The growth of eCommerce in recent years has become a major boon for startups. Many have quickly embraced it and went fully online. But there are also which opted for the phygital model. Let\’s take a look at what the latter model is all about and how your startup business can use it.
What Is The Phygital Business Model?
In business language, phygital is a term referring to the combination of physical and digital assets for business operation. This is different from the traditional eCommerce model in that both areas are not treated separately and instead encompass a single strategy.
For instance, while many brands have both an online and a physical store, a phygital business would treat them as a single asset. Customers can initiate their orders on the online store and then get them from a nearby branch. They can then connect back to the online store for any concerns.
The Benefits Of The Phygital Approach
As mentioned above, many startups already run physical and digital assets side by side. So you might wonder how the phygital approach would be more advantageous. But this model has several key benefits that will help you better use the two aspects to boost your business.
Better User Satisfaction
While many people start their customer journeys online, 49% still prefer the opportunity to do some of their purchases through physical stores. Phygital is an effective way of satisfying both consumer groups. Additionally, younger buyers are looking for a more unified approach for both. Using this model can also help increase their loyalty.
Better Understanding Of Customers
Both the physical and the digital realms provide a significant amount of customer data. But to have a clearer view of customer habits and preferences, you need to see the bigger picture surrounding these two. Using a phygital strategy will help you here, as you see how customers use both. This will help you build services that better cater to them.
Greater Startup Business Resilience
The COVID-19 pandemic has had a significant impact on startups, as they struggled to continue operations. While traditional eCommerce has been an effective way to remedy their needs, not every startup business has quickly adapted to it. A phygital model provides them with a more flexible means of staying in operations.
Building Your Startup Business Phygital Strategy
To better plan your startup company’s foray into the phygital business model, you need to understand how it works exactly. There are three elements that your strategy should cover, referred to as the three “Is”:
- Immediacy: The ability to quickly deliver what the customers want at the right time.
- Immersion: Customers must be able to get the experience that they are expecting.
- Interaction: There must be some form of communication between customers and brands to foster physical and emotional connections.
Of the three elements, immediacy and immersion come mainly from the digital aspect of the strategy. Customers can quickly transact using digital technology and get an immersive experience. Meanwhile, the interaction element mainly comes from the physical aspect. People would still want to physically “meet” the brand to build a stronger bond with it.
In an effective phygital strategy, brands must be able to effectively bring the three elements together. As such, you need to create physical spaces that have the technology to deliver both immediacy and interaction. At the same time, your online presence might also point customers back to that physical presence.
Laying The Groundwork
As is with any business strategy, you need to start by studying your audience. What you want to look for here is the kind of experiences your audience wants to have in both areas. For instance, if you mainly utilize eCommerce, think about what physical experiences you can introduce. On the other hand, think about what technology could enhance the customer experience in your brick and mortar shops.
Note that different customer segments interact with these two areas in different ways. Take these differences into account when developing additional services for customers.
Another point to remember is that you would want to trigger as many senses as possible. This requires a bit of creative thinking to come up with a unique sensory experience for customers. Keep in mind that people want to have a continuous experience whichever platform they are in.
Creating Your Startup Business Phygital Experience
Once you have a clear idea of the experience, start planning out how to build that experience. Here, technology plays an important role. Some of the tech that you can utilize for your phygital strategy are as follows.
Artificial intelligence
AI is useful in delivering a more personalized experience for customers. For instance, you can use it to optimize your website and show visitors the products most relevant to their preferences. On the physical side, AI can help you implement things like QR codes for facilitating cashless transactions.
Mobile Apps
Mobile applications have been one of the popular means of delivering a phygital experience to customers. An effective strategy here is using location-based notifications to send offers. These notifications are triggered on your app whenever customers visit one of your locations. This can help you direct more traffic to your physical stores.
Augmented Reality
This is another phygital technology that can be readily implemented on mobile thanks to recent advances. With AR tech, you can deliver unique engagement experiences to customers. For instance, you can create apps that would let customers visualize what they will look like with your product before they even buy it.
Live Chat
The introduction of live chat is one of the earliest examples of a move towards the phygital business model. With it, customers can talk remotely with brand representatives in real-time. And by relying on outsourcing services and automation, you can keep these live chats going even beyond your physical store’s closing hours.
Getting Some Help
One thing to note when doing a phygital strategy is that you need to effectively run both areas at the same time. A small startup business like yours might not have enough resources. But, outsourcing can be helpful here.
For instance, you can outsource the digital areas of your strategy, such as chat and other online customer-facing channels. You could also even outsource some of the physical aspects if needed. But you would want to do both strategically to maximize their cost-effectiveness.
Get Phygital And Boost Your Startup Business
Phygital isn’t just a fancy buzzword anymore. As you can see, it’s a viable strategy that will help your startup business move forward. But you should get started early to build a stronger foundation for it. And we can help you with that goal. Connect with us today.