September 8 2022

How to Get Phygital: Bridging the Gap between the Physical and Digital Experience

In 2013, the Australian agency Momentum coined the term "phygital." However, it wasn't until COVID that many businesses began to see the importance of a cohesive physical and digital consumer experience. Consumer trends pre- and post-pandemic led to what's known in the industry as "phygital" marketing — the merging of physical and digital experiences. 

This approach allows brands to enhance and personalize the customer experience, and when done right, phygital marketing can help you carve out a competitive edge. 

Here is why getting "phygital" is no longer an option among retailers, plus ways to implement an effective strategy. 

Now is the time to get phygital 

Over the past decade, purchasing power has shifted online, and when the pandemic hit, digital sales exploded. According to a recent report on online sales, the top 500 retailers in North America generated a combined $849.5 billion worldwide in 2020 — up 45.3% from the year before. During this time, brick-and-mortar stores experienced a significant dip in foot traffic — these physical retailers needed to adapt, implementing a wide range of strategies. For example, some retailers launched their first apps or online shops while others developed pickup and delivery programs — all within a matter of weeks. 

Many of those who pivoted will continue to benefit for years to come. Greater cohesion between physical and digital realms streamlines consumer experiences, which is more crucial than ever. Now that consumers are back shopping offline, the most successful retailers continue to invest in phygital trends, bridging the gap between physical and digital shopping experiences. 

Investing in innovative solutions, especially those that help drive sales and customer loyalty, is key. For example, consumers love the convenience of the buy online, pickup in-store (BOPIS) shopping experience. The measurable results of this movement are nothing to sneeze at, either. Data shows that improved curbside experiences can drive 400% more consumer visits and increase revenue by around 225% per transaction.

The risks of not prioritizing a phygital strategy

The concept of the smart phygital era was born long before the pandemic. However, the recent pandemic-related pressures on retail forced accelerated transformation. In 2018, research was published on the future of retail, focusing on smartphones' role in improving customer experience. The conclusion was that blending physical and digital experiences is imperative to retailers' success. Those struggling to find success are often those who have a weak digital strategy and poor omnichannel execution

The goal is to create a more human retail experience using innovative technology. If you don't, you risk being left behind. The proof is in consumer behavior. Although 63% of shopping begins online, 49% of Americans prefer to shop in physical retail stores. When you can meet customers at various points in their journey, you can boost conversion rates, achieving greater loyalty while driving brand awareness. 

The impact of phygital experience is so vital that even eCommerce brands offer a physical dimension to their digital brand. For example, Amazon Go partnered with Starbucks to provide a unique experience. Using "Just Walk Out" technology, customers can enjoy a checkout-free shopping experience. This scenario shows how rapidly the phygital realm is unfolding. 

So, the major risk here is losing your competitive edge, equating to lost customers and diminishing growth. 

The rise of location-based technologies 

Whether your goal is to increase foot traffic in-store or create more engaging experiences, you must meet new customer expectations. For example, if you offer click-and-collect services, the online shopping experience shouldn't end at checkout. Although consumers expect great products, they are no longer just buying products — they're buying experiences. 

Location-aware technologies are transforming the customer experience, paving the way for more personalized online and offline messaging based on physical location. Many location-based marketing strategies deliver digital content in context, all of which help retailers create a more seamless phygital experience, including the following. 

Geotargeting and geofencing – When you invest in a proximity marketing platform, you can create real-time opportunities to connect and engage with consumers at a specific place and time. For example, when consumers near your store, they can receive automated, personalized push notifications. When you can target your online marketing efforts based on a specific location, the result is increased sales, more engagement, and greater customer loyalty. 

Beaconing –  A well-placed beacon can transform how consumers shop. This method is a powerful tool to leverage consumers' mobile devices to deliver personalized content. It can also unlock invaluable data surrounding consumer behavior. Whether you provide your target audience with maps, information on store sales, opening hours, coupons, or personalized product recommendations, these experiences drive awareness and boost revenue. 

RelatedUnderstanding When to Use Beacons and Geofencing

Regardless of the technology you implement, streamlining physical and digital realms will require you to focus on three critical elements — immersion, immediacy, and interaction. You'll want to make customers a part of the experience, send the right messages at the right time, and encourage consumers to engage with your products. 

Additional tips for creating greater cohesion 

There are many possibilities concerning a successful phygital strategy. So, there is no black-and-white template. You'll want to implement a strategy that works for you and your consumers. With that in mind, the following tips will guide you in the right direction, allowing you to customize your approach. 

Introduce faster payment processes. This advice can mean different things for different retailers. You may want to start with something simple, such as giving your customers the option of paying via a digital wallet in-store to ensure a smoother, faster checkout experience. You could then take that implementation one step further, offering the option of mobile contactless payments within a loyalty app. This approach is an innovative phygital strategy that can set you apart. 

Another example of a more cohesive experience would be in-store social and leisure areas with free WiFi. This gives the customer an enjoyable, more engaging experience, all while creating the opportunity for you to connect with them. You will also benefit from real-time data. You can get creative with the concept of WiFi marketing — it's all about building automated campaigns that convert.

When you start to view cohesion as a necessity, the possibilities of the hybrid world open up. Once you pair your vision with the latest available technology, you can start to enjoy higher conversion rates. Think of this step as an investment in your future growth.  

Mobilozophy is here to help

Mobilozophy offers mobile marketing solutions that help businesses connect, drive engagement, and promote greater brand loyalty. From proximity marketing to mobile payments and loyalty programs, connecting with your targeted audience has never been easier. Offering a spectrum of products and solutions, Mobilozophy has the tools needed to ensure a unique phygital experience that will benefit you and your customers.

Begin with one or two unique products or solutions and then adjust over time. The sooner you implement location-based technology and other robust phygital solutions, the more you'll benefit from the associated data collection. You can then use that data to understand your strategy's strengths and weaknesses and adjust accordingly.

For example, geospatial analytics will provide you with accessible, cost-effective data. As you build more insightful campaigns, you can supercharge your ROI. From segmentation to consumer profiling, now is the time to start experimenting with what works best for you. 

Ready to get started? Don't hesitate to contact us to discuss your needs and request a demo today!


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