2020 forced us all to get phygital.

published on
December 16, 2020

The pandemic and the election took center-stage in 2020. And while it’s a year we want to put behind us, it’s also a year with lasting phygital implications. I’d like to think terms like “phygital,” “omni-channel,” and “omni-experience” will quickly be phased out and replaced by the friendlier “customer experience.” But whatever we call it, let’s acknowledge that digital and physical customer engagements should be considered together. It no longer makes sense to separate the two with different teams, at least from the strategy to concepting stages.

Retailers have launched many phygital experiences from their online shopping apps, including curbside pickup, locker pickup, in-store delivery, in-car delivery, and shop-and-scan. This means store associates need to be trained on these new ways to service customers. Store floorplans and merchandising solutions also need adjusting, not only to help customers navigate and buy in safe ways, but to allow store associates to find and fulfill orders quickly. 

These changes will have lasting implications, especially as Amazon begins to execute its phygital experience strategy, based on testing and learning from its seven different kinds of phygital stores (CNET article on Amazon Stores). So keep an eye on what Amazon does here, as it could help you determine your path forward. This is the dawn of retail-as-a-service experiences.

In 2020, we saw “virtual” popping up everywhere. Virtual meetings, virtual showrooms, virtual retail stores, virtual events, etc. This was initially a direct response to the pandemic, pushing companies that separated their online strategy from their offline strategy to start considering them together. But most companies are not built for this new consolidation. They’re either organized by sales/distribution channels, or by functions like sales, digital, e-commerce and brand marketing.

The implication here is that companies need to organize according to the customer experiences they deliver. Customers expect digital experiences to “know” them, to be easy, and to meet them where they are. They expect physical experiences to be engaging, to meet their service expectations, to be easy to navigate, and to be connected to their app. They also expect clean stores with helpful associates.

While gaining and retaining new customers requires you to think and organize phygitally, many believe the future of retail is in virtual reality stores. Kudos to those of you who have used this time to test tactics beyond your department’s typical areas of responsibility. The test-and-learn mindset used to be the mantra of those executing digital initiatives. Now it’s one we all need to reorganize around.

Another observation: hands-free experiences have reinvigorated the QR code. I remember when I was working at a digital agency back in 2010, QR codes were ridiculed for creating a cumbersome customer experience. You had to download a QR code reader app, open it up, and snap a pic of the QR code. Only then did it take you to the content you wanted.

Today, thanks to embedded QR readers, smartphone cameras can instantly recognize QR codes. They’re popping up at retail stores and restaurants, in print ads, and on packaging. And they aren’t just for getting more info anymore. Now you can make purchases using QR code payments (like Paypal’s QR Code payments options for businesses). Merchandising and packaging use QR codes to offer digital coupons that are tied to campaigns.

This simple digital-to-physical connection will only improve as QR code adoption rates continue to rise – think shoppable TV experiences that feature a QR code. Using QR codes is easy. But implementing them across a company not set up to deliver phygital experiences will be difficult.

If your company is ready to benefit from all this momentum, consider the following:

1. To determine the resources needed to offer services that wow customers, reorganize your teams around specific long-term customer experience strategies.

2. Remove digital-only teams. Start thinking about where digital tactics can be executed seamlessly, rather than digital initiatives being owned by a department.

3. Support and encourage a test-and-learn environment, with customer data informing digital and offline initiatives and tactics.

4. Develop CX strategy and concepting cross-functionally, and for long-range planning. Then seek experienced teams to implement phygital tactics.

5. Learn from  those outside your industry, such as Amazon. Keep an eye on how direct-to-consumer brands begin to physically engage with shoppers.

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