Maggie Lonergan, managing director of marketing services at Fortune Cookie, explains the latest buzzword, phygital, and why it's the future of digital marketing
Fact: digital marketing has grown up. Once the poor, and often misunderstood relation, it now binds together and amplifies TV, outdoor, direct marketing and PR creating an extra dimension of interaction and engagement. It also changes the historically one-directional flow in which communications have travelled along these channels. The traffic is now two-way originating from any one of these sources. Today, when it comes to true customer engagement, the term ‘phygital’ sums up where marketing is going and is set to become one of the big trends of 2012.
Phygital? What’s it all about?
Phygital is literally a morph of two words: physical and digital. It is about understanding that the next generation of successful marketing depends upon creating an ecosystem between the brand and the consumer that bridges both the physical and digital space. This is also about acknowledging that for consumers, being connected is now a natural and sub-conscious human state. Those born post 1995 do not distinguish between an offline and an online world – for them, there is no divide. The experiences and interactions blend across these spaces whether they be communicating with friends or interacting with their favourite brands.
The best of both worlds
Phygital draws on the best of both spaces, yet it still speaks to the needs we have as human beings and the physical relationships that are so important to us. For example 1-800-Flowers in the US capitalised on the fact that friends turned to Facebook to wish their friends Happy Birthday wherever they were in the world. So they took their flower ordering service to Facebook and made the tradition of sending flowers really easy and powerful. Regardless of where they were in the world, friends could each contribute one flower to a bouquet which would then be physically delivered to the birthday girl or boy wrapped in paper featuring the profile photos of all the friends who had put the bouquet together. Now that’s magic, which, prior to Facebook, would have been pretty much impossible to create in just the physical world in one day.
In the phygital world, it’s vital to ensure that your brand has a relevant presence at all touch points visited by your customers. Ensuring your brand is available in the right place at the right time is a key consideration and that’s where connecting the dots between physical and digital becomes crucial.
A good example is Xerox which has selected a dozen high traffic airports across the US to feature its ‘Ready for real business?’ campaign. Airports have high levels of footfall with people who have time on their hands, are often bored and in need of distraction – and it certainly attracted a lot of attention. The concept featured interactive billboards with customised experiences showcasing how Xerox has transformed the processes of iconic brands making them ‘ready for real business’. The campaign featured life-sized, nine-screen video displays, which you could touch to open virtual doors. For Marriott you could ‘spy’ on people in their hotel rooms or for Target ‘deliver’ mail on a motorcycle, effectively turning billboard advertising into a game. The campaign received over 34,000 direct consumer interactions within seven days of the launch.
In Korea, Tesco (known as Homeplus) has taken this one step further to provide real value-add for their customers. With significantly fewer stores than E-Mart, the market leader, Homeplus believed it could become the leading supermarket retailer without increasing the number of stores. Drawing on their research that revealed working Koreans dreaded the weekly shop, they decided to take the stores to the people rather than the other way around. Using outdoor display space on the platforms in Metro stations, they created virtual stores featuring all the products you could find at the supermarket. People waiting for their train were able to do their shopping, using their smartphones to scan in QR codes and order goods, which were then delivered after they returned home from work. Homeplus saw online shoppers increase by 76 per cent and online sales increase by 130 per cent. The brand is now the number one online retailer and a ‘very close second’ offline.
You can see how you could extend the idea in Europe where city centre supermarkets are under space pressure. They could dedicate a part of one wall to a digital shopping display – featuring for example heavy and bulky items like washing powder, tinned food and soft drinks and allow people to order and organise a home delivery at their convenience – a great way to win a greater share of wallet from shoppers just popping in to buy food for lunch or dinner that day.
What we're seeing, at last, is a genuine move beyond delivering a one-dimensional brand communication cascaded through a series of channels. Brands are now building saliency, increasing sales and market share through phygital interaction. They are creating storytelling, entertainment, fun and utility where consumers really are part of the experience itself, everywhere. Now that's exciting!