What Is Phygital For Brands?

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Venkatragavan Srinivasan · Fri Nov 18 2022

What Is Phygital For Brands?

Technology is moving at a tremendously fast pace, a new concept that seems cutting-edge today may become entirely obsolete tomorrow, that is how fast things are moving along in the world of technology and it is amazing! 

With tons of avenues to explore, nothing is stopping it. 

Speaking of exploring things, the concept of phygital marketing is starting to make rounds and if you aren’t aware of what “phygital marketing” is, it’s simple 

Physical + Digital Marketing = Phygital Marketing.

But why? The answer is quite straightforward, to close the distance between physical and digital marketing to offer customers a more engaging and interactive experience. This is bound to bring about a ton of changes. 

Today, we’ll discuss the concept of phygital, its introduction into business, how it can benefit you, and how you can implement this concept as well. 

What Is Phygital?

In simple terms, an amalgam of anything physical and digital is referred to as phygital. Here it refers to a marketing strategy!

This concept makes quite a sense as customers are phygital. By this we mean, you can find consumers in the physical world as well as the digital world. This could mean integrating digital features to accommodate customers’ physical experience or vice-versa. 

Of course, physical stores, even though they’re on the road to becoming less relevant, certain aspects cannot be recreated within the digital world. For example, consumers in general, love to try out products like trying out clothes in trial rooms or taking a cycle out for a spin before buying it. Additionally, being able to talk to a salesperson solely dedicated to helping you find the perfect product, just cannot be recreated in the digital world. 

There are a few surveys that state that consumers have already begun, in one sense, merging the physical and digital worlds to make purchases. They look for products online and check out the prices and reviews. After which, they end up in a physical store to finally buy the product they’d been researching about. Aldo, a fashion brand, reportedly had an engagement rate of 308% just after one live stream. 

Phygital marketing has the potential to help several physical stores from going completely obsolete. In today’s world, relying only on physical stores is not enough, there must be some level of digital marketing aspect present to successfully conduct business operations, garner customers, and make sales. 

Phygital Marketing - Impact On Customer Experience

The elevation of customer experience is one of the most important criteria when it comes to sales. It doesn’t matter if it is physical or digital, customer satisfaction does not entirely rely on the product they're buying, several other aspects factor in during the entire process of selecting and buying the product. 

Of course, as a brand, we have the option of using only one channel. But as customers, they have other options that offer multiple channels while integrating new tech to make purchasing products easier. This is a simple yet important point to remember. 

Having to go to a physical store or trying to explain your queries/problems to a chatbox may not entirely be the solution. Hence, if you’re looking to enhance customer experience and satisfaction, then you must offer them multiple options to choose from, be it physical or digital. 

Small things like these help you set yourself apart from other brands on the market.

What Elements Make Up A Phygital Experience

Here are the 5 essential elements of phygital:

  • Omnichannel - phygital cannot be done with just one channel, you need to employ multiple channels to offer options to your customers. 
  • Psychology - if you’re confused phygital marketing utilizes a lot of consumer psychology. 
  • It is a journey - people are not buying anything phygital but are going through a phygital process to get their desired product. 
  • Compromise - this refers to letting go of strategies or tech that may not benefit your business and employing the ones that do. 
  • Combined revenue recognition - this refers to setting budgets on a cross-channel basis. 

Creating A Phygital Experience For Your Customers

If you want to create a great phygital experience for your customers, then here are the three “I’s” that you must bear in mind.

  1. Immediacy 
  2. Immersion 
  3. Interaction

Out of these three, Interaction is relevant to a physical experience, on the other hand, Immediacy and Immersion are relevant to digital experience, and these elements when put together create a successful phygital experience for your customers. 

Phygital Technology today unequivocally altered the very realm of business. For instance, the introduction of VR and AR is an absolute game-changer. VR or Virtual Reality is one of the best phygital examples for creating a great phygital experience. 

Phygital Experience - A Small Breakdown

Let’s break down and understand the three “I’s” and the phygital experience with an example.

Remember, the inclusion of the three “I’s” is necessary for it is a complete phygital experience 

Let’s take a fast food franchise with a drive-thru option, as a customer I would want my wait time to reduce, so I place an order on an application meant for the same, and a lot of these applications are immersive by nature that further prompt us to make more purchases and let’s not forget these apps over time learn your likes and dislikes. After the order has been placed, I can drive to the fast food outlet with my order placed and ready (immediacy) and end up picking up the order from in-store personnel (interaction).

This is just one great live example that we can see around us. 

AR or also known as Augmented Reality in stores is also a thing, there are several retail stores, like Ikea for example, that lets customers scan and access augmented reality that allows them to place different furniture in their house, this allows them to see how it would suit the interior, rather than just visualizing. 

VR (Virtual Reality) tech is being used as well, Nike allows their customers to use VR to understand exactly how their shoes are made. Another great example of VR in retail is BMW, they allow their customers to completely customize their cars on their smartphone, after which they can use VR goggles to see and experience the drive in the very same car they designed. 

AI (Artificial Intelligence) has also made its way into retail, some stores use AI to understand the likes and dislikes of customers to give them customized options and Facial Recognition Technology is helping make payments easier as well. Additionally, there are now robots taking orders at several fast food outlets and even doing some of the cooking. 

Several retail stores in Japan use bots to greet and help people with their purchases, this reduces the number of people who walk away from stores after being unable to find their desired product.  

These bots are also designed to handle inventory, which further reduces the burden on the employees. 

These are some great examples of phygital experiences in retail stores. 

How To Start The Implementation of a Phygital Strategy?

Having a great brand-customer relationship is pretty much what drives sales apart from the availability of products. If you want to improve the customer experience you provide, then you ought to put yourself in the shoes of a customer and understand their problems and frustrations. 

Here are small step-by-step pointers to help you start in the right direction:

  • Analysis of present business operations. Before you plan to phygitize your brand, you must analyze your current business operations and understand how you can implement a phygital strategy!
  • Choose your tech wisely - modern tech is quite alluring, to be honest. But trying to use and implement every tech at hand could be detrimental to your goal. You should understand what resources you have and what you can do with them so you can use technology that makes sense for your brand. 
  • Analyze the market, vendors, and solutions for the same. 
  • Now you must choose a platform to integrate the physical and digital aspects of your marketing campaign. 

Here are a few essential tips you should consider implementing if you want to offer a phygital experience to your customers. 

Omnichannel Strategy

This means making use of multiple channels solely for customer interaction and engagement. With the customer being the focal point here you can improve their customer experience just by giving them several options for communication. 

Merge Digital and Physical Marketing Campaigns 

With careful and creative planning, it is possible to merge digital and physical marketing campaigns to bring about a great phygital experience. 

Here are a few of the main goals of an integrated marketing campaign 

  • Offer top-notch service to improve customer experience
  • Boost sales. 
  • Further, strengthen brand-customer relationships

To successfully implement an integrated marketing campaign, you ought to have a good understanding of the different channels that you can make use of to better understand the needs of your customer. 

Use Technology

This goes without saying, there is no phygital without digital. Use tech (devices and software) such as digital payment trackers, QR codes, phones, VR, AR, and other emerging phygital technology. 

Here are a few things you must ensure while making use of tech as well, it should be befitting to the industry you are in, and also whatever tech/software you make use of, should be immersive by nature. 

One great example is Amazon Go, they have a digital payment tracker. This means customers simply go to the Amazon Go store and walk out with the product they want. The payment is automated, the digital tracker deducts the amount from their Amazon Go account after they walk out of the store. 

Of course, to offer the best phygital experience, you need the latest tech available, and none of it comes cheap. In such cases, you can be innovative by tweaking your app/website to be more immersive and include more channels in the same. 

Offer Great Marketing Experiences

In one sense, we’re referring to the element of surprise. For example, sensory marketing or experience marketing lay emphasis on catching customers off-guard! 

In other words, surprising them with creative marketing acts in situations and places, they typically wouldn’t expect with the aim of getting them excited. This is because the availability of products is no longer enough, as customers we’re seeking amazing experiences from every angle. 

As a brand, if you put more emphasis on the experiences provided as well, you can stand out from your competition. 

Pop-Up Stores and Social Media

Setting up pop up stores is another great idea brands can get behind. Here customers can use their smartphone devices to view, review products, and even purchase them. 

Social media platforms are great places for advertising products and even better for building strong brand-customer relationships. Social media platforms are always being updated with features to help brands strengthen their customer relationship as well as improve their online marketing campaigns. 

These are a few tips to further help you phygitize your brands and customer experience. 

Benefits Of Phygital Commerce

Here are a few benefits of phygital commerce! 

Boost customer experience and satisfaction  

The right combination of physical and digital aspects of the purchasing process boosts customer satisfaction. It gives customers a slew of options to choose from! Furthermore, the virtual shopping experience makes it all the more easy for customers to find their desired products. 

Increase brand awareness

This goes without saying, if a phygital marketing strategy is implemented, it makes the brand more known and also helps in increasing the brands' legitimacy in the eyes of your customers and the general public. 

It offers customized attention 

Customers love being valued and with the help of phygital technology, it becomes easy to cater to their likes and offer personalized options. 

Live Commerce and Phygital 

Live commerce is the next-gen eCommerce, although it is pretty recent it is taking over every industry. 

What is live commerce?

Livestreaming commerce is nothing but a mix of live streaming and eCommerce. 

Brands all over the globe, of late, have started getting behind the concept of live commerce. A brand can live stream shows to display their products and also enable customers to buy the product during the live shows, this is live commerce and it offers quite the phygital experience. 

Social media platforms are one of the best places to start live streaming, especially, if you have a lot of followers. 

There are several ways you can gain success, audience, and push sales with the help of live commerce. In fact, if you take a look at the numbers, livestream commerce has left quite the mark. Within a span of 5 short years, live commerce has propelled China’s sales and their live commerce market in near future is predicted to be around $480 billion. 

As of today, it nearly accounts for 20% to 30% of all their sales. Again, this is all just within a relatively short period. To further add to it, the live commerce industry has experienced exponential growth by nearly 80% since 2020 and it seems like there is no stopping it. 

Implementation Of Live Commerce

Being the young channel that it is, Livestream commerce is yet to be explored in its entirety. To implement live commerce the best you can, make use of current eCommerce practices that have been working out for your brand.  

You can phygitize customer experience with help of various live commerce formats, here are a few to start off with:

  • Online Marketplaces - it's a great place to start. Online Marketplaces have been catering to the likes of brands small and big. They've helped strengthen the relationship between brands and consumers. 

From a customer's viewpoint, you can review products, compare prices, and buy them at your leisure. It helps the brands in showcasing their products and their uses without the need for a physical store. 

  • Influencer Marketing/Streaming - probably the most famous live commerce format. Brands making use of influencers with a good following to market their products have seen growth in their audience as well as their sales. Influencer marketing, currently, works best with gen z and millennials. 
  • Brand's website: -  Probably the best channel for maximizing conversions for brands with a high volume of website traffic.
  • Exclusive Events - hosting exclusive live events is an excellent way to garner attention and improve sales. These exclusive events can revolve around product launches, special holidays (valentine's day, Christmas, etc.), brand anniversaries, and many more. Exclusive events around such occasions build excitement and suspense among people. This helps drive more attention and sales. In simple words, it becomes easy to phygitize customer experience with exclusive events. 
  • Tutorials - a format that suits the cosmetic and fashion industry the most. Brands from either industry can host live events teaching their audience more about fashion/cosmetics and how to make the best use of it! Furthermore, they make suggestions based on customer requests, which further strengthens the brand-customer relationship.

Additionally, here are a few tips to further help you successfully implement Livestream commerce and subsequently phygitize customer experience. 

  • Be careful with the choice of platform. Every platform/online marketplace will not work well with every brand. For example, the brand's website will work well with brands that have a large website traffic.

On the other hand, customers who want detailed information about products use online marketplaces like Amazon. 

  • Good content is a must. Host live events that revolve around topics that are loved by people in general. This helps in drawing attention. 
  • Don't forget to promote. Good promotional strategies never fail to gather more audience. Phygital marketing can help in boosting audience and sales tenfold. 
  • Keep it entertaining. This is a rule you must not forget. Make sure you make live streaming entertainment by engaging the audience, asking them questions, and using tech like AR/VR. 

In simple terms, live streaming is turning out to be the best way to phygitize customer experiences. 

How Does The Future Look For Digital Marketing?

It is quite hard to predict what the future of marketing will look like!

There have been innumerable changes since eCommerce became a thing and we have only been making progress in huge steps and strides. But we can surely speculate and we think that phygital will be catered entirely to a customer’s store journey with experience that offers information in real-time. 

This suits retailers of every kind, it gives them the ability to offer their customers a slew of purchasing options/opportunities and offer alternatives for the same. AI will probably have quite the role to play in analyzing purchasing patterns in order to predict future purchases. 

Phygital Marketing - A Few Great Examples

Pokemon Go

This happens to be one of the best and most entertaining phygital examples of phygital marketing. A game that uses the concept of Augmented Reality where the players physically go around collecting pokemon. 

To further iterate a great phygital strategy, if the players were near a coffee shop/cafe, or an eatery, they would get a few discount coupons that would further prompt them to visit the physical store for a coffee. This was one of the most played and goes without saying quite a lot of retail stores did benefit from this. 

Timberland 

The famous footwear manufacturing company, in 2016, tried a unique phygital marketing strategy in their Manhattan store. They introduced “TouchWalls”, where customers could look at online inventory and learn more about the footwear just by touching the picture. It further allowed customers to create their very own shopping lists. 

Alexa

Another great example of phygital marketing. Alexa, a virtual assistant technology that can play music, and videos, make calls, and do a lot more! 

Although people primarily use it for entertainment purposes, brands have started leveraging this tech as well. Companies are now continuously developing new virtual/auditory tech to help people with their daily tasks. 

Final Word

Remember, consumers are phygital and if you want your brand identity/sales to increase, then you should implement phygital marketing strategies. 

There is no doubt, physical stores are on their way out, but there are several things about a physical store that an online store lacks and is pretty much impossible to recreate. This is where phygital comes into play. It brings the best of both worlds!

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