What is phygital, how it works and what advantages it offers

Research from We Are Social from 2021 reveals that the average internet user uses digital devices for almost 7 hours a day. Given the standard eight hours of rest, the estimated percentage of daily time spent online is 40%. What does this data say? Basically, almost half of one's day is spent online, without a definite break between the two spheres of physical and digital life. In the phygital era, daily experiences are redesigned by the use of digital technology, in a progressive elimination of the dichotomy between physical and digital in favor of the " on-life " experience, to be applied not only to the market but to society as a whole .

Definition of Phygital

What does phygital mean?

Phygital means combining the best components of the online experience with those of the offline experience to create a new type of experience in which the two worlds (digital and physical) coexist within the same space and feed each other to generate a personalized experience , interactive and engaging: the phygital experience .

The origins of this neologism date back to 2007 , when it was used by the Australian agency Momentum Worldwide. The term was introduced for the first time in the world of marketing and communication, but today it is also used in various other fields .

Any place of consumption (store, supermarket, fair, restaurant, hotel, etc.), in fact, can become phygital if digital technologies capable of determining significant changes in the customer experience are implemented within it.

The three i's of phygital

A phygital experience is based on three essential elements, now commonly defined in the sector as the three “ i ” of phygital , which correspond to immediacy , immersion and interaction .

• Immediacy has to do with the possibility of having "everything immediately", just a click away (this can be achieved, for example, with the implementation of interactive totems within a store that allow the customer to easily search for products according to your preferences).
• Immersion refers to the fact that using digital devices activates a state of strong concentration and immersion in the activity. An excellent example is offered by the Nike flagship store in the SoHo neighborhood in New York where consumers can try out the performance of the shoes in a "running trial zone", i.e. a treadmill placed in front of giant screens that project scenes of a run filmed in streets of Central Park.
• Interaction is the element of the experience that is missing from online channels: it refers to the ability to explore the surrounding environment through all five senses (for example, the ability to touch and test products) and to interact with staff sales team and with other customers.

In order for a phygital strategy to be defined as such, the technologies used must allow the introduction of the elements of immediacy and immersion in the physical place. The interaction element remains an essential part of the experience and can itself be enhanced through technology.

Phygital: Why is it relevant for marketing and what are the benefits

The market scenario has been profoundly changed by the digitization process of every area of social life, by the hyperconnection granted by mobile devices and by the growing use of smart technologies by organizations and individuals. Consumers today, in fact, use different channels to connect with companies and move between online and offline channels to search for information, compare prices and complete their purchasing process.

This has given rise to customer journey paths such as showrooming and webrooming , driving the need for companies to adopt an omnichannel perspective to ensure the fluidity and consistency of the customer experience.

Digital technologies create increasingly interactive and stimulating experiences for customers, but the latter do not seem to want to abandon the convenience and authenticity of offline experiences. Consequently, on the one hand traditional brick and mortar businesses are equipping themselves with the necessary tools to carry out the digitization process , on the other hand companies born as online only are creating hyper-digitalized physical stores in order to provide consumers with the benefits deriving from both online and offline contexts (e.g. Amazon with Amazon Go).

Phygital is the solution for the transformation of physical stores in the digital age: the spaces are completely redefined to offer a new customer experience using digital tools as sales support. In this way, the needs of customers who require increasingly personalized and seamless experiences are satisfied (i.e. experiences that allow the customer to move freely between different online and offline channels, without interruption of continuity throughout the customer journey), as emerges from the Salesforce report "State of the connected consumer", and you have several additional tools available to try to generate that wow effect that allows you to make the experience memorable.

The main advantage for companies is that they can use the large amount of data collected by the technologies used in phygital to better analyze the preferences, behaviors and habits of on-site customers. This data, in addition to being used to improve the phygital experience itself, can be added to data collected in other company channels to create a large database that allows continuous optimization of marketing strategies in an omnichannel perspective.

Organizational and logistical processes are also positively affected by the use of a phygital strategy. For example, technologies can be used that can signal the lack of a product in the store and autonomously send a notification to the warehouse for replenishment. Phygital can be used to facilitate the work of staff and streamline processes.

Examples of phygital marketing and other applications

It is possible to exploit phygital in different sectors and for different purposes; in this sense, phygital is a tool that allows you to create innovative and original touchpoints with customers with the aim of enriching the experience and stimulating engagement.

In addition to being an increasingly used tool in marketing and advertising, however, the use of phygital is also growing in different sectors due to its ability to involve people and stimulate their curiosity. An example is offered by the use of phyigital in teaching . Educational methods and lessons become phygital when they take advantage of the support of technology to generate greater engagement and stimulate student interest. According to a study, the use of augmented reality devices (AR) in the classroom would have been judged as an incentive to attend the course by 80% of the sample (made up of students); moreover, according to 70% the AR would have allowed them to learn faster and easier. These data, therefore, would seem to confirm a particular effectiveness of using a similar approach.

Augmented reality device in an anatomy lesson

The use of a phygital approach is also growing in the cultural and entertainment sectors (museums, art galleries, concerts, etc.). The implementation of interactive technologies in the physical place allows you to create memorable moments for the user and thus increase immersion in the experience.

Phygital advertising: the KLM Live High Five case

KLM Airways has devised an innovative “ Live High Five ” DOOH (digital out of home) campaign to attract the attention of passers-by. The company has positioned two interactive totems , one in front of the Rijksmuseum in Amsterdam and the other near the Flatiron Building in New York.

These totems were equipped with a touch screen, speakers and cameras that allowed passers-by in the two cities to see and communicate. The goal was to get people to interact and "high-five" each other through the screen. Whoever managed to coordinate perfectly with the person on the other side of the screen was awarded a KLM ticket for an Amsterdam-New York route.

In this campaign, KLM has created a phygital experience guaranteeing users immediacy, immersion and interaction through the use of totems. The initiative stimulated the engagement of passers-by, generating amazement and curiosity. The totems also made it possible to exploit a gamification mechanism that prompted many people to try to win the prize. In this way KLM has had a great image return for the innovative idea and has shown itself to be a company capable of physically connecting people from all over the world, not only with flights but also with technology.

Phygital store: the Rebecca Minkoff case

Rebecca Minkoff's flagship store in New York is in all respects a phygital store . Inside the store there are magic mirrors , interactive touchscreen mirrors, which allow the customer to view all the brand's products and select the one they want. Through the same screen, you can even order a drink and reserve a cabin to try on the garments.

By downloading the brand's app on their smartphone, the customer enters a totally personalized experience in the store tailored to their needs.

The customer receives a message with the number of the dressing room to go to; there he finds the previously selected garments ready to be tried on. The dressing room ( phygital fitting room ) is equipped with a magic mirror that automatically recognizes the garments and allows you to contact the sales staff to request different sizes or advice. Even the light conditions inside the dressing room can be adjusted via touchscreen controls. Once the items to be purchased have been chosen, the customer can select them on the screen and automatically receive the bill on their smartphone, to then decide how to make the payment.

It is a 360-degree phygital experience that immerses the consumer in an exclusive and customizable reality, not only through the digital devices present in the store, but also through their smartphone.

Phygital museum: the case of the national museum of Singapore

“ Story of the forest ” is the name of a large immersive installation that transforms 69 drawings from the William Farquar collection into three-dimensional animations . The digital forest unfolds in a virtual landscape that immerses visitors in the history of Singapore from its colonial past to the present day.

By downloading the exhibition app it is possible to interact with virtual reality ; the app scans your vicinity and updates in real time as you move along the route. If the visitor manages to take a photo of a virtual animal present in the forest, the image is displayed on the app, allowing to discover additional information and create a sort of archive of all the animals that are "captured".

The exhibition changes continuously as if it were a real forest and shows different colors and animals as you continue along the path and each time it is visited.

A real phygital experience that immerses the visitor in a dreamlike reality, giving life to an experience of escaping from reality capable of involving and astonishing for its ability to continuously renew and enrich itself thanks to the data collected by the smartphone.