Phygital Experiences: The Future of Marketing?

Visualize the sensory and interpersonal connections of commerce with an extremely customized digital layer bringing them together. This is a potent combination.

Phygital is a new term that describes a trend to increase or vice versa a physical brand experience with a digital element. Make no mistake: phygital is here to stay, despite its fad-sounding name.

72% of internet users purchase online, according to statistics from the annual IAB Spain e-Commerce study 2020 in 2020. The trick, though, is to blend physical and internet sales: 52% of respondents buy through both channels, and 78% expect to do so in the future, while only 13% will exclusively buy through brick-and-mortar stores.

Phygital not only benefits the consumer’s experience but also allows companies to connect their physical and digital marketing activities smoothly and to obtain new chances for selling their products.

The rise of phygital experiences

Phygital unites both online and physical worlds to produce a far more comprehensive and fulfilling client experiment, taking into account the most remarkable elements of each area. This phenomenon differs in its multi-channel focus from other marketing strategies when the consumer’s procurement process is smooth and familiar.

For a time now, the digital world has gradually entered our physical lives. Consider the influence of cellphones and how we demand a customized, digital dimension to complement our real daily lives, such as Google Maps.

Phygital has a clear case: while we are more dependent on digital technology, we want physical experiences at the same time.

But why is it the best fit?

Phygital combines the finest elements of a digital retail experience, such as responsiveness, engagement, and agility, with the opportunity to engage with people, the product and provides a more brick-and-mortar retail experience. This strategy is the most effective way to serve a demanding, hyper-connected consumer’s requirements across many platforms. Millennials and Generation Z are the groups who best match the description for ideal consumers of phygital experiences, requiring to create 360° Marketing strategies that span both brick-and-mortar and online retail concepts that work in a phygital environment.

With more than 20 US sites, the Amazon Go grocery shop is a famous example of this online and physical coupling. A consumer scans his smartphone with a password, chooses up the items they want and exits the shop without the conventional checkout queue. Rather, the blend of technology solutions implies that you get the amount Amazon pays for your account on an electronic receipt.

Let us show you the growth and demand in numbers

Through phygital integration, you may expect more income, more individualization, better retention of customers, better customer alignment and product alignment, a growing client base, efficiency and enhanced customer focus. Because customers prefer to spend as little time as possible in your business (or avoid it altogether), you will need to provide a comparable online experience that may or may not lead to a physical one.

Google says that over 63% of customers start their online shopping trips. 49% still recommend visiting offline shops. Similarly, Gartner observed that 82% of luxury products are researched online and purchased in-store in China.

The advantages listed above are only the beginning! A Forrester study suggests that the seamless experience of phygital customers may result:

  • Lead in conversions by 17%
  • More significant revenue by 16%
  • 20% increment in customer satisfaction
  • Longer customer runtime by 15%
  • 18% rise in awareness
  • 59% increase in the cross-sell and upsell ratio
  • EBITDA’s hike by 16%

These patterns were visible in a large portion of Forrester’s study sample (>50% on average).

Some relevant examples

Nike- Members of NikePlus can enter the shop for exclusive products and articles of Nike. Its connection with Swoosh text enhanced the phygital experience by allowing customers to shop ahead of time and pick up their orders at the counter.

Pokemon Go- Gaming experiences and phygital go together! Considering that gaming is directly associated with the user experience, what better method to demonstrate the influence of physical technology than via games? Pokemon Go is a great example of how artificial intelligence has been used to link companies to customers.

Amazon Go- The offline store sold a wide variety of items, from groceries to ready-to-eat meals. But there are no shop assistants in these outlets! Shoppers may visit the shop, pick up the things they want and leave the shop. It’s so straightforward!

Final thoughts

One thing is quite apparent — the presence of phygital customers remains here. It acknowledges the importance of online and physical customer relationships and blends their finest for a memorable and comprehensive experience, which appeals to nearly everyone, whatever their preferences.
Use a phygital approach to link the online and offline knowledge of your consumers to ensure they can move easily between both. The creation of more human contacts will increase their feelings about the brand and sales.

If your business is trying to develop a digital presence for your brand, or if you wonder what measures you can take to increase digital transformation and digital marketing for your company, dentsu World Services can assist. Our team has the expertise, the tools and the know-how to support you with phygital control.

Author: Amit Pandey, Director of Technology and Head of Commerce Practice, dentsu World Services.

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