David is a cross country runner. While on a practice run, the soles of his shoes gave out, forcing him to need a new pair. He walks into a sports store to look for the ideal pair of shoes but finds the prices to be out of his budget. As he walks out of the store emptyhanded, he quickly fires up his phone to look for similar shoes at more affordable prices. He eventually finds the same pair he tried out at the store, at 60% off.
At the same time, on the other side of the world, Daisy spends a lazy Saturday evening browsing through clothes websites. Although she loved the variety of clothes she found, she worried whether they would fit her and if they would suit her. Luckily, the website she was searching allowed potential buyers to log in their measurements. Then, they are presented with a digital rendering showing them how the clothes would look on them, allowing them to make informed decisions.
The advents of digitization and digitalization have resulted in physical and analog systems being converted to digital. In essence, pen and paper moved to typewriters, computers, floppy disks, CD-ROMs, hard drives and now cloud systems:
- Physical books are replaced by eBooks
- Classroom-based learning is losing favor to eLearning
- Board games and card games are moving from physical to digital experiences
However, in the process of this transformation, we have realized that not everything tangible can be digitized. Clothes, food, shelter, transportation, and other physiological human needs specifically, cannot be digitized. However, experts have determined that the experience of interacting with commodities that fulfill these needs can be digitized, giving rise to the ‘Figital’ culture – a reinvention of customer experience by bringing together physical and digital experience.
The scenarios mentioned above – the experiences of David and Daisy, are examples of ‘Figital’. A concept coined by consulting firm Bain & Company, this concept is also recognized as ‘Phygital’ or ‘Digical’, and was conceptualized to firm revolutionize the retail industry.
The evolution of Retail into Figital
When people started moving into urban spaces in favor of better-paying jobs, mom-and-pop shops started emerging at every street corner to support the working class. These stores carried all the essentials. Every store was similar.
When Tom Ford revolutionized the assembly line production to lower the prices of automobiles, cars became a commodity affordable to the common man. This allowed the masses to travel far and wide for work, entertainment and even making purchases. This necessitated brick-and-mortar stores to differentiate themselves to retain existing customers.
From here, every human invention has directly affected lifestyle, significantly altering retail business. The advent of the internet continues to allow people to access everything fathomable at the click of a button. People can go for extended periods of time without having to step out of the house.
Retail, being a luxury for the most part, has been significantly affected by this revolution. Despite incomes going up, people were making fewer trips to retail outlets, simply because they didn’t have the time to spend ‘shopping’.
As a result, retail outlets, like most other industries, started to create their online presence, exhibiting their offerings in a systematic manner on their website. As more retailers created their digital footprints, they were not only competing with each other but also with marketplace platforms like Amazon. Essentially, the retail marketplace became overcrowded.
Add to this the advent of social media, and the role of the customers significantly shifted.
Understanding the ‘Figital’ Revolution
In the Digital Age, customers reign supreme – they have all the power. How? Customers in the digital age use channels such as Web, mobile and social media to consume content, engage with brands and complete transactions. These mediums have also allowed the customer to share their praise and displeasure about products and brands.
In the way that the internet and social media gave retailers a digital footprint, the same is the case with customers. The ability to track customer engagement and experience provided brands with deep insight. This has placed the customer at the centre of the value chain. As a result, many organizations have transformed the way they operate to enhance their customer experience and retain loyal customers.
However, over time, organizations realized that while customers appreciate the convenience and experience of platform-based interaction, there are certain activities and experiences that digital interaction does not afford them. This impasse has given birth to ‘Figital’.
Figital is about reinventing the customer experience lifecycle by creating seamless customer journeys that boost business and conversion rates, by bringing virtual elements into the physical experience.
The success of the Figital revolution in Retail has, in recent years, spilled over to other sectors like banking and IT as well. With ‘Figital’, the customer experience model has come a full circle – from physical to digital to the current context of an amalgamation of the two.
Some cases of Figital at play are:
- Google started its operations in the digital space with the search engine. After many years of perfecting its digital operations, Google has expanded its ecosystem into the physical space with the launch of smartphones and wearables.
- Apple has struck a fine balance between the two worlds with their products like Mac and iOS. They have also extended their offerings with iTunes and Apple stores.
- C&A Clothing started an initiative called “FashionLike” which allows consumers to give a thumbs-up to clothing items they like on their website. This reaction is embedded into the hangers in the stores, allowing customers visiting the store to consider the input while making purchase decisions.
- Sporting goods giant Adidas employs 3D printing to create running shows unique to the cushioning needs of customers’ feet. Customers run on a treadmill inside the store and instantly get a pair of custom 3D printed running shoes.
- Online fashion retailers like ASOS and AJIO incorporate augmented reality on their platforms that allow customers to see how an outfit looks on a range of body types without having to try it out at a physical store.
- Beer brand Beck’s playable posters allow customers to tap on the various shapes on the poster, resulting in musical notes, increasing customer interaction with the brand.
The Future of ‘Figital’
The Figital Revolution is proof that there are some things that will never become completely digital, because while we may enjoy the digital experience, we still crave the softer elements of human touch and interaction. However, what we have seen thus far are just experiments allowing brands to differentiate themselves and engage with the customer.
Eventually, this will become commonplace. Where today we are seeing the advent of physical elements in the digital experience, the future is about ‘DIGPHY’ – the inclusion of digital elements in physical experience. This is because, as digital becomes more embedded into our lives, we crave novelty. At the same time, human nature is such that we will always want to be able to hold, touch and feel things. Therefore, we’re even seeing digital marketplaces such as Amazon set up physical stores to enhance customer experience and interaction.
All organizations, transcending industries, are looking to capitalize on this interaction between physical and digital. Those that have mastered this strategy have proven that this presents them with a strong competitive advantage.
Do you have a Figital strategy yet?
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Published by: Nikita Madhu in Blog