Phygital Marketing:

What It Is and How It Is Changing Retail

Symbiosis of the physical and digital world creates many new opportunities for marketers. Phygital marketing is a holistic, customer-centric approach to marketing. It blends the physical and digital touchpoints to create an omnichannel customer experience. 

Physical offline stores are still important. Retailers need to transform their physical locations into more integrated spaces. The main idea of «Phygital» is about using the strengths of two realities. A digital convenience to familiar human processes and a live “lamp” experience in the digital environment. It is vital to understand the importance of these two worlds. They are not antithetic; they are two dimensions of one reality.

Our 3D rendering company has prepared a comprehensive and useful article to help you learn what phygital marketing is and how it changes the retail industry. Want to keep up to date and recognize the allure of new emerging trends, as they may very well affect the not-so-near future. Let’s talk about it!

#1. The Concept of “Phygital” 

The Concept of Phygital Marketing

The world has gone digital, with consumers expecting innovative, creative, and personalized experiences. It takes time to retool old marketing approaches. How this technological revolution and consumer behavior change have affected the retail industry?

What is the Meaning of Phygital?

The term “phygital” first appeared by the guys from the Australian creative agency Momentum in 2013. Phygital is “a combination of physical and digital in a time and place.” Phygitalism has changed the way data is collected and transformed. According to the National Retail Federation, retailers can create and collect valuable customer information on physical and digital products in real-time.

Companies are embracing the concept of phygitalism by allowing consumers to interact with dynamic digital content on channels such as the Web, Smartphones, and social media to get that more personal touch. However, this also challenges retailers who want to use data for personalized reasons.

What is the Phygital Model?

“The Phygital Model” merges two worlds. Physical for trust, reliability, and human connection and Digital for data collection and analysis, making it a powerful approach. It has the power to change the 360-degree view of the current customer experience landscape. 

As a business model, this is a system in which the best technologies and practices of e- and social- commerce come together in time-honored offline stores. According to The Marist Poll, 8 out of 10 Americans shop online. However, retailers are in no hurry to close physical points of the deal but, on the contrary, open new ones. Even online stores are going offline: according to JLL, they will open more than 850 physical stores in the next five years.

While physical stores are still needed and influential, the tasks of traditional stores in this situation are changing. Retailers are shifting their focus from instant sales to interactive communications, product testing, experimentation, and unusual shopping experiences.

What is Phygital Retail? 

The idea is to construct bridges between brick-and-mortar retail stores and their virtual e-commerce and social commerce. How can businesses successfully transit onto phygital retail? Here is a look at what need to know.   

The 3Is of Phygital Retail Strategy 

Phygital retail is about making sure that online and offline stores remain synchronized. The three pillars of a successful phygital retail strategy are inbound marketing, omnichannel integration, and information architecture.

The first of the three I’s is about optimizing the customer experience. This typically includes the use of marketing automation features to use leads, get personalization and purchasing data, and increase conversion rates. For example, an inbound marketing professional might use predictive analytics to look at a customer’s past purchases, so they can personally recommend products that have been good purchases in the past.

The second of the three I’s is regarding developing front office, back office, and technology systems that make it a seamless shopping experience.  

The third the I’s is rarely incorporated into a shopping experience, yet still one of the parts of the shopping experience, but is essential in the long important to understand human behavior. It is about ensuring that all processes and systems are in place to provide a seamless experience of procedures and technologies. 

What is Phygital Marketing?

Today’s mobile hardware and software advancements are giving us more opportunities to interact with information and service providers in new and innovative ways. Phygital innovations are becoming more prevalent and almost transcendent as a way to process information. In this article, we’ll explore what phygital marketing is.

Phygital marketing is one of the newest trends in online marketing, focusing on the individual’s interaction with the company and product. It utilizes a multi-platform omnichannel approach. The power of social media led to less centralized strategies for marketing that would be more open to rapid change and testing new ideas.

What is Phygital Technology?

Digital-based innovations, such as tablets, smartphones, and wearable devices, have changed how consumers interact with brands. Phygital technologies create opportunities for consumers, retailers, and marketers that are wide-ranging and varied. But, the phygital as a concept has so far garnered less research and discussion than it deserves.

Phygital is a class of computational technologies that design and enable a system not just to store, process, and transmit data, images, sounds, or other multimedia elements. They are used to intercommunicate or customize contacts for a user, in other words, for personalization. 

Why is Phygital important?

Interaction, innovation, and speed – these 3 words define what phygital marketing is today and will continue to be as the world evolves and dictates rapid changes. Understanding the meaning of these terms is vital in regards to understanding the importance of adopting new marketing practices.

#2. Phygitalize Retail Business: Best Strategies and Practices

Strategies of Phygital Marketing

A loyal customer is the main asset of a retailer. However, the modern buyer is more disloyal than ever before. A retailer can maintain a customer for a long time if it gives him the most useful, innovative consumer experience and creates a wow effect at every point of contact – both online and offline. 

What influences loyalty more: online and offline?

The essence of marketing today is to give vivid impressions. When it comes to brand loyalty, the Holy Grail of any sales, it all comes down to how the brand presents itself. While online shopping has many benefits, it is not capable of replicating the personal experience of actually being in a store, interacting with people, and being completely immersed in a brand’s message and community. Only physical retail can cope with this task. By mixing offline and online formats, playing to the strengths of each, you can get the most out of it.

What are strategies and practices for Phygital retail?

Here are the most popular practices marketers use to implement the concept of Phygital retail.

Buy Online, Pick Up In-Store

Originally called “Click and collect”. This option combines the convenience of online shopping with an instant in-store pickup with no waiting for delivery.

Buy In-Store – We Deliver at Home

The approach, “Buy in-store – deliver at home”, assumes that the customer chooses goods in a brick-and-mortar store, but sales take place in a digital environment, and purchases are sent to customers at home. 

Reviews In-Store

User reviews are becoming an increasingly powerful tool and an important step in the sales cycle. Online product reviews can create value and move customers up the sales funnel. Do you think they don’t look at reviews on their phones when they browse your products? Make it easy for them.

Shopping Without Cash

Just Walk Out technology, which sounds like “Just walk through the store,” redefines the usual shopping experience. It was implemented in the Amazon Go store chain. The bottom line is that the person at the entrance launches the application, then simply takes the necessary goods and goes to the exit. The system, using sensors and cameras, monitors what the buyer has taken, and the application writes off the required amount.

Augmented and Virtual Reality

Use the possibilities of virtual and augmented reality to show more than everyone is used to seeing, to stand out from the competition. For example, a technology called “virtual reality store” has appeared.

This is not a typical site, but a full-fledged representative of a retail store with its trading environment in a 360° view. A person can visit a specific store from anywhere on any device – almost walk around it, look at products and even buy something. Such interaction is well remembered.

Location-Based Push Notifications

Now that everyone has smartphones in their hands, you can send various notifications through applications to specific users, for example, send a discount when a person passes by your store. Or inform customers who happen to be in your area that there are new items in the catalog or a specific product from favorites back in stock.

The Pop-Up Stores

The phygital approach provides another interesting point of acceleration – by analogy with pop-up windows on the site. You know that with their help they show a unique offer for a short time, offer current promotions, inform about discounts, or invite you to see new products. This is a proven digital tool to attract customers and increase sales from the site.

When it comes to retail, from Phygital’s point of view, you can talk about the format of pop-up stores (similar to pop-up windows). This is the name of temporary outlets that open for a short limited period, usually from a day to a month. These can be showrooms, shops, bars, and exhibitions.

These short-term retail outlets allow brands to experiment with new formats and fresh ideas, try out new locations, and ways to reach customers. And then, based on the experimental material, to analyze all the data, you will eventually offer something exceptional and unusual in the main line of business.

#3. How to Develop a Phygital Marketing Strategy

Strategy Development for Phygital Marketing

Retailers are motivating shoppers to make purchases online by reshaping their business models and engaging with shoppers in digital spaces instead of using stores and staffed counters to do the same. Phygital marketing is one of the retailers’ most significant allies in this era: it allows retailers to change how they reach and engage shoppers.

Efficiencies gained by phygital marketing have reduced the time between the consumer wanting to buy a product and the consumer purchasing the product. Retailers can now make more informed decisions about products and customer service to get them to purchase those products. 

Phygital Marketing Strategy is an umbrella term for all digital marketing techniques that use technology to reach consumers. That might include website design and development, online advertising, social media management, search engine optimization (SEO), or even video production and distribution. Any strategy or tactic uses technology to interact with customers. 

It is a must-have strategy for retailers to adopt, that allows the creation of an entirely new ecosystem that takes advantage of the main advantages of traditional and online tools. Businesses must do everything they can to shift their focus to their consumers. With the social and e-commerce industry blooming, retailers will need every tool in their arsenal.

#4. Phygital Marketing Tools

Tools of Phygital Marketing

Retailers must fully consider their product, price, and target market when planning a phygital marketing campaign. In addition, retailers must carefully select the tools and platforms they will use to implement their strategy. There are various tools and platforms best for retailers to use to implement phygital marketing strategies. Some essential solutions include the following. 

Data Mining & Analytics

These include customer segmentation, brand monitoring, lead generation, and market research.

Customer segmentation

Through customer segmentation, retailers can identify different groups of customers who will be interested in their products or services. It is possible to create targeted advertisements or marketing materials based on this information.

Brand monitoring

Monitoring the performance of a company’s brands is an essential part of effective physical marketing; By understanding which brands perform well and which do not, retailers can make the necessary adjustments to their marketing strategy.

Lead generation

Lead generation is a vital part of any marketing campaign; By targeting potential customers with relevant ads and content, retailers can bring them closer to making a purchase.

Market research

Conducting market research can help retailers understand what products or services consumers want and how they can be influenced by various factors. This information can then be used to improve customer interactions and increase sales.

Customer Data Management (CDM) 

Customer data management refers to the process of ensuring that customer information is properly recorded, monitored, and tracked. This allows retailers to better understand their customers and improve the quality of service.

Retailers should also consider tools such as loyalty programs, personalized recommendations, and in-store analytics as part of their overall marketing strategy.

Mobile Apps 

There are many mobile app marketing tools available on the market. These apps can be used to track user data, manage customer relationships and run multiple campaigns simultaneously. The most popular mobile app marketing tools include AdWords, Facebook Ads, and Google Analytics.

E-Commerce Platforms 

Retailers should consider using an e-commerce platform. These platforms allow retailers to create custom websites and stores that can be used to sell products online. The most popular e-commerce platforms are Shopify and Amazon Web Services (AWS).

Social Media 

There are several different social media platforms that can use for phygital marketing. These include but are not limited to Facebook, Twitter, and Instagram.

Facebook

Facebook is one of the most popular social media platforms in the world. It is an ideal platform for retailers to use for phygital marketing. This platform allows retailers to create pages dedicated to their products or services and build customer relationships. Additionally, Facebook offers numerous tools for lead generation and market research purposes.

Twitter

Twitter is an excellent platform for promoting quick bursts of information about products and services. Furthermore, it offers a relatively simple way for retailers to reach a large audience quickly. This platform can be used to announce new product releases, promote sales events, and share marketing materials specific to particular target markets.

Instagram

Instagram is one of the most popular social media platforms for user engagement. As such, it is an ideal platform for phygital marketing purposes. This platform allows retailers to create visual content that is accessible to share with their followers on a wide variety of devices. Additionally, Instagram enables merchants to drive traffic to their websites by featuring product shots and videos in ads.

Video Marketing 

Video marketing is a powerful tool to use to create compelling content, attract new customers, and build brand awareness. Video ads are a great way to engage consumers on the go. They can be easily embedded into website templates, billboards, interactive storefronts, or social media posts.

Interactive marketing

Interactive marketing is a type of marketing that uses digital technologies to create and deliver interactive experiences to users. This can include online surveys, quizzes, blogs, and social media interactions.

Collaborative Marketing 

Collaborative marketing is a type of marketing where businesses team up with other organizations to create synergies and improve their overall strategies. They may work together on joint projects or share resources such as customer data or market research insights.

Customer Feedback

Tools to help collect customer feedback are a critical part of any marketing communication. One option is to use online questionnaires or surveys. It allows customers to submit their thoughts anonymously, which can help get accurate data about how people feel about your product or service. However, online questionnaires can be time-consuming to set up and administer, so they may not be suitable for small businesses with limited resources.

SEO 

SEO tools and techniques will help improve a site’s ranking in search engines. These include using keywords throughout your content, creating metatags and titles that reference your target audience, using keyword-rich anchor text in links from other sites, and conducting competitive research.

Local SEO Tools:

  • Google AdWords;
  • SEOmoz;
  • Ahrefs.

Global SEO Tools:

  • SEMrush;
  • Moz.com.

Geo-Targeting 

Geographic targeting tools help reach customers more effectively. By customized sizing of marketing campaigns to be specifically relevant to certain areas, you can increase the likelihood that people in those areas will see your advertisements and products. Geographic targeting allows focusing on specific demographics (such as age, sex, and location), which can lead to increased sales.

AR\VR Shopping Apps

There are a growing number of augmented reality (AR) and virtual reality (VR) shopping apps available on various platforms. By using these apps, shoppers can explore products and learn more about them in 3D.

Science, technology, art, and business are harmoniously woven together in today’s marketing world. Phygital is an excellent confirmation of this because its popularity is growing exponentially. In a short time, phygital marketing will become a ubiquitous phenomenon, and, as always, the winners will be its pioneers.

Digital has emerged as a dominant force in the shopping experience. The evolution of technology has also changed how consumers shop. The term “phygital” captures how digital is evolving physical spaces. It is all about knowing customers and their context when interacting with—or purchasing— products and services. Personalization is key to blending online and offline to create the phygital experience. 

Learn more about CGI services for E-commerce and take your online business to the next level.

 

Phygital marketing is a strategy that combines digital, physical, and social interactions to reach consumers in their channel of choice. The digital age has revolutionized business and created a paradigm shift in e-commerce. With digital marketing, online shopping has become convenient, and promoting convenience is a prominent business strategy. Digital marketing strategies have undermined the need for physical marketing strategies and become cheaper and more effective. These developments have been a significant cause of transformation in the retail market.

We are a CGI company delivering cross-platform marketing solutions. Our 3D rendering services offer significant benefits to retailers worldwide. Contact us to start with one of the best phygital marketing technologies today!

Maria Smith

Content Writer, Copywriter

Maria is a content writer. She loves to write about visual art and technology. In her spare time from writing, she sings and creates abstract paintings.

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