“We are empowering customers digitally through automation, but many still feel more comfortable talking to a person than a bot.”
― Aileen Burgos of Globe Telecom in an interview with the CMO Council
I do not like the term “phygital.” And not just because the word itself is unappealing to me personally — somehow invoking thoughts of nails on a chalkboard. I dislike it in a marketing or customer experience context because in many instances it is being used as a buzzword to refer to the hybrid digital/physical customer engagement model. A model that is rapidly becoming the cornerstone of customer experience.
On the surface, this shouldn’t be an issue considering that most shorthand definitions of phygital begin with a melding of the physical and digital worlds. It’s when you dig deeper into how phygital is being applied that the problems surface. In far too many instances, you encounter definitions like this:
“However, as the retail companies that have adopted this technique have underlined, the ‘real’ application of a phygital structure is that of enhancing the engagement of the consumers thanks to the introduction of digital technologies inside traditional physical spaces.”
“Phygital is governed by the three “I’s:” Immediacy, Immersion and Interaction. The first two “I’s,” immediacy and immersion, come from the digital realm, while the final “I,” interaction, comes from the physical realm.”
Or even this, from TechTarget:
“Phygital (physical plus digital) is a marketing term that describes blending digital experiences with physical ones. As the channels of customer interaction and communication proliferate, companies aim to make combining these channels frictionless and seamless, enabling a customer to make a phone call, then communicate in a social media platform, then send an email, without the company losing the thread of the communication or a sense of the customer issues associated with the customer account record.”
Inside True Hybrid Digital/Physical Customer Experience
While the first two may indeed be valid definitions of phygital, they are definitely not synonymous with a true hybrid digital/physical customer experience. Both indicate that the interaction must take place in the physical environment, an interpretation that is too narrow when looking at hybrid experiences. It is true that early hybrid experiences would fall under the current definitions of phygital. Remember circa 2014 when Target introduced the ability to build a digital shopping list and the app would navigate the shopper expediently around the store, fulfilling that list in a logical order? Phygital.
Brands have been working at this for some time now, and hybrid experiences today must encompass a wide variety of activities where the “interaction” can take place in either realm. Activities such as order online — pick up curbside, telemedicine that incorporates wearable devices to monitor health statistics, try before you buy with AR/VR from your home, video chats with brand sponsored focus groups and even having embedded sensors transmit signals that warn remote dispatchers about impending equipment failures — these are all valid hybrid experiences, and not all take place in a physical channel.
The TechTarget definition for phygital gets closer to hybrid because the goal is to blend digital and physical experiences as seamlessly as possible. However, its example is not so much hybrid as omnichannel where the aim is to connect activity across channels rather than to blend digital and physical channels in a single interaction. Not that omnichannel isn’t a worthwhile goal — it certainly is. Hybrid just has a higher magnitude of difficulty than plain omnichannel.
Related Article: 3 Questions Customer Experience Professionals Should Ask About Phygital
Fancy Neologisms Aside — Details Matter
Why are these definitional differences important?
Precisely because hybrid is not new, and expectations reflect this. It may have started with those early retail geofencing experiences, but it has evolved in scope and sophistication well beyond them. Customers today want expansive hybrid experiences, not just the narrow phygital interpretations highlighted in the definitions. And these expectations are not going away.
In the SAS Experience 2030 Pulse survey, taken during the height of the pandemic, consumers were starting to lean into hybrid with more than half indicating preferences for hybrid experiences of the type described above. Brands also recognized the staying power of the emerging hybrid digital/physical engagement model with 76% saying that they thought hybrid was here to stay and 83% saying that they were rethinking how to deliver superior customer experiences because of this. That was several years ago.
It has not changed. If anything, demand by consumers has increased significantly and brands have also continued to lean in. In a recent study, Cracking Tomorrow’s CX Code, 71% of consumers told the CMO Council that they want a blend of both physical and digital channels and two in three marketing leaders indicated it’s very important, even extremely important, to deliver hybrid CX to increase personalization, innovation and customer engagement.
Brands are working on it — 60% said that the digital customer journey has dramatically changed their CX strategy. Unfortunately, it is not easy and delivering purely phygital versus real hybrid will not cut it for consumers. When the CMO Council asked consumers how well brands are doing in delivering a seamless hybrid experience — the result was not encouraging — with more than half saying brands were doing moderately or worse.
Digging a little deeper — when the CMO Council asked brands about how mature their hybrid model was — less than one in five selected mature — and when they asked the same thing for digital infrastructure (which goes hand-in-hand with the ability to provide hybrid experiences) less than one in seven felt they were mature.
What this tells me is that maybe the rapid transformation to digital caught many brands by surprise and to cope they applied a kind of digital Band-Aid. Perhaps digital was approached on a channel-by-channel basis, shoring up or adding capabilities to the channels where demand was highest — or to those that were the most broken rather than using a holistic enterprise-wide strategy to connect these channels and provide true hybrid experiences.
Related Article: Get Phygital and Tone Your Customer Experience
Ripping Off the Digital Band-Aid
I think that what the CMO Council survey results are telling us is that those quick fixes are not aging well. It is clear that both brands and consumers realize that hybrid is not going away. A few tips to consider when getting started:
- Re-invoke the VoC: While I am a strong proponent for hybrid, it can fall prey to bright shiny object syndrome. In addition to surfacing the failings for brands around hybrid, the CMO Council survey also found that there is a pretty significant mismatch between what customers value and what brands believe constitutes loyalty (more on that later). The best way to determine which hybrid experiences will work for you is to ask your customers.
- Modernize those journey maps: Chances are that many journey maps were constructed before the hybrid experience was as entrenched as it is today. It may be time to dust off those old tomes and see where hybrid fits.
- Walk the privacy tightrope: Digital brings a perfect storm of balancing the need for real-time activity data with increasing privacy regulations and restrictions (imposed by both governments and tech companies). Privacy considerations must have a seat at the table when looking at holistic hybrid strategies.
- Lastly, don’t hesitate to get phygital: But with a strong digital bent.
Now is the time to divert from Band-Aids to more holistic strategies that will stand up to the demands of a hybrid digital/physical engagement model.
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