COVID will do for healthcare what 9/11 did for cybersecurity'
'Phygital' – the integration of digital and physical experiences in fields as diverse as shopping, banking, and medical diagnostics – allows people to enjoy the best of both worlds.
By Ariel Bulshtein Published on 12-18-2020 12:00 Last modified: 12-18-2020 07:28
'COVID will do for healthcare what 9/11 did for cybersecurity'
A patient is given an MRI scan. In future, will we be able to scan ourselves at home and get an immediate reply from the doctor? | Illustration: Getty Images
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"I'm an analog guy in a digital world," Israeli singer-songwriter Alon Oleartchik said in one of his better-known songs, expressing the concern many people feel that the physical world is fading out of our lives. The first few decades of the information revolution bolstered that concern. The more technology progressed, the more activities began taking place via computer – and later smartphones – the more the world that could be sensed seemed to be disappearing. Futurists, some happily and some less so, predicted that soon everything would be digitized.
People began waking up from the dream even before philosophers started to mourn the death of the physical world. The first people to identify the process were marketers in the US. Alongside the massive increase in online sales, they found to their surprise that customers continued to visit stores – but that they were different customers with different demands. They expected to find everything they had gotten used to online in brick and mortar shops. Shops that did not adjust to the new demands met with losses. Many closed. Stores that saw the change coming and rolled with it gave birth to the "phygital" trend – a hybrid of physical and digital elements.
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"The coronavirus pandemic that burst into our lives this past year and changed a lot in the world order, sped up the process," says Mike Kemelmakher, a veteran member of the Israeli high-tech scene and a former VP of innovation at the global firm SAP.
Shoppers now want brick and mortar stores to offer some of what they can find online (Ruth Gvili)
"On one hand, the closures, the restricted movement, and the public's fear of being in crowded places became a catalyst for the development of new solutions that could overcome a stop in the normal process of human existence. On the other, it became clear beyond all doubt that humanity would not forgo the physical world entirely and transition to an entirely digital one, even if technology allowed it," he says.
The physical world, which offers direct interaction with the environment and other people, is as vital to us as air. Over 2,000 years ago, Aristotle said that humans are naturally social animals, and he was right.
According to Kemelmakher, the phygital trend does not attempt to overcome human nature, but harness it to combine digital technology with traditional physical experiences. When the merger is smooth, success is guaranteed. Sometimes it is so successful we won't notice the phygital elements that have long since become routine. Opening locks at the press of a finger, turning on machines with a voice command, trying on clothes virtually through body measurements – all these were in wide use even before people learned the term "phygital."
Effective phygital solutions are on offer in many fields, especially those that are able to combine the accessibility and speed of a computer with an unobstructed sensory experience. Instead of closing shops, fashion brands are learning how to outfit them with digital systems. Touch screens are distributed throughout the flagship store of designer Rebecca Minkoff in New York, even in the dressing rooms, to ensure contact with the shopper and ensure immediate answers to any questions or requests – without giving up the physical elements that encourage people to buy: background music, pleasant scents, and complimentary sales staff. In similar stores in China, and even branches of fast food restaurants like KFC, facial recognition technology "design" menu suggestions for walk-in customers and tries to tailor them to their emotional and physical state.
Most people enjoy integrating their physical and digital worlds and finding a balance they enjoy. One study conducted in Spain indicates that no less than 78% of respondents intended to shop both online and in stores. Only a few customers will limit themselves to one or the other: 13% said they would restrict themselves to buying from brick and mortar stores, and 9% said they would only buy things online.
Theoretically, everything can be purchased online, but in many cases, the purchase isn't completed without a physical and emotional experience. It turns out that forming an emotional connection to a salesperson who can advise the shopper is lacking when one buys looking at a computer screen. The study also exposed another surprising data point: the age groups most interested in combining the physical and digital were the young ones – millennials and Gen Z, who have become ardent supporters of Amazon's chain of grocery stores, Amazon Go. The stores, which have opened in a few cities in the US, allow customers to scan a personal code upon entering. They then select their items, as people have for years, and finally leaves the store without having to wait to pay. The technological solutions ensure that their Amazon accounts will be debited automatically, and an itemized receipt will show up in their accounts on the site.
Amazon Go's phygital model allows the shopper to skip the physical experience of waiting in line to pay, which no one really enjoys, but allows them the enjoyable part of the physical experience – wandering among the tempting sections while being exposed to colors, tastes, and smells, as well as other shoppers.
Don't worry, banks won't disappear
There are fields that appear impervious to the phygital trend because of their inherent conservatism or objective reasons. Tourism is one. People can't be transported to an exotic beach or charming city street on the other side of the world to sample the trip for which they are making reservations. And once people are abroad, why would they need to bolster their experience digitally? Nevertheless, phygital elements are making inroads in this sector, as well, such as technology that allows tourists visiting the Old City of Jerusalem to see how archaeological remnants looked when they were part of a standing building.
There are also more signs that the banking of the future will become phygital. The number of bank branches will drop, but banks are unlikely to disappear. Branches that remain will look more like cafes or Apple stores.
Mike Kemelmakher: In the next decade, health care will change beyond recognition
The heads of Britain's Barclay's Bank tried to beat the future to the punch and has turned dozens of branches throughout the UK that were losing money into co-working spaces or even workshop venues. In addition to the repurposing, the bank continues to offer its traditional services at those branches, emphasizing the needs of small and medium-sized businesses.
In July 2020, the first phygital bank branch opened in Russia. It features three parameters: existing customers are identified biometrically and passing customers by their smartphones; a lack of typical teller stations; and a completely paperless model. The customers choose a seat where they are most comfortable (next to a coffee table, on a sofa, or on a window seat), and tellers approach them carrying wireless electronic devices. This is a deep-seated change that will alter the relationship between bank customers and their demands from the bank staff.
"If we combine the basic idea of phygital with the combination of specialized hardware, artificial intelligence, and cloud technology, we can offer solutions that will make life better and not only guarantee profits for an entrepreneur," says Kemelmakher, who has recently been focused on a new medical diagnostics initiative.
"The trend we are seeing now is leading to a reduction in medical diagnostics equipment. If we want to make it easy and common to use, and the healthcare system wants this because it saves lives and ultimately reduces national expenditure on health care, we must adjust it to the limitations of the physical world.
"What are the limitations? Picture the average community clinic in Israel, or anywhere else. First of all, it's a relatively small space, and you can't install any bombastic diagnostic equipment that requires space. There are also at least two other limitations that are hard to ignore: that workers at community clinics don't know how to operate [the equipment], and the budget of those clinics certainly doesn't cover expensive diagnostic equipment. So the way out is to develop small, inexpensive equipment that fights the physical requirements," Kemelmakher explains.
Q: How has the COVID pandemic influenced this trend?
"Dramatically. The world before COVID was controlled by concentration: we dragged ourselves to big research centers, places where there were thousands of people at one time, and were sometimes severely overburdened and overcrowded. In the post-COVID world, we won't need to go to a central institution to be tested, because most vital things will be done at home with small, inexpensive, easy-to-use equipment. The achievements of the Israeli company Nanox, which develops small smart X-ray machines for clinics and recently held a successful IPO, are a clear signpost. The entire medical infrastructure will be improved and changed unrecognizably."
Q: You're talking about an enormous change to medical infrastructure that will require a lot of money.
"It's an investment that will pay for itself both in terms of economics and health care. The primary goal of every effort is to make medicine proactive and based on early detection, rather than being based on responses to illnesses that have already developed. Of course, it will reduce the long-term costs to the healthcare system. Decentralization rather than concentration, like in physical life … Equipment linked to the cloud will send data to an expert immediately, who can sit far away from the clinic and analyze it. Second, thanks to AI the equipment will be so smart that it will be able to instruct the user and we won't need to train community nurses.
"The ramifications will be amazing: tests that have thus far been considered complicated and awkward will be easy to carry out, fast, and accurate. But the phygital innovations don't end there. In the next decade, equipment will be so easy to use that people will do all the necessary diagnostics at home. In the foreseeable future, every bit will have a medical station connected to the cloud. Medical sensors at home will replace the need to stay in a hospital to recover after surgeries. Incidentally, they've been talking about these trends for some time, and unfortunately, because of the conservatism in the medical field, they got stuck until the pandemic arrived and upended everything. The way I see it, COVID will do for medicine what 9/11 did for cybersecurity – there will be a leap forward that will be based on merging the digital and the physical."
Q: Will the digital make its way into fields that were once totally hands-on?
"No doubt, and it's already happening. The field of fitness and physical training, which was once seen as totally hands-on, is a great example. The pandemic caused gyms to close all over the world, whether because health authorities ordered it or because users didn't want to encounter other users. Either way, training equipment became smart. That integration is amazing, and thanks to it, the gym is moving into the home. How do we get over the fact that the gym has personal trainers, and the home doesn't? The phygital approach offers at least two feasible solutions.
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"The first solution allows the training equipment to train you by connecting to the cloud and to AI. It will build a training plan, follow it, and provide feedback. The second solution is for a personal trainer to keep track of your progress from a distance. The existing systems allow you to see people working out and trainers if it's important to you to be in contact with them in real-time.
"In effect, the phygital tools offer a lot more than that. The treadmill can offer you the experience of a walk-in Paris or London, and so can a home stationary bike. For example, I 'biked' through Rome without leaving the house – the simulation I did in training exactly matches the physical route that goes through the Italian capital, including mimicking the tough uphills – a 25-degree slope – that only the top athletes can climb. I can compare my performance on that route to that of other people who work out, and compete with them. This year, people even organized a virtual Tour de France race like that, which was an exact copy of the traditional race – the first phygital championship, if you will."