The ‘Phygital’ Problem: Crafting the Future onto the Past

By: Chris Madden   •   email: info@trunblocked.com

In this second part of our look at the use of digital in travel retail, we turn our attention to the physical uses of digital in the modern market and ask why the current attempts are falling short.

The retail industry’s attempts to go ‘digital’ have been as wide ranging as the term itself. But enthusiasm does not always equal effectiveness, and some of the applications of digital have been somewhat hit and miss.

One need only look at the current situation in which high street retailers find themselves in, to see the dire consequences of failing to capitalise on digital in a manner which genuinely improves the lives of customers. As digital giants move more and more into the physical realm, bricks and mortar retailers must take a page out of the digital playbook – or be left behind.

And so we come to ‘phygital’, one of a series of marketing buzzwords doing the rounds today. It means the physical application of digital within the retail sphere and is the best way for stores to directly demonstrate their digital prowess to consumers.

The TR industry understands the importance of making the most of the modern digital boom. But digital applications – physical or otherwise – are futile if they are not improving the lives of shoppers or staff.

Lagardère EVP Marketing & Digital, Duty Free, Stéphanie Metz Thevenod, explains: ”We believe Digital is today a major enabler to develop business and customer satisfaction. We look at all touch points with passengers, and for us it’s a condition to maintain our appeal as a retailer.

”Digital is shaping new customer behaviour. It’s both a matter of efficiency and emotional appeal.”

MAKING DIGITAL COUNT

Her point cuts to the heart of the matter – digital is an enabler, but it must be enabling something.

”(Front of house digital) is always what falls down because it is expensive to do and there is too often no purpose,” argues Lewis Allen, Director of Environments, Portland Design.

Changi Airport's Social Tree fills a gap for tourists as they pass through
Changi Airport’s Social Tree fills a gap for tourists as they pass through

He highlights the Social Tree at Changi Airport as an example of a physical digital activation done well. The 9m installation allows travellers to share their photos and videos to its memory capsule and they are then displayed on the 64, 42 inch HD screens for others to see.

Changi Airport Group Managing Director for Airport Operations Planning and Airside, Yeo Kia Thye, explains: ”We live in a world where digital communities form part of our everyday life.

”(The Social Tree) provides a social element for our passengers to reach out to family and friends.”

”It is not a gap that needs filling, but it creates a sense of community and it humanises the moment,” Allen says. ”Is it a good thing for commercial impact? I would argue, yes.”

The sense of ‘value’ in TR must shift if the market is to keep pace with the opportunity offered by digital and its physical uses in-store. The success of such activations cannot just be measured in sales and profits, but in what Allen calls ‘new value’, such as interaction and customer engagement.

” There has to be a sense of what it is offering to the customers,” Allen continues.

”(The application of digital in a physical sense) is not always completely thought out. What benefits is it offering? Is it something that really fills the gap or is it just something to win a tender?”

In that sense the market is still at risk of paying lip service to the greatest opportunity it has.

ESCAPING THE OLD WAYS

But the issues with applying digital to the physical realm go deeper than the applications and are rooted in the stores and airports themselves. A report from Skyscanner, entitled The Future of Travel 2024, argues: ”In the near future, airports will be an intrinsic part of the vacation experience, a place that we enjoy spending time in.”

But that will require airports being built today which are up to the task of offering the digital and physical experience which customers and retailers require in the years to come. That, Allen fears, is not happening.

”We don’t want to see that same tsunami of problems come our way (as it did to the domestic market) and we haven’t prepared enough,” he explains. ”We have to understand the problem, but we are getting tenders that look too much like the past – they are still using the DNA of the past.

” We need to get this new way of thinking into the master plan. We’re trying to stuff the future into the past.”

Amazon-Go-First-Store-trunblocked

The debut of physical stores from the likes of Amazon should be a stark warning to the TR industry of both the threat and opportunity which phygital represents

Allen warns, as many others have, that if the TR market does not get its head around creating stores which genuinely meet customers’ demands, then there is a real chance an outsider will move in and do so instead.

Last year Amazon launched its first Amazon Go supermarket in Seattle, where shoppers can go in and take items from the shelves, with all payments handled automatically by the app. The digital giant has since opened eight more outlets in the US and reportedly has plans for many more worldwide by 2020. Chinese tech giant JD.com opened its first 7Fresh supermarket in 2018, too, with high-tech offerings such as intelligent trolleys which follow shoppers and display product information. While Ali Baba opened its first Hema store two years earlier, with robots, QR codes for product information and in-app purchasing.

With major digital players like these, who have already shaken retail to its core, moving into the physical space, the need for travel retail to make digital count in a way shoppers can see and feel is more pressing than ever. The industry needs to start building the shops of the future now – if it wants to be a part of it.