The unique opportunity to merge physical and digital channels and engage a target audience is termed “phygital.” So how can combining physical goods with digital content in a phygital approach bring additional revenue to a company and outpace competitors?
Over the past eight years, my company, Devar, has created a series of augmented reality (AR) products for large licensors and a range of local brands in Europe and Asia. Today, I want to share our experience in the licensing business and discuss the business opportunities I see for phygital products in the next three, five and 10 years.
Target Audience Engagement
Phygital products offer a new type of interaction with target audiences. Today, Gen Z makes up about 30% of the world’s population, and 92% of them express a high interest in using AR for shopping. I think this segment will determine the appearance of the digital ecosystem in the next 10 years.
One of the competitive advantages of using augmented reality in physical products is the expansion of the value proposition. The second advantage is the undeniable enhancement of the customer experience. We all develop affection for a brand due to the emotions it evokes in us. It’s no secret that many purchases are driven by emotions. Augmented reality enables you to create a “wow” effect and capture the consumer’s attention, making the product stand out among its counterparts.
For example, one of our clients in Germany initiated a project with augmented reality postcards a year ago. Starting with 10 postcard titles on our AR platform, the series has now expanded to 200 titles. Achieving such rapid growth and scaling by 20 times in a year within a traditional industry would be challenging without modern technology. Imagine if they had entered the greeting card market with a paper product alone.
To successfully utilize phygital, define your business goals with the technology—whether it’s attracting new audiences, increasing loyalty, extending interaction time, boosting repeat sales or more.