Phygital is paving the way to a new tomorrow. It has blurred the line between the physical brick and mortar and digital first approach. The term was first coined by an Australian agency called Momentum back in 2013. However, the concept of phygital stores gained popularity in 2020 owing to the global pandemic, and the world hasn’t been the same ever since. 

We’ve adapted to the new digital way of living–it’s fast, efficient and convenient. Notably, it brought about an irreversible change in consumer behavior. With the shift in the digital landscape, many brick and mortar stores and businesses have transitioned online. The findings from the Gartner survey, “2023 Board of Directors Survey: Business Strategy in an Uncertain World,” (Gartner, Inc., 6 December 2022), show that 89 percent of boards agree that they are in a post-digital world and about 60% of boards have achieved digital business optimization goals.

Whether companies in the post-pandemic world are more digitally focused or not, in either case, customer experience and empathy has to be the focal point for keeping up with customer expectations. However, despite the transitional shift towards online shopping, many customers still seek a traditional in-store experience. It immerses the consumer in the brand, sparking a sense of belongingness. The future of consumption relies on the co-existence and sustenance of physical and digital stores. It offers the ease of placing an order online and the convenience of picking it up without having to wait in line. 

As alluring as the benefits of getting phygital can appear, you might have trouble navigating the right steps. Here are three guiding questions every CEO, chief digital officer (CDO), the marketing lead and any other executive should ask themselves before going phygital.

  1. Is it relevant to our industry?

Several companies successfully operate on phygital model. Cue Clothing Co. even won the title of “Best Phygital Initiative” at the 2022 Australia Post Online Retail Industry Awards (ORIAS). Phygital model expands beyond the realms of retail and e-commerce. It has entered into several other industries, two of which are–Healthcare and Finance.

Introduction of the phygital model in the healthcare sector has empowered doctors to offer a highly-personalized patient experience, which can result in a long-lasting positive impact on their patients. Some notable benefits of phygital healthcare are extended research, quality healthcare, optimization of cost and enhanced patient experience.

Finance is another such industry where the phygital model is gaining recognition. It helps banks and financial institutions increase convenience and accessibility for customers, offer greater reach and reduce frauds. It’s now possible to gain real-time insights into customer behaviors and preferences, and use the data derived from analytics to tailor services and products to meet customer needs.

2. How can we personalise the phygital experience?

With rising customer expectations, competitive marketing strategies and a plethora of options to choose from, how do we retain customers? How do we tailor our offerings to fit their needs? The answer is empathy. We put ourselves in the customer’s shoes and personalize our services, products, and recommendations based on their preferences.

For instance, global brands such as Gucci’s interactive displays and Chanel’s AR smart mirrors in fitting rooms are great examples of successful phygital activations. Now, if we look at the various improvements in CX and tech, there’s digital ordering in restaurants, 3D product visualization, use of QR codes and personalized content & adverts through data analysis. Therefore, to create a seamless phygital experience, focus on the improvements in the field of AR/VR and artificial intelligence and learn how they work together. 

Try to draw a parallel between what your company offers and which phygital experiences would best serve your customers. To develop your own personalized service or product, you’ll need constant feedback and survey data to make decisions based on factual evidence rather than making assumptions. This brings us to our last focus area–Customer pain points and digital surveys. 

3. How do we define pain points in the customer journey?

In order to understand our customers and define their pain points, we need to treat them as individuals with varying range of emotions, stressors, and expectations. There’s a need to use customer data and digital surveys, but there’s also a need to listen to in-depth feedback, which is known as “phygital” customer research. The feedback can be from an in-person, live conversation, a virtual live conversation or a self-recording of a customer’s experience.

One of the greatest challenges for brands today is to map out the customer journey in a way that makes sense to the customers. Collecting and aggregating customer behavior data is an excellent way to help brands identify pain points along the customer journey.

Keep in mind that the core idea behind going Phygital is to create a seamless, cohesive customer experience, which is paramount to any company’s success. A hybrid approach enables the consumers to do their research, see reviews, compare prices, and state their preferences.

At the same time, they can immerse themselves in the social aspect of the in-store experience, enjoy faster returns with speedy customer support. Lastly, before shooting your shot–try to answer these guiding questions and spend time understanding the phygital landscape.

Andy MacMillan is CEO at UserTesting.