Is 'Phygital' the Future of CX?

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In the pre-digital era, customer experience (CX) focused on providing exceptional in-store experiences, with brands investing heavily in store design, merchandising, and customer service. Over the past decade, CX has become an even more critical differentiator for businesses across many industries. Today’s customers expect personalization, convenience, and flexibility throughout their journeys with brands.

But while digital tools have seriously upgraded how we shop, physical experiences haven’t lost value. Brands need to cater to both environments and are migrating toward CX strategies that provide an integrated customer journey across physical and digital touchpoints, creating a "phygital" presence.

Key Ingredients of Phygital CX

Phygital CX combines the best of both worlds. It leverages the combined strengths of the physical and the digital to create immersive and engaging customer experiences.

“Phygital” captures something distinct: the integrated meeting point between physical and digital. But lately, it’s also become a bit of a buzzword. What makes phygital experiences a beacon for customers and brands looking to design a CX that builds long-term customer loyalty? Here are three cornerstone aspects of phygital CX.

Omnichannel integration. While it’s a bit of a mouthful, “omnichannel integration” is simply about creating a unified shopping experience. It allows customers to start shopping on one device and finish on another. Phygital CX takes omnichannel integration to the next level by allowing customers to browse products online and try them in-store using a virtual try-on experience. With their shopping history seamlessly integrated across physical and digital channels, customers can finalize purchases in-store or online at their convenience.

On the customer support side, omnichannel phygital CX can be supplemented by conversational AI, which uses voice recognition and messaging to help customers resolve issues without requiring a human agent.

In-store digital experiences. Phygital CX enables in-store navigation through mobile apps, guiding customers through the physical store, helping them locate products, and providing real-time information on inventory and promotions.

Even brands that gained their initial footing online have come to understand the high value of physical locations. For instance, Allbirds started out selling shoes exclusively online but now has stores around the globe, with more on the way. Brands can integrate digital technologies into physical stores to enhance CX in several ways, like mobile point-of-sale systems or virtual reality screens, for instance. Brands can use mobile devices such as smartphones and tablets to process transactions from anywhere in the store. This flexibility makes it more convenient for customers to make purchases. Brands can also offer intelligent virtual agents (IVAs) via phone or mobile apps to provide customers with instant assistance and support while they shop. IVAs help customers find products, answer questions, access promotions, and even make purchases.

Personalized customer journeys. With phygital CX, brands can collect customer data from both physical and digital channels and use that information to create more personalized shopping experiences. For example, someone who frequents Starbucks and has location services enabled on their phone can receive a push notification about ordering their favorite beverage when they’re within a certain distance of a Starbucks.

When a customer needs help along their shopping and purchase journey, conversational AI can provide personalized support and recommend the next best actions. Customers can access conversational AI tools like IVAs through a brand’s mobile app or an onsite device. By delivering personalized recommendations in real time, brands can lay the foundation for higher conversion rates and increased loyalty.

What It Takes to Go All in on Phygital CX

As brands strategize about going all in on phygital CX, there are several elements worthy of close consideration.

First, develop a clear understanding of customer needs. Whether you’re designing a product or building a brand, it all starts with understanding your customers and their goals. This information is a prerequisite to designing experiences that are relevant and engaging.

Second, invest in the needed technology. Successful phygital CX depends upon it. You can’t offer consumers integrated physical and digital experiences on the front end if you don’t have the capabilities needed to support them on the back end. Digital displays, mobile apps, mixed reality experiences, integrated AI tools—all of these are valuable resources in the phygital CX toolbelt.

Third, build a seamless customer journey. One of the biggest challenges in phygital CX is ensuring your physical and digital experiences fit together for customers. If your brand’s phygital experience offers customers a quick trip with a clean arc and a clear payoff, they will come along for the ride.

Next, ensure inclusivity. Phygital CX should be accessible for all customers, including those with disabilities or who may not be tech savvy. This philosophy of inclusivity means designing, testing, and tweaking phygital experiences until they are user-friendly for a full range of consumers.

Finally, monitor results, measure success, and adapt to what works. Because phygital CX initiatives that employ AI and machine learning can track factors like customer satisfaction and engagement, they can iterate and improve over time. When customers need support at any point on their phygital CX journey, conversational AI provides personalized responses, no matter the time of day or night.  

By considering these essential elements before going all in on phygital, companies can develop an actionable phygital CX strategy that yields engaging results, generates return customers, and builds long-term brand loyalty.

Rebecca Jones is general manager of Mosaicx. In her career of more than 25 years, she has held a broad range of operations executive roles focused on growing businesses, people, and profit margins. She also serves as a member of the board for the Families for Effective Autism Treatment (FEAT) of Louisville, Kentucky.

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