What is phygital marketing? 8 examples of phygital experiences

Let’s explore everything you need to know about phygital marketing and how it can help you build a successful marketing strategy.

Ana Rukavina

Have you ever bought an item online and opted to pick it up in store? Or scanned a QR code in a store to get more details on a product? Well, that’s phygital marketing in a nutshell.

What is phygital?

Phygital is a combination of physical and digital. It combines face-to-face experiences and digital technologies to create a more immersive and personalized user experience. And this smooth transition from physical experiences to digital ones, and vice versa, is the essence of phygital marketing.

Phygital = physical + digital

Evolution of marketing from physical to digital and then phygital

Marketing has come a long way from the traditional physical methods to the ever-evolving digital landscape we see today. In the past, marketing efforts relied heavily on physical mediums such as billboards, print advertisements, or direct mail.

These methods effectively reached a mass audience but could not target specific demographics or track the success of campaigns in real time. And with the rise of the internet and digital technology, marketing has shifted towards a more targeted and data-driven approach.

The transition from physical spaces to digital has provided businesses with more efficient and effective ways to promote their products or services. But it has also given consumers more control over the content they engage with.

Let’s take email marketing, for example. Businesses can tailor their content based on user preferences. If customers often open emails about swimming gear, they can send them more content with similar topics. At the same time, the consumers have the option to opt-out or customize what emails they receive.

And yes, digital has transformed marketing operations, but the physical experience still has much to offer consumers.

Do you remember when they said that the physical book would die with the arrival of e-readers? Or that Netflix would make cinemas unviable? Well, that hasn’t happened.

For example, if you run a billboard campaign, you would first gather statistics from the outdoor vendor about demographics, footfalls, eyeballs, etc. But now you have digital billboards, where you can use your customer data platform to match the demographic data to target the right areas.

This does not mean replicating an experience or functionality from one channel to another. It is about continuous integration. Understanding which channels the customer prefers and creating a more fluid omnichannel communication.

Although they are different concepts, an omnichannel strategy can be an ally in implementing your phygital experience. This is because channels and databases share information, monitoring each stage of the consumer journey, whether online or offline.

Examples of phygital marketing

The global virtual and augmented reality market in retail is growing. The numbers speak for itself:

$12.45

Mobile augmented reality (AR) market in 2021

$17.9M

Projected mobile augmented reality (AR) market for 2026

Source: Statista

Every day you may encounter many phygital experiences without even knowing it. Here are some of our favorite campaigns:

Warby Parker

Warby Parker is an example of a digital-first company. They realized that a portion of their audience still wanted that in-person experience and opened their first store in 2013.

Amazon GO

When shopping in Amazon stores, customers can Just Walk Out of the store after shopping. Any item they take off the shelf is automatically added to their virtual card, and any items put back on the shelf are removed. The charges are applied to the payment method saved in their amazon.com account or credit card.

Nike’s pop-up store

Nike’s pop-up store in Los Angeles leverages data from online transactions to restructure the store’s offerings. They can see what products are in higher demand and restock accordingly.

The customers can also redeem rewards at the shop, book a product testing session, reserve products for pick-up, and make returns by texting the store with the Nike app.

And every two weeks, NikePlus members can use their passes to redeem items or rewards at the NikePlus Unlock Box (a vending machine).

Sephora

Sephora’s app recognizes when customers are in the store. Through the mobile app, they receive an in-store map, promotions, shopping cart, and wish list.

Employees can scan customers’ faces with a ColorIQ device to match their skin tone. This device generates a 4-digit color code unique for each customer. They can use it to find the perfect shade specific to their skin tone.

Their website has Sephora’s Virtual Artist. Customers can take a photo of their face and swipe through numerous lipstick colors to test it directly on their lips.  

IKEA’s Place app

IKEA Place allows users to plan and decorate their home, office, or studio from their home.

They just have to scan their home and pick the product they want to see in real-life settings. The app automatically scales products based on room dimensions.

Marks and Spencer’s

Marks and Spencer’s has a virtual changing room. Customers can “try” and see themselves in various outfits without physically trying them in a changing room.

Happy Moon

Happy Moon offers its customers a 3D menu. When they scan the QR code, they can see the items in their exact size, with all the details and garnishes.

Disney

Disney used a virtual-world simulator to recreate one of their theme parks in 3D. This allows people to have immersive and personalized 3D virtual experiences without wearing an augmented reality viewing device.

What are the advantages of a phygital marketing strategy?

Improved customer experience

According to McKinsey, personalization marketing can lift revenue by 5 to 15 % and increase ROI by 10 to 30 %.  

By integrating digital tools into physical interactions, customers can access information, products, and services anytime on their preferred devices.

Additionally, the phygital approach allows for tailored recommendations, offers, and content based on customers’ preferences, behavior, and location. This level of personalization enhances the overall customer service and experience.

For instance, in-store kiosks allow customers to conveniently place orders or be informed about products, promotions, or other information.

Or QR codes that lead to WhatsApp chats, where they can see the inventory and choose to buy the item from another location and have it delivered to their home address.

Implementing such digital solutions in your physical store creates a more immersive and personalized user experience.

Enhanced brand recognition and loyalty

You can actively engage your customers and create memorable experiences by incorporating interactive events, games, and contests. These activities allow customers to not only have fun but also connect with your brand on a deeper level.

And by providing platforms for customers to share their feedback and opinions, you can demonstrate that you value your customers’ input.

This sense of involvement and inclusion helps customers feel a sense of loyalty towards your brand.

Also, by joining online communities, customers can interact with other like-minded individuals who share similar interests in the brand.

This creates a sense of belonging and fosters a community of loyal brand advocates.

Data-driven insights

Customer data can give valuable insights into customer behavior, preferences, and trends.

By analyzing and interpreting the data from various sources, you can make more informed decisions and tailor your marketing efforts.

For example, you can find which channels drive the most traffic and conversions and allocate your resources effectively.

Additionally, data analysis can help in identifying patterns and trends. This way, you can create personalized and targeted marketing campaigns that resonate with your customers both online and offline.

Now that we have covered examples and the advantages of phygital marketing let’s go through how to develop an effective phygital marketing strategy.

How do you develop a phygital marketing strategy?

Research customer journey

The first step is always research. You need to research customers’ journeys thoroughly.

For eCommerce businesses, this means identifying the physical and sensory shopping experiences that online shopping lacks—and finding ways to bridge that gap.

On the other hand, brands with physical storefronts should explore how digital technology and activity can enhance that in-store experience.

For instance, if your customers want to order something but want to try it in person, through your app, they can find the nearest location via Google Maps and direct them to a WhatsApp chat to schedule the appointment.  

Review customer feedback

Customer feedback and reviews can provide valuable insights into areas that need improvement. You can identify opportunities to implement a phygital marketing strategy addressing these concerns.

Set clear goals

Some businesses may want to scale their in-store operations, while others may aim to reach new audiences through e-commerce. By clearly defining these goals, you can identify the tactics that align with your objectives.

Start small

If you have focused only on one – digital or physical – implementing something extreme may cause a counter effect. Start with something small.

For example, try inserting QR codes in physical stores. Now, your customers can see extra content about a particular product on their mobile phones or tablets.

Adequate integration

One of the biggest mistakes you can make is just copying a campaign from one channel to another. Meaning you should align campaigns that work both for offline and online channels.

A good phygital strategy includes thinking about each channel’s strengths and how they can create unique experiences.

This also means your data management platform must have a unique and clear view of everything. Only then will you be able to use data to optimize and personalize experiences regardless of the channel they interacted with.

It is essential to point out that developing a phygital marketing strategy isn’t a one-time effort but an ongoing process. Regularly assessing and improving your approach is vital to staying relevant.

Future trends in phygital marketing

The future of phygital is dynamic and ever-changing, with several trends shaping the landscape:

AIML integration

Integrating artificial intelligence and machine learning in phygital marketing strategy can help you with in-depth customer insights and predictive analysis.

If you are in retail, collecting data from your customer’s online and offline behavior, you can generate highly personalized product recommendations. Using this data, AI systems can integrate physical and digital experiences into one.

For example, you can use intelligent mirrors that display personalized outfits suggested based on customers’ previous purchases.

Metaverse

Metaverse is a concept that is gaining significant popularity in phygital marketing.

“The metaverse is a place of mass audiences, where there’s a true opportunity for brand integration, for brand expansion, and for brand expression,” said Lindsay Anne Aamodt, senior director of marketing at IMVU, organizer of the first fashion show held in the metaverse.

Projected metaverse market revenue worldwide
from 2021 to 2030

$38.85B

2021

$41.48B

2022

$678.8B

2030

Imagine this, you are launching a new car model. With AR and VR stations in your showroom, visitors can test drive the car in a simulated environment.

Simultaneously, you create a virtual showroom in the metaverse. In the metaverse, there is an exact digital replica of the car that they can explore, customize, and test drive.

If you want to explore more marketing opportunities in the metaverse, read McKinsey’s blog.

NFTs

“The biggest opportunity for physical goods is virtual goods,” said Ryan Mullins, founder and CEO of Aglet.

The innovative use of NFTs in phygital marketing creates a seamless customer experience, connecting the physical and digital worlds.

For example, an art gallery wants to promote an upcoming art exhibition. Each artwork in the gallery has a QR code with information about the painting. They also create NFTs that represent the digital version of the piece. NFT owners can access exclusive virtual artist discussions about their work, behind-the-scenes, and private viewing.

Blockchain

Blockchain technology can be used for customer data protection, product authentication, supply chain transparency, and more.

For example, it can help luxury brands authenticate products, combat counterfeit goods, and allow customers to trace the origins and journeys of products.

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Oct 24th, 2023
9 min read

Ana Rukavina