Phygital marketing in the metaverse—how brands are merging digital and real-life experiences

For New York Fashion Week last month, Puma launched an experience that is equal parts physical and digital. While the experience is hosted on a standard website, visitors can interact with the brand’s Fashion Week show as if they were there in person. Moreover, digital exhibits showcase 3D sneakers, but special NFT holders can redeem their tokens for a physical pair of shoes. This effort, dubbed “Black Station,” is what marketers are referring to as a “phygital” experience—a portmanteau of digital and physical. Although the term dates back to 2007, when Chris Weil, CEO and chairman of ad agency Momentum Worldwide, coined it to describe a growing focus on digital advertising phygital has only become more relevant as the marketing industry navigates the rise of new concepts including the metaverse and Web3, all the while serving consumers’ appetite for real-life experiences. Like an omnichannel strategy, phygital marketing merges activations across disparate touch points. The physical component can be anything that harkens back to the so-called “meatspace,” such as the inclusion of physical goods or out-of-home experiences. The digital aspect lives in cyberspace, and typically leverages websites, 3D modeling, AR/VR, gaming platforms or NFTs. While brands have been especially eager as of late to experiment with digital tools, a physical-digital combo may actually be a better option than providing no physical component at all. A Harris Poll conducted in March found that most consumers worry the metaverse will make them lose touch with reality, and therefore prefer tools that harken back to the real world, such as AR/VR. Read: Consumers' metaverse worries include lost touch with reality For many brands, there’s also the issue of not taking too far a leap away from their traditional strategies. "You can't just leave [physical] behind and jump into the virtual world. So how do you bridge that gap? Connect physical and digital,” said Jeremy Cohen, head of Web3 investment at Publicis Media. Of course, phygital marketing does not need to include the metaverse at all. There exist plenty of other interfaces that incorporate digital components, many of which have been used by brands as e-commerce has become a bigger chunk of sales. But the metaverse is proving to be the fastest growing interface for phygital activations, said Justin Banon, co-founder of blockchain-based e-commerce platform Boson Protocol. "Twinning" is winning Twinning is one practice that is pushing phygital marketing in new directions. To create a “twin” essentially means crafting a digital model that reflects a physical one, or vice versa. When it comes to twinning, fashion brands have so far dominated the practice. Earlier this year, Gucci teamed with vinyl toy brand Superplastic to release physical figurines based on “SuperGucci” NFTs, and a few months later, Prada began pairing its monthly Timecapsule drops with NFT versions of the apparel. Fashion wearables like Prada’s make sense as an object to be twinned because consumers express identity both in and outside the physical world. When a consumer buys a luxury jacket in the metaverse, they’re going to feel shortchanged if they aren’t able to sport it in reality, said Banon. The inverse will also be true as long as people are spending more time in digital spaces. Web3 and metaverse marketing blog Catch up on the latest virtual experiences and more Click here Twinning can be applied to experiences as well, but in doing so the goal shifts from enabling ownership to accessibility. Only a select few hundred people were able to attend Puma’s Fashion Week show in-person, and even fewer were able to interact with the clothing itself. But the digital twin of the show opened up access to both of these experiences for anyone with an internet connection. “We wanted it to be inclusive and available for anyone to visit, experiment and see for themselves what an immersive experience could look like,” wrote Adam Petrick, chief brand officer at Puma, in an email. Puma declined to share specific data on how many people visited the website. Samsung targeted a similar focus for its own sustainability-themed fashion show held last month, wrote Michelle Crossan-Matos, chief marketing officer of Samsung U.S., in an email. The event simultaneously played out at the company’s flagship store in New York and its metaverse space in Decentraland, hence Crossan-Matos’ describing it as a “simulverse” experience. Simulverse, phygital, omniverse—regardless of the various terms that brands have used, the goal is the same: to “blur the lines” between physical and digital, Crossan-Matos wrote. Metaverse glossary Key words and terms brands should know Click here Software-enabled stores and tokenization Upstart blockchain network Solana incorporated several different kinds of digital and physical elements to create a phygital experience in late June. First, with the help of venue group Solana Spaces, the digital-native platform made its first major push into meatspace by opening a retail store in New York’s Hudson Yards shopping mall. For both crypto connoisseurs and newbies, the store puts a brick-and-mortar face to what was previously an amorphous online service. Within the store, there is an array of digital touch points, including interactive screens for exploring applications, a visualizer of real-time network usage and computer-powered photo frames for digital art. Upon entering the space, a guest feels as if they have one foot in the physical realm and the other in the digital realm. “Software is eating the world,” said Solana Spaces CEO Vibhu Norby, echoing a famous claim from venture capitalist Marc Andreesen. “And stores are being eaten too. The experience of a store today is going to be different than it was in the past.” The digital photo frames are another interface enabling a phygital experience. In Solana’s case, the frames broadcast art that is formatted as NFTs on the Solana blockchain. Galleries like this one have started popping up all over the world (including a few within several miles of Hudson Yards) as NFT art has grown in popularity. Tokenization is another phygital practice wherein physical items are reformatted into NFTs and placed on a blockchain. While similar to twinning, tokenization should specifically be used on a case-by-case basis for assets that accrue value over time and have active trading markets, said Publicis Media’s Cohen. For these types of products, such as baseball cards and vintage sneakers, provenance is important, which is why a blockchain could serve a vital purpose. They also need to be able to pass hands more readily—a process that is made easier via a digital system Boson Protocol is employing tokenization to build out its commerce objectives, such as digital-native stores and marketplaces. In March, the platform teamed with a host of brands including Tommy Hilfiger and shorts company Chubbies to launch assets on Boson Portal—its marketplace in Decentraland dedicated to buying NFTs of luxury and exclusive physical merchandise. Like Puma’s phygital activation, the experience from Boson was timed around fashion week, only this was Metaverse Fashion Week, hosted in the fashion district inside Decentraland. Maybe next year the event will be a single twinned experience.

Phygital marketing in the metaverse—how brands are merging digital and real-life experiences

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