The Future is Phygital: Physical and Digital

Mike Welsh
Publication Date
19 April 2021

The Future is Phygital: Physical and Digital

The Future of Great Customer Experience is Phygital

What is phygital?

Phygital simply combines the words physical and digital to create a new word: phygital. While it’s not exactly clear who coined the term, we started using it at the height of the COVID-19 pandemic. Why? Because we noticed more companies quickly adjusting their strategies to digitally accomplish tasks that had previously been accomplished in-person. This includes things like grocery shopping. The success of mass retailer curbside pickup solutions and delivery programs attests to the fact that consumers are now very comfortable using a mobile app to “walk the aisles” for them. Other examples include using a phone to look at a restaurant’s menu, paying for gas without having to touch a payment terminal, or using a connected device to monitor your health. While we don’t know whether or not the term “phygital” is going to hang around after COVID-19, the blending of physical and digital in the customer experience strategy is certainly here to stay. 

What’s phygital in the customer experience?

Considering the customer experience journey is critical to ensuring that whatever phygital strategy you create is successful. For example, if you create a mobile app for your convenience store and offer curbside pick up on quick meals but you don’t properly train store associates to engage with the app, you don’t have a successful phygital experience (or good customer experience, for that matter). We’ve seen many five-star mobile apps end up with a 1-star rating because the out-of-app experience with an associate didn’t align with the in-app expectation, damaging customer satisfaction. Getting to market quickly should not be at the associate’s or customer’s expense. Thinking about the kind of customer experience you want your users to have is critical to your success. It’s not enough to simply check a box to say that you have a mobile app or website. These digital experiences must be optimized to account for the more common phygital experience that many customers will have with your brand.

What is a phygital strategy?

Creating a phygital strategy must, again, start with assessing your current customer experience. Where are customers running into challenges? What moments of achievement do they have that you want to invest in more? These kinds of insights will give you a lot to work with and can help guide you in the direction necessary to creating a phygital experience that not only meets, but exceeds, customer expectations. What can you do to blend your physical and digital experiences together, for the better? The goal is to create the kinds of immersive engagements that customers find so easy that it achieves silent utility - it works so smoothly that you don’t even have customer feedback from your users because it simply works. That’s when you know you have a great strategy because everything simply works for your customers and the effort required of them to engage with your brand is so minimal that it keeps them coming back.

Examples of phygital experiences today

There are many ways to enhance the phygital experiences that you already have. Let’s take a look at some real life phygital examples and how they can propel your customer experience.

  • Kiosks
    A classic example of phygital is using a kiosk. Whether at the airport, a bank, or restaurant, a kiosk makes it possible for users to accomplish routine tasks quickly and efficiently using digital technology in a specific physical space. Just about everyone has used one and they’ve become so commonplace and accepted that most consumers don’t even think about this as a digital experience - it’s just the way things are done. 

In the time of COVID-19, some customers may not feel as confident using a kiosk versus engaging face to face with another person. In a post-COVID world, there are also many ways a kiosk can be reconsidered to make the phygital experience better. Consider walking into a quick service restaurant and stepping up to a kiosk that already knows you’re there because of geofencing. The kiosk greets you, recommends items you’ve bought previously, and matches the information you have in your mobile app, such as payment information and dietary restrictions. This kind of engagement simplifies the kiosk experience, making it so customer centric that they have the best possible interaction with your brand, boosting customer loyalty as a result.

  • Mobile apps, curbside pick up and delivery, and BOPIS
    According to a Mobiquity survey, consumers predicted that they’ll use curbside pick up even more once social distancing has relaxed – up to 125% of their total volume of purchases. The convenience that curbside, buy online pick up in store (BOPIS), and mobile apps offer customers is being embraced more and more everyday. As more people get the COVID-19 vaccination and head back into convenience stores, restaurants, banks, and retail stores, the companies that have spent time thinking about how to offer the safest, most convenient experiences will win. 

Take, for example, the introduction of QR codes at restaurants. Using your mobile device, you can scan a QR code on your table and view the menu or drinks on tap without having to touch a physical, printed menu. These kinds of technologies will continue to emerge even after social distancing subsides thanks to the convenience and safety that it offers. But not every customer will want to rush back into a store or restaurant. And not every customer will want to use technology. Therefore, your phygital experience must account for the various types of customers you’ll be serving. 

Baby boomers are more likely to want support when it comes to learning how to use your technology. Millennials and Gen Z will expect you to have mastered your tech offerings by then. Your job is to ensure that all your customers have what they need – and that means creating a phygital experience that is accessible for everyone. 

  • Websites and customer portals
    Insurance and healthcare companies are arguably the two most important industries when it comes to creating website portals. They both are expected to be easy to navigate in order for customers to self-service things like paying their bill or requesting a prescription refill. However, not all websites live up to this standard. Some are very difficult to navigate and customers end up calling a customer service line to get what they need. But it doesn’t have to be this way! 

First, websites should be optimized for mobile. Almost everyone has access to a mobile phone, which is often their primary source for everyday activities – and this includes managing their insurance and healthcare activities. In fact, did you know that 52% of consumers say switching insurers is easier than it used to be and 30% agree that they would consider switching insurers for better digital features, according to Mobiquity research. Insurance companies often rely heavily on the relationships that their agents have with customers, but imagine the difference that technology could make on the customer experience if agents were trained on how to teach customers to self-service. 

Switching to the healthcare industry, Mobiquity surveyed how baby boomers felt about technology, and we found that many participants expressed a desire to continue to use telemedicine into the future. Before COVID-19, only 10% of baby boomers had used telemedicine, and this has since increased to 48% after the pandemic began - a 469% increase in telemedicine utilization! Website portals with a telemedicine component will be essential as healthcare providers begin to think about how they can best serve patients. For patients that don’t need to be seen in person, website portals offer a phygital way for them to converse with their doctor while also leveraging technology to better fit their lifestyle.

  • Voice
    Amazon’s Alexa is a cloud-based voice service that is making its way into more homes every year. In 2020, 1 out of every 4 Americans reportedly owned a smart speaker device. But they can be used for more than just playing games or listening to music. More companies are creating voice skills to aid consumers with everyday tasks. And just like the other examples listed, it’s common for these experiences to have a digital component that is married with a physical one. For example, perhaps you ask Alexa to keep track of medical statistics that your wearable devices report each day. You can access that data at any time, even when you are entering a telemedicine appointment with your doctor and ready to have a conversation about that data and how it can be used to improve your overall health.

  • Digital payments
    At the height of the pandemic, we actually saw a shortage of coins because so many people were buying groceries, home goods, and other products online. When we look at the banking industry specifically, 37% of baby boomers said they are using mobile banking apps more than they did in the past 12 months. In addition, roughly one third of millennials agree they are more likely to switch banks in the next 12 months. It’s clear that banking consumers want more phygital options. These days, you don’t need to visit a bank to do many routine banking tasks. However, bank branches still exist and therefore you should be looking to align the in-person experience with the digital experience. But digital payments have a reach that goes far beyond digital banking. 

Retailers should also be thinking about how to make the purchase and check out experience easier for customers. Our client, Kum & Go, is a great example of this. Using their mobile app, they integrated digital payments so that customers could fill up their gas tanks with minimal effort and complete the purchase right from their mobile app. Integrating your mobile app with Apple Pay and Google Pay is another way to reduce customer effort and increase convenience. As more people begin to engage in-person, having the benefit of a phygital digital payment process is one that many will appreciate.

What role does marketing play in phygital?

It’s great to start thinking about how phygital will come to life for your business, but part of that plan needs to include your marketing strategy. How you communicate new digital offerings and configure customer support as users begin to onboard and utilize these experiences will be critical to your success. Consider signage for your stores to educate and convert in-store only personas into hybrid or digitally-friendly personas. Think about exclusive offers you can provide to customers that engage with your mobile app or website to encourage adoption. Are you adding personalization into the experience? All of these factors should be part of your overall strategy. Plus, don’t forget to measure and analyze your data so that you can continually optimize your phygital strategy for the best possible customer experience.

What is the future of phygital in a post-COVID world?  

In the future, true phygital experiences will have an advanced anticipation model. This idea of advanced anticipation is something that I suspect we will hear a lot more about as phygital experiences become more commonplace. For example, many of us have voice-activated remotes. You can speak the name of your favorite television show into your remote and instantly, your TV provider launches your program. But what if your TV and TV provider knew you so well that you didn’t even need to speak into the remote? It knew your preferences and routines and what you wanted to watch. That’s advanced anticipation. It’s like the Netflix strategy – capturing data that, over time, helps devices “learn” how to make helpful suggestions that point you toward the things that will be of most interest to you. 

Phygital is about bridging the relationship between a user (human) and activity (company) and making that experience so effortless that your customers don’t even notice that their life has become easier. In the post-COVID world, the line between physical and digital experiences will be so blurred that users won’t even recognize the difference. 

Will customers really want to give me the information required to create these immersive experiences?

Data privacy and security will never go away but when it comes to consumer experiences, as long as there is a fair exchange of value, your customers will largely be willing to provide the information necessary to have the kinds of interactions that they want. 

Thinking about the rewards programs that customers opt into at their favorite coffee chain or restaurant, ask yourself: why are they willing to agree to the terms? It’s because they understand that if they allow the company to know that they buy coffee every Saturday, they may be rewarded for that behavior and get a free coffee after they earn a certain number of points. The same will apply for your company if you provide a product or service that adds value to their lives and is worthy of sharing their personal information.

Where should I start?

As the world evolves and the difference between digital and physical experiences become the hybrid “phygital,” you’ll want to start by thinking about the strategy that will work best for your business. Mobiquity can help.

Mobiquity has helped some of the world’s largest brands transform their processes, making for a more successful organization, with better customer experience management, and streamlined business operations. Our clients include companies like Wawa, Kum & Go, Vomar, Nestle, Butterball, and more. View our work and then let’s chat about how together we can create a more meaningful phygital experience for your company.

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