of Phygitalization

Phygital marketing is a high-tech approach to goods and service delivery. And this also means that it relies on technology to function.

• Smartphone – While laptops are great to carry around for work, it is the development and spread of iOS and Android phones that make many aspects of the Phygital experience possible.
  
• QR Codes – These are the square, machine-readable bar codes that you can easily scan with your smartphone’s camera to execute different functions.
  
• Bluetooth Beacons – This is a small hardware device that you install in a stationary location and it emits a constant message. Any related app can then take the required action based on the beacon’s message. It is used for location tracking, inventory management, and so on.
  
• RFID – RFID stands for Radio Frequency Identification. It is similar to Bluetooth Beacons, but it can be installed in a range of everyday items from cards to armbands, products in a shop, and so on. RFID works up to 100 meters.
  
• NFC– NFC stands for Near Field Communication and it works just like RFID. But it is limited to shorter distances of just a few inches, making it ideal for payments and tracking.
  
• Geo-location – Most smartphones have satellite navigation receivers that let apps know exactly where the phone is located. This can be a useful source of data for Phygital campaigns.

Benefits of Phygitalizing your Business

If you are still on the fence about Phygital and the chances of its having a positive impact on your marketing efforts, then here are the top benefits of Phygitalizing your business.

1. Build brand Awareness – By employing a Phygital approach to make your business stand out from the rest, you will increase your brand’s definition, uniqueness, and visibility. This, in turn, will develop into more value and profits for your organization down the line.
   
2. More Personalized Products/Services – Phygital marketing uses a digital approach for product development and delivery. This means that you can offer customers the possibility to easily customize their product the exact way they want it. This connection between the customer’s desire and a near-instantaneous realization can be a powerful tool.
   
3. Improve Customer Experience – By combining the digital worlds of an app or website with the physical environment of a shop or showroom, the customer is more deeply enmeshed in the experience that a company offers. The ability to interact both physically and digitally with your company’s offer leaves a lasting impression that could help to transform him or her into a loyal customer.
   
4. Better Brand Loyalty – Even when a customer is already loyal to your brand, improving your business experience with a Phygital process will help to improve brand loyalty as well.
   
5. Boost brick-and-mortar Sales – So many brick-and-mortar business models are dying, often as a result of digital disruptions. By employing a Phygital marketing approach, even ancient business models can suddenly become hip and trend-setting, leading to more money in the bank too.

How to Phygitalize your Business

If you have decided to take the leap and join other innovative businesses that are Phygitalizing their operations, then the next question is probably “what’s next?”

Here is a step-by-step guide to help you along with transforming your business the right way. Keep in mind that Phygitalization is not simply digitization. It is the merging of digital marketing concepts with proven brick-and-mortar marketing wisdom.

Step 1. Research your Audience 

This business advice may be old, but it is golden. The reality is simple – if you don’t know who you are trying to sell to, then you will make lots of mistakes. But by researching your audience first, you get insights into your potential customer’s desires, way of life, preferred brands, and spending patterns.

Armed with such valuable information about your potential clients or customers, you can now better channel your marketing resources. From budgeting the right amount for a campaign to choosing your slogans, colors, and even pricing. The best marketing efforts start with a clear understanding of your target customer.

Step 2. Develop Your Phygital Strategy

Now that you know who you are looking for, the next step is to develop your Phygital strategy. Keep in mind that it’s best to be original here. So creating something unique and helpful can give your business the boost it needs. On the other hand, copying a little from established brands and making slight changes can also work.

In the end, every business is unique, so it’s best to come up with a unique strategy. Your solution needs to be tailored to your target customer. But unlike purely online businesses, the customer can interact physically with your product. And unlike brick-and-mortar businesses, your potential customer can additionally use a smartphone or tablet to gain more insights.

Step 3. Focus on Experience

In developing your Phygital strategy, you need to keep the customer experience in mind. So, your process should offer emotional satisfaction naturally. Your customer does not need to undergo stress just to do business with you. Appeal to his senses, emotions, curiosity, and need for options beforehand, then blend your solutions into your Phygital approach.

Step 4. Offer Options

Everyone wants to get that feeling of freedom when making a decision. That’s why businesses stock their shelves with slightly different but very similar products. It makes you believe that you have the power to choose, and this makes you feel good.

You should also make your customer feel good by offering options. This can include different purchase and payment methods, social media customer service, interactive kiosks, self-service options, push notifications, or any other feature that will make your potential client happy to associate with your business.

Step 5. Include The Latest Innovations

Old school marketers have always known to capture their potential customer’s attention with spectacles. And till this day, not much has changed with human nature.

So, if you are looking to boost your brand, break into a new market, or grab as much attention as you can for your business, then you will also need a spectacle. Streamlining your business and improving the customer experience is great, but you need that wow factor to help hit your message home.

Integrating the latest technologies into your business will do this trick for you. It could be automation, virtual reality systems, AI processes, having a robot as staff, using wearable devices that connect to the cloud, automatic vending machines, and so on.

Include something in your business that is both functional and attracts attention.

Conclusion

You have seen what Phygital marketing is all about, how it is changing businesses across the globe, and how it can change yours as well.

As the physical and digital worlds continue to merge, there is little doubt that Phygital businesses are here to stay. So, it shouldn’t be a matter of if, but of when you will transform your business.