Let's get 'phygital': What does the convergence of digital experiences with offline mean for brands?

Picture the scene: You're out shopping for a new outfit and trying on items in the changing room, but you need a different size. Sound familiar? Now imagine a future where you don’t have to pluck up the courage to awkwardly yell out from the changing room for help, because superimposed AR mirrors will mean you won’t need to get changed at all. Sounds cool, doesn't it?

 

Well, you may not need to imagine for much longer as so-called 'magic mirrors' or virtual fitting rooms (as they are also known) are already on the rise. Using augmented reality (AR) technology, they work by allowing shoppers to walk over to a virtual mirror where they can quickly see what the clothing looks like on them—no changing needed.

 

 

As with virtual mirrors, the blending of the physical and digital worlds to create new and immersive ways for brands to interact with their customers is one of the key reasons more and more brands are moving towards crafting a 'phygital' strategy.

 

"The phygital world provides an opportunity to bridge the physical experience with a digital one," says Scott Cullather, INVNT Group. "With the two working in partnership to bring audiences on immersive and interactive brand storytelling journeys, which are critical to cultivating the ultimate customer experience."

 

Not forgetting that one of the most significant benefits of phygital marketing, particularly with fashion and retail partners, is the ability to gain deeper insights into, and forge stronger connections with, customers. 

 

"A phygital strategy enables brands to collect valuable data from both digital and physical interactions, leading to a more nuanced understanding of customer preferences, behaviours, and needs," says Jake Lawson, strategy lead, Claxon.

 

Should every brand get 'phygital'?

 

Generating a connection between the physical and digital world to achieve better shopping experiences for customers is what musical instrument manufacturer Roland has achieved. By creating "Roland AR" technology, customers can now visit the brand's website to see how a piano would fit and look in their own living spaces. 

 

Bridging the gap between online and in-store shopping, placing virtual Roland pianos in consumers' homes, overcomes one of the biggest challenges customers face when purchasing large musical instruments, such as pianos, which is understanding how they will fit within a personal space and which colour option suits their surroundings. 

 

 

“A piano is a big investment and more than just an instrument—it is an important piece of furniture too. So, we wanted to ensure that our customers had the best tools available to make the right choice for their homes and spaces," says David Paul, Roland's global channel marketing manager. "Roland AR provides an unparalleled experience with beautiful graphics, dynamic lighting, reflections, accurate sizing, and ease-of-use."

 

But should every brand get phygital? John-Paul Williams, senior digital director, UM Australia, says the key is only implementing a phygital strategy if it offers genuine value to the customer. 

 

"There is a challenge in making a phygital activation meaningful from a consumer perspective," says Williams. "If the activation doesn't have a great answer to the question—why should I care?—then it isn't adding value. However, when done correctly they [phygital activations] move out of being an ad exposure to an experience, which consumers can share on social media, news stations report on and brand loyalty is instilled."

 

This is particularly important, as whilst phygital experiences can be fun, eye-catching or engaging, this feeling can drop off after the first use. 

 

"The sweet spot is to view phygital as more than a one-time thing, by considering how it could support the customer experience and the operational side of the business," says Lawson. "Make it work for you and your customer."

 

Meet customers where they are, and where they’re going

 

Today's younger generations are now born with smart devices in their hands, cultivating foundational codes based on engagement with ecosystems across Web3, AI, metaverses, NFTs, video games, live streams, and even nostalgic films—the digital realm is a live encyclopedia of experience and connective moments. Brands succeeding at authentic engagement are committed to meeting their customers where they are, and where they’re going—and they’re everywhere, on and offline. 

 

"Customers are investing in their digital selves more than ever, and simultaneously continue to validate our human quest for the magic of a live, in-person, moment," says Cullather. "Brands who create experiences that can offer more access points, and new blended realities will capture a spectrum of audiences across the digital maturity scale."

 

Brands that are thriving are weaving innovative storytelling strategies into phygital experiences in the realm of fashion such as Gentle Monster x Overwatch to Rimowa x RTFKT, to more everyday examples such as contactless hand palm-enabled payments at Amazon’s Whole Foods grocery stores, and at restaurants to digital kiosks at IKEA.

 

 

 

 

 

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Will digital ever completely replace the physical?

 

The pandemic accelerated the widespread and fast adoption of e-commerce. Industries became digital-first overnight. Since then, fast advancements in cutting-edge digital technologies such as virtual reality (VR) and augmented reality (AR) are bringing forth the next steps of digital transformation. 

 

In the fashion industry, the metaverse promises immersive, 3D, and interconnected virtual environments that are far more engaging and experiential than the present-day experience of online shopping in the e-commerce world. Wearing a virtual headset, customers may browse virtual stores and try on clothing in a 3D virtual fitting room to see how particular outfits will look from all angles. They can also explore entire virtual versions of themselves as avatars, accurate in measurement, likeness and fit to their physical selves down to an inch or centimeter. 

 

So, with the speed of technological advancement forcing us all to embrace a more digital lifestyle, will the digital ever fully replace physical experiences?

 

Lawson believes that it's about using digital to complement and enhance the physical, not replace it.

 

"It's unlikely that digital will completely replace physical experiences. The thrill of touching and feeling a product, the immediate gratification of a store purchase, or the social aspect of shopping with friends— these are elements that digital alone can't fully replicate."

 

"However, digital tools and platforms can greatly enhance these experiences. For example, online platforms can offer a wider range of products and sizes, while in-store digital kiosks can provide instant access to online reviews and stock information."

 

Perhaps our human existence will always require us to be tactile, physically engaging with nature and the world around us. It’s not just instinctual, it’s survival of the Darwinism variety. Sensory exploration rules our DNA—we want to see, touch, smell, and feel a product, and be given the option to stand in front of a mirror to see if the shoe fits, as we invest our hard-earned money into a brand’s products and ethos. 

 

"The physical transaction will always provide power," says Cullather. "While the phygital experience enhances consumer engagement by providing multiple interaction points throughout their journey."

 

"In today's era, where personalisation is key, a well-crafted journey that blends both physical and digital elements offers a unique adventure that is consistently appealing to audiences. Brands must challenge everything and always ask, 'where can I meet my customer next?'—build destinations not transactions."

 

What’s next for phygital? 

 

Looking ahead, the convergence of AR, VR, and AI technologies is set to redefine the boundaries of phygital experiences, making them more immersive and also more practical and effective. 

 

"AR and VR can significantly elevate the level of immersion in phygital experiences. For example, AR can bring digital elements into the physical world in real-time, enhancing the user's environment and making interactions more engaging. This could be particularly influential in retail, where customers can try products virtually in their own space or in a digitally enhanced physical store. 

 

Lawson cites the example of the travel booking process. 

 

"Imagine a scenario where customers, sitting with a qualified agent, can explore holiday destinations virtually through VR or AR. This immersive experience allows them to 'visit' places, get a feel of the environment, and make more informed choices about their destination."

 

Meanwhile, in fashion retail, AI is being used to suggest new style combinations from your own wardrobe or suggest clothes in different colours. 

 

"Imagine your favourite store giving you personalised colour recommendations, wardrobe combinations based on the event you're attending, or fitting recommendations," says Williams. "As these become more adopted—they become more effective, and we will see this become a normalised part of the consumer experience."

 

But what does ‘phygital’ mean for the advertising industry? Will it become more difficult to differentiate what’s real and what’s not? Virtually-generated ('faux') OOH advertising has been having a moment recently, with ads from the likes of Maybelline generating headlines and sparking debate around whether or not it matters if they're 'real' or not. 

 

 

"The rise of faux advertising, think Maybelline Tube Lash, has raised conversations around the vitality of real-life advertising," says Lauren Corner, strategy manager, Initiative Australia. "Phygital opens possibilities we sometimes can't conceptualise—does this mean we could see OOH partners selling augmented OOH without physically owning a billboard? Or is it just another phase? Either way it’s time to get phygital."