As the name suggests, ‘phygital’ is a concept that describes the blending of digital experiences with physical ones, taking the best aspects from each space to create the optimal customer experience. While digital retail offers immediacy, for instance, immersion, and speed, physical retail offers the human experience and a more sensorial experience.
How many times have you browsed items in-store, only to purchase them online for convenience- or budget-sake?
With the extensive use of smartphones, tablets and laptops, the internet of things – as well as in-store touchpoints such as kiosks and magic mirrors – customers now have different ways of interacting directly with businesses and purchasing goods. The border between the physical and the digital has blurred, and customers are increasingly navigating both worlds.
Amazon has emerged as a recognized phygital leader through their Go stores which opened doors in 2018. The shops have no cashiers, cash registers, or self-service checkout stands and instead utilize the latest computer vision, deep-learning algorithms, and sensor fusion technologies to enable shoppers to pay with their smartphones automatically via their Amazon account.
However, the trend may have already been brewing as early as 2015 and within the airport business. During that year, Amsterdam Airport Schiphol joined forces with AirCommerce and Philips (the global electronics brand) to develop a novel retail model wherein showrooming, and not selling, was the primary motive. Travellers passing through the airport were able to browse and experience Philips products in a “pop-up area.” Customer polling results concluded that the experiment was highly successful.
While duty free airport zones are ideal venues for showcasing products, offering online purchasing options to reduce travelling inventory provides airport retailers and brands with a different revenue model adept for the future.
Phygital is a natural byproduct of the digital transformation that is happening in all industries. For airports, it involves transforming established processes and services to improve their operations to deliver a better experience to all passengers and customers.
From the viewpoint of the passenger, predominantly Millennials and Generation Z, a phygital experience may just mean a more personalized and individual experience, one that also offers a seamless flow through the airport.
The challenge and opportunity for airports and airport retailers worldwide, is to safeguard and develop the commercial side of airports by evolving in step with customer expectations. This involves forging innovative business partnerships and developing new revenue streams and commercial models that embrace the digitalization of airports – including the phygital.
Many airports are embracing the phygital. Auckland Airport for instance offers a digitalized downtown shopping experience where customers can purchase tax-free products from more than 200 retailers located in the city’s actual downtown without complicated tax-refund forms. Purchased products from these retailers are automatically delivered in a single shopping basket to the airport before the passenger’s departure.
London Heathrow Airport’s mobile app allows its passengers to pre-order food and beverages, explore bands and products, and reserve and collect products found at the airport.
Another example is augmented Reality (AR), which blends the virtual with the actual to make real life more engaging and which is being used for wayfinding to help passengers navigate at the airport.
Gatwick Airport has installed AR navigation via an array of thousands of beacons across the airport that can track the location of passengers within three meters. Geolocation information can also enhance the passenger experience by offering purchasing recommendations, travel alerts and other personalized information.
Most airports very much rely on commercial, or non-aeronautical revenue, to determine their financial viability. Developing phygital experiences may help airports to develop new revenue streams that are in line with evolving passenger needs and to gain a competitive advantage.
All of this will be explored at The Trinity Forum, the world’s most influential airport commercial revenues conference, taking place this year in Doha, Qatar from 30–31 October 2019. Under the theme “Reimagining the Trinity’s role in a phygital world,” delegates will have the opportunity to delve into topics such as: reimagining the airport commercial model, demographic challenges and online competition, new shopping frontiers, and the power of the trinity partnership, among other pertinent topics.