Differentiated Customer Experiences at the Cusp of Transformational Marketing
The vigorous push towards the creation of mature, diversified and future ready economies are generating an unparalleled enthusiasm for digital transformation — especially seen here in my time in the Middle East. Driven by the combination of proactive businesses and receptive consumers, it’s imperative for organizations to challenge the approach of traditional marketing models in favour of building integrated marketing campaigns, that can effortlessly bridge the physical and virtual worlds.
While have long explored the concept of integrating the digital landscape with our physical businesses, the concept of Phygital (physical plus digital) is taking things one step further — by blending physical and digital, to create unique and differentiated customer experiences.
The big word here is enrichment — of experiences, of exchanges and interaction. It’s what’s making things a whole lot different in the digital age. And in the era of the Fourth Industrial Revolution, digital technology and personal touch points with customers are merging to create the ‘Phygital’ landscape.
Customers Are Phygital And Brands Should Follow Suit
Recently, I led a marketing project for Area 2071 (the physical embodiment of the UAE Centennial 2071 Plan), which announced that it would be collaborating with SAP on innovations, to help inspire creative minds and fuel digital government. The remit was to bring about a creative interactive showcase that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates (UAE), and Ruler of Dubai, would visit.
The team and I created an immersive cube, where one walked in and was faced with synchronized screens in front, above, below and to the sides — all coordinated and aligned to tell the story of the UAE, its journey, its remarkable progress and the vision for the future and how SAP would continue to be part of that. It was an overwhelming success, mainly because it was fully immersive, the content was meaningful, and the experience was memorable.
The interesting thing is that many of the concepts we refer to have been around for discussion — many of them since the 90’s. The technologies required to fuse a digital and physical experience have been in existence for some time already — the hard part has been combining a strong use case with an experience that people actually want to have. Augmented Reality, for instance now talked about as an immersive experience, dates back to the Virtual Fixtures system developed at the U.S. Air Force’s Armstrong Laboratory in 1992. This, and other experimental systems, led to applications in the gaming industry as well as other entertainment experiences. What differentiated these emerging commercial applications, including augmented reality, is a focus on customer experience enhancement.
As early as in 2015, a Microsoft Digital Trends report found that nearly 50 percent of consumers were more likely to engage with digital experiences that offered seamless integration with their physical world — signalling a shift in how consumers expect the physical and digital worlds to blend.
Consumers with smartphones have already become accustomed to supplementing normal life experiences with digital content. Phygital marketing therefore represents the next logical step. Enterprises and brands addressing these behaviours effectively stand to gain considerable ground on competitors ignoring the opportunity to address their target audience with immersive phygital experiences.
A notable example is when retail giant Lowe decided to test robots at its Bay Area stores or when Amazon employed drones- it became emblematic of how retailers coped with competition. While E-commerce is a robustly growing segment of retail, physical stores still account for a sizable portion of total retail sales. If multi-channel retailers can mesh the best of e-commerce and brick-and-mortar retail, the thinking is that they can fend off pure-play e-tailers by getting customers to love coming back to the stores again.
A Dovetail Of Challenges And Opportunities
It’s really a win-win for both worlds. Phygital components can provide more personalized experiences to customers resulting in increased in-store visits, enhanced loyalty, customer engagement and a greater share of wallets. Add into this mix, M-commerce and the increasing use of mobiles, and the success of apps such as Pokémon Go — where the search for digital creatures in the physical world thrives — the need to constantly adapt is mounting.
Content Is At The Centre Of Phygital
I believe that content strategies will make or break Phygital goals because when building such marketing experiences, the outreach needs to be useful as well as highly engaging. This was seen clearly in the Area 2071 project I mentioned. The ultimate Phygital strategy would be one that combines entertainment, data and content. And this is where User-Generated Content (UGC) becomes pivotal to the content strategy.
User-generated content on Facebook has shown to generate conversions that are 40% higher than the industry average. Increasingly for big purchases, people often showroom the item, then read reviews and make their purchase later online, while smaller buying decisions are almost always based on user reviews.
Let’s take the example of Lowe’s OSHbots, where Lowe’s Innovation Labs partnered with Silicon Valley based Fellow Robots to introduce autonomous retail service robots to amplify the shopping experience for customers. The OSHbot retail service robots were installed in the midtown San Jose Orchard Supply Hardware store and greeted customers as they arrived. Customers could tell the bot what they were looking for or just hold up an item for it to scan and then it navigated them to the product. The bot also helped store employees with inventory scanning — the groundbreaking ultimate store helper model.
Now, what if these bots were used to deliver a stream of curated user reviews that can help with decision-making in-store? People use their smartphones to evaluate purchase in-store, so why not increase the chances they will buy?
Content can provide entertainment value, collect actionable data and even help customers with decision-making. The most compelling digitally delivered content is still created in the physical. From social tools such as Instagram and Snapchat, where the capture of the instant is physical, to QR codes on ads, on concert tickets, or on boarding passes, to enable the physical to lead to the digital.
The future is about creating unforgettable and invaluable experiences. At a time where digital, physical, customer experience and the advancement of technologies such as AR are merging into one — it’s an exciting time to be a marketer.
