| by Fortune Cookie

Creating a ‘phygital’ ecosystem between brands and consumers

Shopping using QR codes in KoreaShopping using QR codes in Korea

Digital marketing has grown up. It now sits not only as an equal sibling alongside TV, outdoor, direct marketing and PR; it binds together and amplifies these communication channels and disciplines, genuinely creating an extra dimension of interaction and engagement. It also changes the historically one-directional flow in which communications have travelled along these channels – it’s no longer TV then cascaded into other channels – the traffic is very much 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.

Blending experiences
Meaning the combination of the physical and digital worlds, phygital is really about understanding that the next generation of successful marketing depends upon creating an ecosystem between the brand and consumer across physical and digital spaces. Understanding that this is a symbiotic relationship, where activating the consumer as part of the activity is critical, otherwise the brand message and experience simply won’t work as well as it could or should. This is also about acknowledging that for consumers, being connected is now a natural and subconscious human state. Those born post-1995 do not distinguish an offline and online world – for them, there is no line. The experiences and interactions blend across these spaces, whether they be communicating with friends or interacting with their favourite brands.

Phygital is about drawing on the best from both these spaces and still speaking to the needs and aspirations 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 easy and powerful. Regardless of where they were, 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. Prior to Facebook, this would have been almost impossible to create in just the physical world in one day.

KLM, the Dutch airline, on the other hand has leveraged information we share publicly about ourselves in our social profiles to create a very personal connection with the airline. Tracking customer tweets and wall posts made at or about taking a flight from Schipol Airport, the KLM team finds out about the interests and destination of an individual, and then literally hunts them down in the airport before they board their flight and presents them with a small gift to make their trip extra special. KLM enjoyed over 1m tweets in under two weeks – in media terms worth far more than the investment they made, delivering real ROI and talkability in the earned media space.

Right place, right time
In the phygital world, it’s vital to ensure 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 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 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. The campaign featured life-sized, ninescreen 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 launch.

In Korea, Tesco (known as Homeplus) has taken this one step further. With significantly fewer stores than market leader E-Mart, Homeplus believed it could become the leading supermarket retailer without increasing the number of stores. Drawing on 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 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 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 part of one wall to a digital shopping display – featuring bulky items like washing powder and tinned food and allow people to order and organise home delivery at their convenience – a great way to win a greater share of wallet from shoppers.

Adidas is also doing this by introducing touch-sensitive shopping walls into their in-store experience in 2012 – intended for shops unable to stock the full catalogue of over 4,000 trainers. Using manufacturing data to create 3D models of each shoe, shoppers can spin, turn and enlarge the desired trainer and call up information about sizes, delivery, watch video testimonials and read comments from Twitter and Facebook.

What we are 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. Now that is exciting!


Industry Insights features highly accessible and practical content from experts in the marketing services sector providing you with tools and resources to improve your business performance. If you would like to submit a report to the section contact sales@thedrum.com