Industry news

Digital technologies provide amazing ways for us to communicate with each other and engage with brands. But we all know that physical experiences are more engaging and memorable than digital ones - after all, major life events rarely involve us staring at a smartphone.

‘Phygital’ experiences (those that combine the physical and digital worlds) create immediacy, immersion and interaction. 2017 will an increase of the number of these projects, and the outsourcing community has the ability - through their successful delivery - to enhance customer lives and add brand value.

Why it’s important to think phygital

The communications landscape is becoming increasingly complicated for brands. How do you reach your customers, when they are operating beyond the predictable places?

The new ‘phygital’ shopper was born in the 1990s and doesn’t see a difference between the physical and the digital. They use their mobile phones to browse stock levels in the shop they’re already standing in.

So e-commerce brands need to think in the same way. It’s no longer enough to be simply ‘digital’. In fact, for savvy brands, there is no ‘digital’.

After all, the very best ‘digital’ experiences don’t occur on screen – they can now happen instore. Think of Charlotte Tilbury’s VR pods in Selfridges or YSL Beauty’s Google Glass makeup tutorials, which merge the best of the physical and the real. Augmented and virtual realities have transformed the instore experience arguably more than an extra sales assistant ever could.

And likewise, we’re now realizing the age-old brand ambition of recreating the in-store experience online. Virtual experiences like Ted Baker’s shoppable videos give customers the level of immersive experience and customer service they could expect in the real world.

Today, customers are not loyal to any channel and they expect a seamless experience – online or offline.

Navigating the traps

So, should brands be encouraged to attempt phygital experiences, no matter what their platform bias? Absolutely - but only with proper planning in place.

That’s because there are lots of pitfalls involved when you navigate the phygital. Scatter gun messaging is an obvious no-go. Instead, brands should work to understand the strengths of each platform. Mobile is the medium of convenience and browsing, for example, but more people make purchases on laptop - not forgetting that people can start journeys digitally, but finish them in-store too.

With such an inherently complicated purchase journey, marketers should embrace fluidity in their customer experience. It must be easy to move between platforms without interruption or worse, disruption. Anything that jolts the customer out of their seamless perception of the phygital will be damaging.

To do this, brands need to consider the details. Low stock levels in the real world need to be reflected quickly in the online world in order to manage disappointment and maximize customer experience, for example. What starts out as an advantage can quickly turn sour without proper connections in place.

Getting it right

But working through these issues can yield untold rewards. As the lines continue to blur between platforms, fearless brands won’t hesitate to tap into the collective power of ‘online’ and ‘instore’ to create the ultimate, uninterrupted customer experience. The old adage of a sum being greater than its collective parts holds very true here.

And fortune will favour the brave; it’s those brands who admit that traditional channel marketing may have had its day can win the e-commerce sector. Those who talk about ‘digital’ or ‘in-store’ will most likely lose.

It’s time to say goodbye to one-dimensional experience forever.

By Alastair Cole, Chief Innovation Officer at Partners Andrews Aldridge

Join the GSA and Alastair Cole at Excellence at Customer Experience on Thursday 16th February 2017

Tesco has agreed a deal to buy wholesale food supplier, Booker in a £3.7 billion deal. Booker supplies restaurants, pubs and convenience stores with a range of food items and also owns the Premier, Budgens and Londis convenience-store brands. Tesco is expanding beyond its traditional food retailing business and making strides into the restaurant and takeaway food sectors. Markets have reacted favourably to the deal, as Tesco acts to adapt to a food market with fewer weekly shops and more cash and dash consumerism. To read more, click here.

Why not check out our newsletter, click here to find out more.

A spokesman for an elite club of some 50 European industry bosses said the new industrial plan announced by Mrs May this week will do little to dampen the effect of leaving the EU. Kurt Bock, head of German chemicals giant BASF who speaks for the European industry chiefs, said, "If we're talking about an industrial policy that aims to control what should grow and what should shrink, I can't really see that having been successful in any open society." Bock said tax cuts would do little to lure investments and jobs to Britain. British finance minister Philip Hammond this month hinted at this option should Britain be denied a comprehensive trading deal with the EU after Brexit. Read more here.

Why not check out our newsletter, click here to find out more.

After the result yesterday in the supreme court, sourcingfocus.com is looking again at the impact of Brexit on the sourcing industry. John Keppel, partner and President of ISG says “While it is too soon to predict the full impact of the UK’s vote to leave the European Union, it has had minimal impact on contracting to date. The emergence of As-A-Service sourcing has given a huge boost to the UK market, with 2016 seeing a significant uplift in contract values for this type of activity, and we expect even stronger growth in this area going forward. This means that Britain is in a healthy place to deal with any macro-economic turbulence in 2017. One area that could be boosted by Brexit is public sector contracting, as governments departments address new challenges outside of Europe and look for more efficient ways to improve public services.”

UBS AG, the Swiss global financial services company, renewed its Finance Operations services contract with HCL Technologies, a leading global IT services company, announced HCL. HCL will continue to deliver key Finance Operations services to UBS AG, supporting cost transparency and continuous improvements to the operating model of its finance department for the next three and half years. HCL will further invest in developing Proof of Concepts (POC) for robotics use cases to deliver efficiency gains through the automation of mutually selected business processes within UBS AG’s Finance department. To read the full press release, click here.

An article in the Economist this week explains why Indian ITO companies need to change, adapting to market forces. The rise of RPA and AI technology and the inauguration of President Trump create headwinds for the outsourcing companies based in India. Increasingly, focus has moved towards research and development but Indian firms have a long way to go to catch up with western rivals. As globalisation is threatened, companies that built themselves off its opportunities find themselves weakened by its suppression.

Arvato has been recognised as one of the UK’s best apprentice employers by the National Apprenticeship Service. The business process outsourcing (BPO) partner, which works with several public-sector organisations and international businesses in the UK, including Renault, BMW and Slough Borough Council, has been featured in the annual Top 100 Apprenticeship Employer List. Inclusion recognises those organisations with the highest standards of excellence in employing apprentices. Debra Maxwell, CEO, CRM Solutions, Arvato UK & Ireland, said: “Apprenticeships not only provide an important route into the workplace for young people, but they deliver a fresh source of ideas and can help build up the skills sets and talent organisations need for the future.” To read about the awards, click here.

Luton Borough Council has extended its strategic partnership with Civica, a market leader in software applications, digital solutions and outsourcing, with a new ITO contract which will support the council’s drive to transform digitally and deliver continuously improved services for residents. The partnership will support Luton as it delivers a £1.5 billion investment framework package into the borough. “Civica will deliver the IT services and flexible infrastructure required for us to achieve our digital ambition to revolutionise the way that residents access services. More of our offerings will now be automated and available 24/7 online, allowing for rapid self-service. And everything is secure by design so we and our users can do so with complete peace of mind.” says Trevor Holden, Chief Executive, Luton Borough Council. To read more about Civica, click here.

After the unveiling of a new industrial strategy, focused on infrastructure, training and research and development, the government appears to be addressing a problem that has persisted in the UK economy since the financial crisis of 2007-08, low productivity growth. Ash Merchant, Fujitsu’s Director of Education comments “It’s encouraging to see the Government intends to boost STEM skills, digital skills and numeracy as well as set up specialist institutions. It’s a sign that the conversation is moving onto more granular and specific skill sets that will become more and more valuable to the UK economy in years to come. However, the challenge that will come to the fore is who will teach the students these skills?” Now that the government is making the right noises, we await action. To read more, click here.

A lot of news this morning surrounds the inauguration of President Trump and his effect on the sourcing industry. Mr Trump’s statement of ‘America first’ has put a lot of worry into major outsourcing destinations such as India and the Philippines. Nasscom (The National Association of Software and Service Companies) of India has warned Trump of the dangers of reducing outsourcing. Nasscom President R Chandrasekhar said the US lacked the high-skill workers required to keep the country’s economy “globally competitive”. To read more about the NASSCOM warning, click here.