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Analysis

Let’s Get Phygital: Finding Balance Between Both Worlds

By Andrea Villar | Tue, 08/24/2021 - 05:00

The digital transformation and new consumer habits have unleashed increasing demand for faster and tailored customer experiences. Entire industries and companies are reimagining what the consumer experience means to them, prompting them to ask themselves how to design experiences that offer the efficiency and instant gratification of the digital world while echoing the immersive sensation of a physical shop.

Despite the growing trend of digital consumerism, businesses have been challenged by customers who yearn for the face-to-face experience that comes with actually walking into a shop, seeing and touching the product they intend to purchase. The search for this balance has paved the way for the ‘phygital’ (physical and digital) experience, a compelling omnichannel approach seeking to bridge the best of both worlds.

In Mexico alone, which recorded 84.1 million internet users in 2020, 23.3 million consumers shopped for products or services online, representing a fourth of all internet users in Mexico. Almost 5.4 million Mexicans became new online consumers as a result of the pandemic when compared to 2019’s figures, INEGI data revealed in late June 2021.

Driven to venture into the digital sphere, traditional companies have been faced with a consumer that is different from what they knew before: more demanding and well-informed. According to the State of Service study developed by Salesforce, 80 percent of customers believe that the experience is just as relevant as the product or service. “Customer experience is the new frontier in business differentiation,” said Pilar García, General Manager of Salesforce Mexico, told Mexico Business. “All industries have realized that they need to improve their relationship with customers.” 

Achieving a phygital experience is not straightforward and requires focused and customized efforts for each company and industry. According to García, it is all about offering a seamless user experience from start to finish. If pleasing and better understanding the existing customer is not enough, she added, offering a smooth customer experience can further support companies in targeting and engaging newcomers. For García, the key to keeping customers loyal and satisfied lies in getting to know them inside out to anticipate what they need and proactively provide it. “Customers are becoming increasingly empowered and will look for companies that can give them a rapid and unified response. Companies that make the smartest use of their data can offer proactive propositions.” 

Free-for-All Challenge

Mexican online supermarket Jüsto has acknowledged that bridging the gap between the traditional and the online market is one of its biggest challenges. “We need to find a way to recreate the feelings that people have when they are in front of the products,” said Alejandro Sisniega, COO and Co-Founder of Jüsto. “In a traditional retailer, consumers are in front of a product that they can see, touch and react to. That can never be done with a photo or video.”

While it finds the perfect formula, the platform has decided to focus its value proposition on the shopping experience and the quality of its produce hoping that this can emulate the feeling of buying in person. “It is one of our biggest strategies to offset the experience of shopping in a physical shop,” Sisniega said.

With four more years of experience than Jüsto, Rappi is considered a senior and pioneer in e-commerce in Latin America. The Colombian company, which in recent years has ventured into different businesses with products like RappiPay, has been fine-tuning the balance between the physical and digital experience for some time now. As counterintuitive as it may sound, technology is the best ally to achieve this, said Alejandro Solís, Director General of Rappi Mexico. “Pictures need to look good; the shopping experience needs to be as seamless as possible and, above all, you need to achieve one thing: personalization.” Solís admits, however, that this comes with day-to-day challenges, including users being able to choose the ripeness of fruit and vegetables, which is not easy to achieve. 

“When you are serving a customer in a restaurant and you realize they did not like the food or received bad service, you can send them a free pitcher of beer,” said Solís. “In the digital world, that translates to how well you listen through customer service.” The platform relies on predictive models to be able to tell if a customer had a bad experience even if they do not complain, offering what the company calls reactive and proactive rewards. By compensating unhappy customers, Rappi seeks to re-engage and win them back.

As people resume their out-of-home activities, an omnichannel approach is where companies should look to achieve the phygital experience. Partnerships with high-traffic retailers are the way forward to captivate new users, said Solís.

Andrea Villar Andrea Villar Journalist and Industry Analyst