When Covid-19 shut down most physical businesses, they shifted their business models online with much success. There continued to be some need for offline services, though. For instance, sensitive legal documents such as contracts still had to be handled by a contract delivery service to ensure safe and swift transport into the hands of recipients.
Similarly, e-commerce relied heavily on courier services for the physical delivery of goods ordered online. E-commerce grew rapidly worldwide, from making up 16 percent of total retail sales to 19 percent, resulting in $26.7 trillion in global sales. This led to the rapid growth of the courier industry, as well.
According to research, the value of the courier market grew from 342.61 billion euros in 2019 to 375.5 billion euros in 2020 and 403.61 billion euros in 2021. This proves the undeniable relationship between physical and digital businesses in the new normal.
The Phygital Experience: Nike
The merging of physical and digital processes in a business has become such a need that the term phygital was coined. Some businesses already employed this business model ahead of their competitors.
Before the pandemic, Nike already envisioned the future and set up its Nike House of Innovation, first in Shanghai and then in New York in 2018. In 2020, it opened the third one in Paris. The physical store offers a cutting-edge use of digital apps. Shoppers only need to download the Nike app on their smartphones to maximize the store experience.
Displays have QR codes that shoppers can scan. They put in the size and color they want and add this to their virtual bag, containing everything they want to try on. The bag sends the information to the back of the store where the items are collected. The shopper indicates when they have everything and wants to go into a fitting room. The fitting room with all the items will have the shopper’s name on the door.
While inside, the shopper can still ask for a different size or color, which will be delivered to the fitting room. The shopper indicates purchases in the app, and these will be waiting at checkout. There, the shopper can pay through the app without lining up and picking up the packaged products.
The store also includes the ultimate customization for Nike shoes. At a special counter, shoppers can choose the Nike variant they want and customize everything from color combinations to the type of swoosh and laces. A lab next to the counter shows Nike staff dressed in white lab coats doing the customizations. Shoppers can have their creations in 90 minutes.
The Phygital Experience: Changi Airport
In Southeast Asia, Singapore’s Changi Airport is a model of the phygital experience. Already physically breathtaking in its beautiful design and profusion of flowers and greenery, it also spoils the consumer further with its digital offerings. For instance, even before a traveler lands in the airport, they receive customized product offerings via smartphone based on their preferences.
A product can be purchased online and picked up in-store at the airport. Other stores and restaurants are recommended, all based on their preferences, too. If the traveler is only passing through and has a flight going out, notification for boarding is also sent through their smartphone.
As people became used to shopping online during the pandemic, they will expect similar convenience when they return to physical shops. Brick-and-mortar stores must look to innovations to attract shoppers to their sites again. The merging of both allows consumers to physically touch and try products while also employing digital methods to make the entire process easier and faster.
The merger of the digital and the physical can also be used in marketing. For instance, physical stores and restaurants can send notifications with incentives like discounts to consumers that come within a certain distance. This is a powerful attraction to drop by the store or restaurant.
The insertion of QR codes in physical materials in the real world, like ads in magazines and posters, is also phygital marketing. When consumers scan the code, they are taken to a page to purchase the item immediately.
A Merged Reality
Going forward, reality will not just mean real-life physical experiences but will also include digital experiences. They will no longer be separate but complementary. The digital world will become integrated into the physical world in a collaborative relationship that enhances services to humanity. All businesses, therefore, must adapt to this model to prosper.