When Brian Solis introduced the concept of Digital Darwinism, he aimed to highlight how the rapid evolution of technology would significantly affect consumer behavior. Twelve years later, we’re at the height of the consumer experience revolution thanks to phygital.
According to a McKinsey Global Survey, the COVID-19 crisis alone accelerated the digital progression by several years in just a few months, and businesses are swiftly trying to adapt.
This has come in the form of restructuring their marketing strategies, and not just by having a digital footprint, but by combining the best of the virtual and physical worlds.
Let’s look at that in detail.
What is Phygital?
The term phygital is born from the "marriage" of the words physical and digital. It goes beyond a marketing channel strategy by providing a unified experience of online and real-world elements for users. Essentially, it’s about enhancing real-life settings with digital tools to improve user engagement and satisfaction.
Now, think about this for a minute: online shopping at the very least is convenient, cost-effective, and accessible, but why is the rate of online cart abandonment at 70.19%?
It’s because consumers are more often purchasing experiences rather than product and service offerings.
The phygital experience solves this problem by using an omnichannel marketing approach where the offline and online components of the shopping journey complement each other to cater to the needs of the consumer.
Digital Signage As a Leading Phygital Tool
The life-changing contribution of digital signage in enhancing the customer experience today is too great to ignore. A study revealed that digital signage can increase brand awareness by 47.7%. Its visual appeal, dynamic content, and tailored messaging capture attention and greatly influence purchasing decisions.
Because of this, digital signage has become an indispensable tool in making phygital a reality. Here is how:
Displaying Content Based on Gender and Age
Especially in retail digital signage, display screens are integrated with cameras equipped with facial recognition software that can identify facial features and patterns. For example, the presence of wrinkles might indicate older age, while the overall structure of the face can hint at gender.
Identifying the demographic of viewers in turn allows for content or ad displays specifically tailored to that audience.
Lift & Learn Technology
The lift and learn technology is product information at your fingertips. It saves customers the hassle of searching for retail associates for inquiries. Detailed information about a product immediately pops up once they pick it up. For tech and gadget stores, “lift and learn” can activate product demos or videos that showcase unique features or user testimonials.
Beacon Sensors for Personalized Offers
Beacons are small Bluetooth devices that send out continuous signals when smartphones or other Bluetooth-enabled devices come within range. You can integrate them with a store’s mobile app or CRM system.
When a recognized customer enters the store, the beacon can trigger a personalized message such as, “Welcome back, Alex! Based on your last purchase, you might like these new arrivals.”
Internet of Things (IoT) Integration
IoT has enabled an interconnectedness of devices that make use of sensors for more interactive and responsive content display. Such technology transforms digital signage from a one-way communication tool to an essential that caters to immediate needs.
Take for instance, a digital sign outside a clothing store showcasing raincoats and umbrellas during unexpected rain, sourced from real-time weather data. IoT is automatic and predictive which translates to timely information and overall customer satisfaction and engagement.
Augmented Reality (AR) and Virtual Reality (VR) Experiences
AR and VR technologies are where the line between the physical and digital vanishes completely. Sephora, a global beauty retailer for instance, introduced an AR feature that allows customers to virtually try on makeup products, from lipsticks to eyeshadows, using their smartphone cameras. The result has been easier purchasing decisions and overall satisfaction for their consumers.
AR and VR technologies turn a mere shopping trip into a fun and interactive experience that makes your brand memorable to consumers.
Benefits of Phygital Customer Experiences
Consumers today crave immediate and tailored experiences, and the phygital experience caters to these demands through:
Enhanced Customer Engagement
A phygital strategy surpasses a traditional or purely digital method by creating a fully immersive experience. Consider a shopper using AR to visualize a product’s fit while receiving peer insights from online reviews.
It’s a multilayered interaction that amplifies engagement and encourages consumers to spend more time exploring and connecting with your brand.
Seamlessness and Convenience
From difficult navigation and a lengthy checkout process to hidden costs, an effective phygital strategy addresses these pain points to remove friction from the customer journey. You can have interactive digital kiosks in your brick-and-mortar to guide customers efficiently or integrate a digital payment solution or self-checkout systems to expedite the purchase process. This blend is more convenient for consumers than when operating in isolation.
There is nothing more transformative for a consumer than walking into a store and feeling like it’s made just for them. One way to achieve this is to leverage the data collected from sensors or digital touchpoints which provides a more nuanced understanding of customer preferences and behaviours. This data isn’t just quantitative(foot traffic) but qualitative as well (like product preferences and interaction duration).
Examples of Phygital Implementation
Digital Signage Transforming In-Store Shopping
Digital signage offers instant product details, tailored promotions based on individual behavior, and guides customers through store layouts. This blend of interactive technology and tangible retail makes the shopping journey more direct and personalized.
Hospitality and Smart Rooms
Modern hotels are introducing phygital elements to enhance guest experiences. Smart rooms have IoT devices that enable guests to control lighting, temperature, and even room service through a digital interface. Augmented reality is also used for interactive hotel tours or to preview amenities to ensure guests can maximize their stay.
Banking and Digital Branches
Unlike traditional banking, blockchain technology has made banking processes like international transfers or verifications more streamlined, faster, and transparent. It merges the trust of physical banking with digital efficiency by validating and securing transactions for customers.
Entertainment and Theme Parks
In the entertainment industry, (Non-fungible Tokens) are offering a new kind of collectible. These are unique digital tokens that people can buy and keep as proof of their experiences. After a ride or show, visitors might get a chance to buy an NFT as a digital souvenir.
The Future of Phygital
A future trend in phygital is going to be hyper-personalized environments especially tailored to individual preferences. A customer will walk into a room, which will then adjust its lighting, scent, and even sound based on mood, drawn from recent online activity or wearable tech.
However, the success of this trend will depend on trust and transparency. Companies venturing into phygital will need to establish clear ‘trust contracts’ to convince consumers that they’ll use their data responsibly and ethically. That way, consumers will be willing participants in taking phygital to the next level.
Leverage Digital Signage for a Transformative Phygital Experience
As you can see, the future of customer experience is phygital. Unfortunately, businesses that will fall behind will struggle to find and retain customers. If you’ve ever thought of integrating the physical and digital into your business, then digital signage is a powerful tool. It will enable you to:
- Reduce operational costs with dynamic updates
- Enhance your marketing efficiency with targeted displays
- Drive sales through real-time promotions, and
- Streamline your analytics for improved strategy formulation
To get you started, try our digital signage software with a 14-day free trial to see if it’s right for you. Our platform is designed for simplicity and effectiveness to ensure that even those new to digital signage can navigate with ease.