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Top 5 Insights for Phygital Operating Model

By Fahad Khan
A company's operating model is the structure and processes that govern how it generates revenue and reduces costs. A company must reinvent its operating model in order to increase revenues, lower costs, and delight customers.

Consumer behaviour has changed drastically over the years, especially post-pandemic. A few years ago, people bought products from brick-and-mortar stores or e-commerce websites. While this is still the case, the approach to selling and buying has seen a significant shift.

With things returning to normal and COVID fading from our minds rapidly, customers are indulging in the in-person shopping experience. Hence, it is crucial to craft smart and informed marketing plans to cater to evolving needs and demands.

To understand this, you need to ponder this question, "Are consumers interacting with brands physically or virtually?”. The answer is a mix of both. This gave rise to Phygital Marketing, where businesses incorporate physical and digital aspects into their operating models.

Phygital impacted selling and buying behaviour in the pre and post-covid world. If you want to level up your sales game, this article provides the top 5 vital insights by GrowthJockey regarding the Phygital experience using which you can focus on customer psychology, emotions, etc., to construct the best possible user experience.

What is the Phygital Experience?

A man holding a mobile phone in one hand and a grocery item bottle in another had. The image reflect 'A Phygital custoimer experience'

The Phygital experience combines the physical and digital experiences to produce a fusion for customer interaction. Companies quickly adjusted their strategies to meet modern needs and demands.

For example, customers order items through their phones but pick them up from stores. They use AR to test an item virtually, like makeup, before buying it. People often interact with virtual assistants before landing a call with an actual person.

To remain relevant and increase sales, all businesses have adopted the digital operating model. Some relatable examples include using your phone to look at a restaurant's menu, paying for gas without touching a payment terminal, etc.

While COVID necessitated this blending of physical and digital in the customer experience, it is here to stay for a long time.

Why is the Phygital Model the New Normal?

A person holding a phone in their hand. The phone displays a picture of a red cherry and a green kiwi andv there is a text 'PHYGITAL IS THE NEW NORMAL'

There may be a lingering question regarding the need for phygital experiences in an increasingly digital world. Achieving an end-to-end digital customer experience is vital because people are busy, working from home, etc.

Besides, brick-and-mortar stores rapidly declined when e-commerce sites took over. This accelerated when the pandemic swarmed in. But omnichannel shopping journeys are on trend in 2022. Consumers plan to use a mix of online and in-person channels for browsing and purchasing.

Many shoppers prefer brick-and-mortar stores as they can touch and interact with products. Further, when shoppers spend more time in malls, they tend to shop more because there are no deviations. For instance, while browsing products online, a phone call or someone may interrupt you.

However, when you are at a store, your senses are in tandem with the environment, and you can see everything at once to your maximum visual output. Moreover, people have craved the physical store experience, especially after the lockdown. Even though people are working from their home, many have started going out once in a while.

People are spending more time with loved ones at fancy restaurants and malls. This stems from the fact that people save time on commuting and money. Hence, the consensus is that people enjoy shopping at physical stores but dislike long queues. They look forward to interacting with a sales representative or browsing digitally.

For instance, you can place your order online after you reach a restaurant without waiting for the server or standing in a long queue for your turn. You can place your order, make the payment, grab a seat and then wait for the food. Such seamless experiences allow more people to choose to go out.

Hence, marketers are providing a digital customer experience in physical spaces.

5 insights to achieve operating model for phygital experience

Marketing revolution calls for upgrading marketing tactics. According to GrowthJockey, Strategies for the phygital operating model require emphasis on these five primary factors -

Omnichannel Phygital experience is the new norm

Since omnichannel experiences are gaining traction, there is a need to look beyond channel bifurcation. A brand's image and popularity come from a holistic understanding of the company's values and its potential customers.

For maximum success, a phygital operating model must focus on an integrated approach with cross-channel collaboration. Phygital experiences are the fusion of all things physical and digital, and focus on a dynamic system lies at the centre of smart marketing.

Consumer psychology is key to an optimised phygital marketing model

Any business has a set of ideal customers. Whether you are a B2B or B2C organisation, it is vital to focus on consumer psychology. It is the heart and soul of a phygital ecosystem. Marketing professionals study buying behaviour like active customers, time invested in browsing, trending products, etc.

A consumer's choice on various items, advertisements, etc., gives a good understanding of their inclinations. Modern businesses can then utilise these customer habits to nurture a phygital model to base their strategy. Thus, understanding consumer psychology quickly and deeply can double or triple returns.

We at GrowthJockey analyse and understand changing consumer behaviour and on this basis create marketing strategies. Doing so has helped us create multiple businesses that scale high with 10x revenue growth.

Revamping the revenue model speeds up performance

Your revenue mostly depends upon product/service quality and customer experience. To achieve desired outcomes, companies need to revamp the revenue operating model to attain a phygital mode of marketing.

Focusing on in-house training to provide a holistic and dynamic user experience marks a shift from the old to the new. For instance, brands need to train their in-store personnel to understand and operate phygital systems.

This calls for investments in technology as well as performance management. Both will have to work in harmony to improve sales instead of competing against each other.

The Phygital model requires a growth mindset with room for trial and error

Technology is changing and evolving at lightning speed. However, human beings take time to adapt and evolve to changes. An overnight shift is far from reality, as people take time to learn and grow. Unlike machines, the probability of making mistakes is higher among human beings.

This brings us to an essential aspect of the phygital world; a growth mindset fosters creativity and development. For example, a change in the company's policies or vision shakes everything from the bottom up. Strong leadership with the capacity for compromises between channels and approaches is crucial in such cases.

The phygital marketing model is a work in progress

Phygital is a work in progress because many of us are still in the transition phase. Only some companies are ready to deal head-on with the new concept of merging the physical and digital. The latest trends are sitting on the fulcrum of the phygital fusion, which is money- and technology-intensive.

However, a brand cannot wake up one day and become completely phygital the next. Gradual changes and regular adaptation are crucial to achieving balance and progress. Further, the definition of phygital experience is changing daily.

Wrapping Up

Creating a phygital strategy involves the above five essential factors to achieve a holistic and unified business model. The first and foremost focus should be on assessing your current customer experience.

Focusing on customers' challenges (pain points) is the roadmap to creating an optimised phygital experience. As a business owner or an organisation, the goal is to create different kinds of immersive engagements that customers find easy to use.

It achieves silent utility, i.e., there are hardly any consumer complaints because it is easy to understand and use. We at GrowthJockey focuss on steady and fast growth because we rely on the latest industry trends. A minimum effort to engage your brand with maximum benefit for your customers will keep them returning.

At GrowthJockey, we are fully committed to developing customised operating models that effectively address the critical challenges faced by our clients across various industries. Irrespective of your company's size, whether it's a small-scale enterprise or a large corporation, you can now benefit from our tailored solutions.
Take the decisive step towards unlocking the next level of growth for your brand by reaching out to us today!

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3rd Floor, GJPL, Time Square Building, Sushant Lok, Gurugram, 120009
Ward No. 06, Prevejabad, Sonpur Nitar Chand Wari, Sonpur, Saran, Bihar, 841101
Shreeji Tower, 3rd Floor, Guwahati, Assam, 781005
25/23, Karpaga Vinayagar Kovil St, Kandhanchanvadi Perungudi, Kancheepuram, Chennai, Tamil Nadu, 600096
19 Graham Street, Irvine, CA - 92617, US