Digital transformation is rushing through all aspects of business, stirring up a storm. Hugo Hanselmann is a public speaker and expert in digital transformation, and very familiar with phygital, so Speakersbase had a little chat with him!

“Phygital” has been around since 2013, though it is unclear when it was coined. However, it has not become a huge buzzword like e.g. “digital transformation”. Perhaps odd, given how phygital is a subset of digital transformation. To put it simply, the word phygital is a merge between digital and physical. How to interpret that is entirely up to the listener (or reader). What is phygital to Hugo?

HHH: To me “phygital” is a word that can be applied to developments that were already going on for a while. It is just now becoming mainstream in a more and more connected world. We are non-stop leaving a trace of data. Online and offline we make use of digital products and services, opening up the possibility for direct engagement based on location, time, activity and person. That data can then be used to engage the person later again in an omni-channel fashion. But keeping GDPR compliance in mind! So “phygital” may be a buzzword or not, but what it stands for, will be here to stay.

The term has been used on and off in several different fields, though it has gained most traction in banking. Right now, however, it is getting more and more popular in retail. It is important to note that phygital is really a fusion between the digital and the physical. It is in no way just creating a website when you have a brick and mortar store.

To incorporate the digital in the physical, is an ongoing quest for many companies. Often used as a term to capture the way Millennials and Gen Z’ers regard the world, phygital is meant to open doors. The numbers tell us that many customers prefer to shop online, and that e-commerce grows rapidly each and every year. However, there are things that clients still prefer to buy offline, like very expensive items or fresh fruit and vegetables. But how to become more phygital?

HHH: A company can become more phygital by making it’s physical products and services digitally connected as well. By adding sensors, screens, chatbots, AI, etc. they can provide a seamless, consistent and engaging omnichannel experience. Starting with a look at the customer’s journey will already show the different touchpoints with a company. Can real-time, relevant engagement take place at these touchpoints and can data be collected? Those are the starting questions.

Phygital believes customers enjoy the perks of the digital in the physical world. Customers want to use websites that tell them if what they want to buy is in stock, they want to use apps that allow them to order online, they enjoy interactive screens in stores that help them find items. The wishes of the customers are changing, and it is up to the market to provide.

For example, while a lot of customers still prefer to buy fruit and vegetables in store, Amazon did open a web shop for fresh produce in 2018. And there are other players that foresee the change of traditionally offline stores. If companies want to stay relevant, they will need to add a digital component to their physical stores. Only a web shop is not enough, they need to create a store that is a continuation of their web shop. And any other services they offer. Whether that is an app, online shopping with home deliveries, easy access to stock information in store. How important is it to mix the digital with the physical?

HHH: When consulting I always keep phygital in mind. The lines between online and offline have blurred completely. Almost any company that is reviewing it’s customer engagement strategies, product development strategies and innovation will need to look into phygital opportunities.

To go phygital is to take charge, and to create a business that customers will love, both offline and online. So, will your company go phygital?