Phygital marketing: the interaction between online and offline

By January 24, 2023 Digital Stories

La Covid-19 pandemic marked a boundary point between the world as we knew it before, made up of hugs and in-person activities, and the current one, where video messages, remote meetings and so on prevail.

As the containment measures yielded concrete results, however, it became evident how difficult it was to return to old habits. Under the impetus of new technologies, other hybrid modes of interaction have developed in a variety of contexts.

Just think of distance learning, smart working or telemedicine health care. Here, then, is the emergence of a third communicative dimension which lies somewhere between the physical and the digital, the phygital.

The word stands for the fusion of the physical and digital worlds and is mainly used in marketing to refer to businesses that wish to Enriching the physical experience through digital features.

With an increasingly interconnected online and offline world, marketers must work hard to define a customer experience Capable of adequately transitioning from one dimension to another.

Let's learn more about phygital marketing, what its features are and what benefits it provides to companies.

What does phygital marketing mean?

The term phygital comes from the union of the words "physical" and "digital" and stands for combining the best components of the offline experience with those of the online experience, so as to offer an innovative kind of experience in which digital and physical realities coexist and feed off each other.

The concept of phygital therefore goes to Filling the gap between the physical and digital worlds extracting the main characteristics from each, such as may be immediacy on the one hand and human relationship on the other.

In this new dimension of interaction where physical actions are matched in the virtual environment and vice versa, the primary objective is the definition of Fluent and engaging customer experiences.

The expression phygital was first used in 2007 by Chris Weil, CEO of the Australian marketing agency Momentum Worldwild.

In 2014, the idea was taken up by the home accessories chain Lowe's which in a California store introduced two robots acting as sales clerks to bring benefits to customers and employees and ensure a better customer experience.

After the 2020 pandemic and the explosion of digital technologies in relation to remote activities, the phygital approach has been introduced in a great many areas, starting with marketing, to denote all actions that move between online and offline.

In fact, any place of consumption such as fairs, restaurants, hotels, and stores can be phygital if technologies capable of making substantial changes in the customer experience are implemented within it.

The 3 foundational elements of phygital marketing

The phygital experience is primarily based on three essential components, known in the industry as the "three i's of phygital." These basic elements are: immediacy, immersion and interaction.

Immediacy is about being able to get everything right away, that is, at the click of a button. It is what, for example, can be had with the addition of interactive totems in stores that allow customers to easily search for the products they need.

By the word immersion, however, we mean the fact that the use of digital devices creates a state of concentration and immersion in the specific activity.

An example might be Nike's SoHo store in New York, where customers can test the performance of the footwear in a running trial zone, that is, a treadmill positioned in front of screens showing scenes of a run in Central Park.

Finally, there is interaction, something that online channels lack. Here we refer to the ability to learn about one's surroundings through the 5 senses and to communicate in person with sales staff and other customers.

For the phygital strategy to be effective, the customer experience must always be based on these 3 components, which are best integrated with the help of digital technologies.

The benefits of phygital marketing

The market has been profoundly affected by the digitization process that has involved every aspect of social life, with a hyperconnectedness made possible by mobile devices and smart technology.

Today's customers rely on the use of a variety of channels to communicate with companies and are constantly moving between online and offline platforms to compare offers, search for information and complete the buying process.

All this has produced paths of customer journey such as webrooming and showrooming, pushing businesses toward omnichannel perspectives to ensure consistency of customer experience.

Different technologies offer consumers stimulating and interactive experiences, but there is often no willingness to abandon the authenticity of offline experiences altogether.

So, businesses related to the real economy are equipping themselves with digital tools, while companies that were originally online-only are opening modern physical stores to provide customers with the benefits of online and offline settings.

Therefore, phygital marketing is the ideal choice for Transforming stores into redefined spaces and support sales with a new customer experience. By doing so, you will be able to meet customers who want personalized experiences and generate the so-called "wow effect" that will make every purchase truly memorable.

The main benefit derived from phygital marketing is that. businesses will be able to take advantage of the large amount of data collected across different channels to analyze customer preferences, buying habits and behaviors in detail.

Such stored data will also be used to compose a vast database to optimize marketing strategies toward an omnichannel vision.

The same logistical processes will be profoundly affected by the use of phygital marketing. In fact, it is possible to use technologies capable of indicating the lack of a product in the store and sending a notification to the warehouse for replenishment.

Similarly, the phygital approach is useful for lightening and easing staff work and streamlining work steps.

Examples of phygital marketing

Currently, there are many technologies available to marketing departments to build unforgettable and satisfying phygital experiences.

To bring physical stores toward the immediacy and immersion of online, brands are equipping stores with self-service kiosks, smart fitting rooms, QR codes, IoT beacons, and more.

On the other hand, to make web acquisitions closer to the personal interaction that takes place in stores, there is increasing use of the augmented reality to strengthen the relationship between the brand and the consumer through more engaging customer experiences.

Regarding phygital marketing, there are many examples of how such a strategy proves successful many times.

To begin with, you may recall Amazon Go, Amazon's physical store where customers scan the QR Code, grab the products they need from the shelves and leave without going through the checkout.

The mechanism involves tracking items in the physical store, while the Amazon Go app charges the amount to the bank account or card linked to the account.

Another similar example is the app Ikea Place which involves using augmented reality to view an object inside the rooms of one's home.

Also very interesting is the case of the KLM Airways which launched the "Live High Five" campaign to pique the interest of passersby. Specifically, two interactive totems were placed in front of the Flatiron Building in New York and the Rijksmuseum in Amsterdam.

The totems were equipped with touch screens and cameras that allowed passersby in the two cities to communicate. The company's goal was to entice people to high-five each other via the screen and win an Amsterdam-New York airline ticket.

KLM offered as follows. a complete phygital experience, giving users immediacy, immersion and interaction by means of a gamification strategy.

Finally, we can mention the following Rebecca Minkoff's campaign which in its New York store has created a real phygital store. Inside are magic mirrors, touchscreen mirrors that allow people to browse the brand's products and choose their favorite one.

Using the same screen, booths are selected to try on clothing or order drinks. Each customer is given the number of the free dressing room and already finds clothes to try on there.

Inside the booths different lighting conditions can be set, and once the customer chooses what they want to buy, they can Receive the bill on your smartphone to pay.

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