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Let's get phygital!

Updated: Jan 23, 2021

The Quest To Your Impact Score

Digital natives (and digital immigrants) are now yesterday’s business. In 2001, when we began talking about them, a digital native was a person who had “grown up in the digital age”.

Today, 20 years on, it’s hard to think of anyone alive who hasn’t done some “growing up” in the digital age. Hell, even old Nanna Mildred next door probably owns a tablet, does her banking online, and spends half of her days on Zoom calls, eBay, and sharing rude jokes on social media.

Navigating digital technology is no longer considered a specialist skill: it’s a given. What we should be talking about – and those who have seen the future already are – is phygital natives.

Phygital is about how the digital world can be used to enhance the physical – and vice versa. The term describes a symbiotic relationship, in which the divide between the two worlds is bridged.

“The phygital experience consists in hybridizing the physical and digital components at the same time and in the same place.” ― The Phygital Shopping Experience: An Attempt at Conceptualization and Empirical Investigation[1]

By saying that something is phygital, you are saying that it can (or already does) exist in both worlds. Something that seamlessly combines both. The best illustrative example is Wade Watts and his pals in the film, “Ready Player One”. They use OASIS to become whatever they want – but they remain, physically, in the real world.

To achieve true phygitality, you need a phygital mindset. It’s not enough to just arbitrarily mix together physical and digital.

A great example of this is the hybrid journey, which the fitness industry is currently embarking on. Health club operators that offer equipment akin to the bodybuilding gyms of the 1990s in their brick and mortar facilities can’t expect to have a successful hybrid if they simply launch a digital platform offering functional fitness at home. Combining two such different experiences will feel, smell, look, and BE completely disconnected. That’s not a hybrid – and it’s certainly not phygital.

Phygital means that you can experience something in both worlds – in some cases, to the point that you’re not sure where one begins and the other one ends. Like logging on to take part in a virtual cycling class in the comfort of your home using your own indoor bike – then hooking up with the group of people you normally meet down at the gym.

“Customers have changed: They now weave their digital and physical worlds so tightly together that they can’t fathom why companies haven’t done the same.” – Darrell K. Rigby, writing in Harvard Business Review [2]

As consumers, the future phygital natives will expect phygitality to be embedded in everything they do. For example, they will expect to be identified at every point along a customer journey. Phygital natives will have no concerns that the retail/product/service provider they are interacting with will “know them”. In fact, they expect it.

We already have that in the digital world. When logging onto Amazon or any other retailer, the website will be able to tell who you are, what your preferences are, what you bought last time and what you’re likely to buy this time.

Clever retailers and brands that will thrive will be those who evolve and extend this functionality into the physical world. This is important, as physical interactions with products still play a major role in purchasing. A study of 16,000 US consumers – published in January 2020, shortly before the pandemic shitstorm – showed that the overwhelming majority (82 percent) of consumers are more likely to buy a product if they can see, hold or demo it in-person. And it has driven the culture of easy returns. Once size, quality, experience, and trust are brokered, and there is the potential of being hard-wired into eternal consumerism.

“Technology could be used to customize the in-store experience by encouraging customers to swipe their smartphones as they enter, so that their profile could then be used to tailor the experience and offers.” – Harvard Business Review [3]

Getting phygital isn’t just a concern for businesses either. To have a successful career, you’ll have to ensure you’re able to navigate, exist, and thrive in both worlds. While we’re not quite straddling Wade Watts’ mixed realities yet, we’re not far off, and there is a clear path to progress.

Wade and friends earned coins in the OASIS based on winning challenges and playing games. Essentially they banked a score. Hypothetically, this could be transferred to the world of work in terms of impact; how much measurable difference a person makes to a company.

At its most basic measure, what is the impact this person has on this project, team, or business as it relates to the overall objective? For example, what will the KPIs be in the phygital world and how will they be tracked? Will the KPIs vary from one industry to another, or will there be universal ones?

It isn’t impossible to imagine a future in which – with the help of data and a phygital landscape – businesses can use an “impact score” to assess an individual’s influence and value to a company. How much revenue do they contribute? How much innovation do they inspire? How much harmony, synergy, and forward momentum do they generate for the business?

Based on previously obtained data-points, company results, culture scores, speed to market, innovative value added, and other preferences and responses… deemed important KPIs to the business.

One thing is for sure – a phygital future will mean that data will play an even larger part in everyday life. For some, it already does.

Here are four examples of businesses and solutions that are getting phygital right...

1. Rebekka Minkoff and eBay

Rebecca Minkoff’s Soho store partnered with eBay to create a phygital fashion space. While the store is very much a traditional retail space, it innovatively implements tech – the mirrors around the shop and in the fitting rooms are actually giant, interactive touchscreens.

These “interfaces” allow you to browse clothes, call for an assistant, or even order a drink (both green tea and champagne are available – great!). The fitting rooms also connect with your phone, which adds the all-important personalization to the process.

2. Amazon Go

To visit a phygital Amazon Go store, you will need a smartphone, an Amazon account, and the Amazon Go app. You enter the store by unlocking a turnstile using a QR code on your phone and then select whatever you wish from the shelves.

Rather than pay at the end, however, you simply… walk out! Amazon’s advanced in-store tech can detect every purchased item and, with the help of some clever AI, can calculate the final price. The sum is charged on the customer’s Amazon account – or credit card – and a receipt is automatically issued. Simples!

3. Pokemon Go

It might have just been a “silly game” for many but, with Pokemon go, phygital went mainstream. Using augmented reality (AR) and GPS technology, Pokemon Go allows people to use their smartphones to locate, capture, and train virtual creatures. It was downloaded more than 500 million times worldwide in the first 12 months after its launch – showing the potential reach of the phygital solutions that capture people’s imagination.

Pokemon Go has given us all a glimpse of what a hyperconnected future, combined with AR, might look like. Significantly, it also helped confirm that phygital – rather than simply digital – really does work on a mass scale. No virtual reality (VR)-based application has ever achieved the popularity of Pokemon Go – because VR is purely digital. With AR, Pokemon Go brought the digital into the physical on an unprecedented scale.

4. US Open Tennis

The US Open Tennis Championships first introduced a phygital experience at the 2016 tournament. Fans watching the on-court action can check real-time statistics, match analysis, and score updates on an AI-backed app on their smartphones.

What’s more, the app extended their experience beyond just the sport by offering a phygital concierge service. Fans could ask questions like “where can I buy a snack?” or “where’s the closest WC to me?” and would get an immediate answer from the app, thanks to the AI and location services utilized.

So what does this all mean for businesses?

Well, for one, phygitality isn’t just “coming down the track” – it’s already here. The pandemic has, as far as digital advances are concerned, fast-forwarded us by about a decade. Digital methods of doing things are now part of everyday life – both in the professional and personal spheres.

Just consider how doing business has been transformed over the past nine months, with the rapid explosion of video conferencing, virtual workspaces, and communication/organizing platforms such as Slack. We have all had a lifestyle change and discovered new ways of living and working – it’s the phygital way, baby!

It is now up to businesses to ensure they embrace the changes and opportunities – and breathe into existence phygital practices that will benefit their operations. It could mean ditching (or spending less time) in a physical office space and, instead, setting up each worker with a home working space. Or it could mean adopting new technologies that allow satellite sites or project teams “out in the field” to have live, HD feeds back to HQ. It could also mean embracing customers in an entirely new way, using phygital solutions.

Be in no doubt: phygital has the power to transform workplace culture, as long as the entire business transitions and ensures its staff are included in the journey. It will also offer huge external opportunities for businesses – from creating everyday efficiencies and new ways of engaging customers to discovering entirely new markets.

Phygital is already here – now get out there, embrace it, and change your world!

Want to geek out on phygital – or hang out with folks who already operate here and there? Tap us below.

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