Written by: CHU Kiu Sang, Sean

To strive for publicity in today’s media environment, digital marketing seems to be the model solution. From international corporations to local NGOs, almost every organization today has its own Facebook page, and they will utilize online transactions in their daily operations.

However, is digital marketing really as effective and cheap as we imagine? Digital marketers face two major problems: Firstly, the distrust towards online information is growing regardless of its sources. Secondly, the cost performance of online advertising is constantly decreasing. On one hand, costs including platform maintenance and influencer endorsement are increasing. On the other hand, despite the variety of strategies, fewer people could be reached by digital marketing.

2 3

Because of the lower cost performance of digital marketing, it is believed that the resources that enterprises put in digital marketing will gradually decrease in the future. So how will the channels of advertisement change? The following trends can be observed.

According to researches, 60% of the younger generation likes to purchase in physical stores rather than shopping online, and nearly half of the online shoppers will visit the physical store to learn more about the products before they make their purchase. It reflects that even in the era of technology proliferation where technology is utilized frequently, experience in physical stores is still of paramount importance.

 

Source: Accenture, Focus on Gen Z: Raising the Bar for Retail

Source: Accenture, Focus on Gen Z: Raising the Bar for Retail

 

Of course, it would not make sense to advocate for a complete abandonment of digital strategies. Digital marketing has its values, but we cannot ignore the importance of real-life experience to consumers. Therefore, companies in the future may move in the direction of ‘Phygital marketing’.

Using Zara as an example, the clothing company launched a mobile app in London in 2017. By applying AR technology, customers who visited the physical store could see the virtual lifelike model walking in front of them through the mobile phone, the principle is the same as the mobile game PokemonGo. They could even view the suits worn by the movable models, find out the size and price of each dress in just a touch and a swipe. Additionally, high-speed Wi-Fi was installed to encourage customers to use this interactive software. As a result, the event attracted a large number of shoppers to play with the app and upload the videos of their in-store experience to  social media platforms. Compared with other competitors, Zara has succeeded by pulling consumers into the brand, instead of pushing its brand and product out to the buyers.

5

The reasons why such a campaign succeeded can be attributed to a change in consumers’ attitude, as they are more willing to participate in activities that interact with their physical world to reach three points: Immediacy – let things happen as expected at some moment; Immersion - make the user become a part of the experience, not only speculate from a third party perspective; Interaction – the communication with the users would generate and activate their physical and emotional part for their purchase.

Applying the above conditions to phygital marketing will make consumers feel connected with the brand and build their trust, so that consumers would be more satisfied with their experience.

 

Reference:

Abramovich, G. (2017). ADI: Brands Think They’re Delivering Better Experiences, But Consumers Disagree. Retrieved from https://www.cmo.com/adobe-digital-insights/articles/2017/3/9/adi-summit17-advertising-report.html#gs.1bodui

2018 Edelman Trust Barometer Global Report (2018). Retrieved from https://www.edelman.com/sites/g/files/aatuss191/files/2018-10/2018_Edelman_Trust_Barometer_Global_Report_FEB.pdf

Focus on Gen Z: Raising the Bar for Retail (2018). Retrieved from https://www.jcdecaux.com/blog/focus-gen-z-raising-bar-retail

Learn How A ‘Phygital’ Strategy Can Help Grow Your Business (2018). Retrieved from https://www.forbes.com/sites/sap/2018/08/13/learn-how-a-phygital-strategy-can-help-grow-your-business/#156205f2770a

Machuca, J. M. (2018). What’s Phygital in the Customer Experience?. Retrieved from https://www.wearemarketing.com/blog/whats-phygital-in-the-customer-experience.html

 

Welsh, T. J. (2018). E-Commerce Trends And Insights For Planning Your 2019 Digital Marketing Strategy. Retrieved from https://www.forbes.com/sites/forbescommunicationscouncil/2018/12/20/e-commerce-trends-and-insights-for-planning-your-2019-digital-marketing-strategy/#65d222886ac9

 

Zara’s Augmented Reality App Brings Virtual Models to Life in Stores (2018). Retrieved from https://futurestoreseast.wbresearch.com/zara-augmented-reality-app-virtual-model-strategy-ty-u