Broadening the phygital experience: a scoping review of value creation for service actors

There has been a significant increase in studies on phygital experiences in recent years (Mele et al., 2021; Del Vecchio et al., 2023). This growth partly reflects the disruption caused by COVID-19 across service industries, which accelerated the integration of physical and digital interactions and repositioned consumers and employees within hybrid environments (Schwab, 2024; Whittaker et al., 2023).

Phygital refers to the fusion of physical and digital worlds, conceptualised as “a holistic and integrative ecosystem” that combines physical, human and digital elements from a consumer standpoint (Batat, 2024, p. 229). These experiences are driven by technological innovation and are reshaping both consumer and employee roles. Consumer-facing examples include Amazon Go stores, where purchases occur without checkout through sensor- and AI-enabled tracking, and the IKEA app, which allows users to visualise furniture within their homes. Employee-facing applications include the use of self-service kiosks in hotels and blended learning systems in education, which require staff to operate across both physical and digital interfaces (Cannon et al., 2023).

These developments illustrate a broader shift towards more integrated physical–digital service environments. Scholars and industry commentators suggest that the future of services is increasingly phygital (Testa and Slaton, 2025), as the boundaries between physical and digital environments continue to blur (Orazi and Nyilasy, 2025). In response, the phygital service research (PSR) paradigm has been introduced to ensure that multi-actor perspectives are incorporated and to reinforce a human-centred approach to service design (Batat, 2026).

The rapid growth of phygital literature and the resulting fragmentation are key motivations for this study. Based on a scoping review of phygital research from 2014 to 2025, we map the current state of the literature to identify existing gaps and discuss future research directions from a human-centred perspective, thereby helping to guide the development of the PSR paradigm (Batat, 2026). This provides an empirical foundation for highlighting both the positive and negative effects of phygital experiences for markets, organisations and society (Batat, 2022; Gustafsson et al., 2024). In doing so, the study aims not only to consolidate the fragmented literature in this area but also to respond to calls for more holistic perspectives in both theorising and empirical research on phygital experiences (Batat, 2026). This includes adopting multi-actor perspectives that consider both consumers and employees, as well as recognising the dual potential of phygital services to create and destroy value. Such an approach aligns with the broader service literature, which has identified similar limitations and called for more integrated research (Plé and Chumpitaz Cáceres, 2010; Chen et al., 2023).

In adopting this approach, this research advances key principles of the PSR paradigm, which emphasises that value creation in phygital ecosystems is inherently “poly-created” and should be understood from multiple actor perspectives, including consumers and employees (Batat, 2026). In service literature, actors, defined as individuals or groups such as organisations, participate in exchange processes through distinct roles and functions (Vargo and Lusch, 2014; Brodie et al., 2019), with scholars consistently stressing the importance of multiple viewpoints. However, phygital research has largely examined consumers and employees in isolation, rather than in tandem, which runs counter to PSR’s principle of human-first centricity (Batat, 2026).

Moreover, studies focusing on different actors tend to emphasise different dimensions of phygital experiences. Consumer-focused research highlights engagement and enjoyment in hybrid experiences (Banik and Gao, 2023), whereas organisational perspectives emphasise how hybrid environments reshape employee roles (Xu et al., 2023; Lo et al., 2024). Yet the extent to which both actor groups are examined simultaneously remains unclear, despite evidence that value is co-created through interactions between consumer and employee experiences at the core of service delivery (Gustafsson et al., 2024). Parallel perspectives within PSR similarly position such integrated perspectives as fundamental (Batat, 2026). Consistent with calls to better understand both consumer and employee experiences (Batat, 2022; Gustafsson et al., 2024), our first research question is:

Secondly, phygital experiences are inherently ambivalent. This research examines this duality and contributes to PSR’s principle of phygitalisation for positive impact (Batat, 2026) by extending it to show how phygital experiences can both create and destroy value for consumers and employees alike by generating positive emotions and efficiency gains, but also frustration and social disconnection (Zhang et al., 2018; Nadeem et al., 2025; Song et al., 2025). To better capture these contrasting dynamics, service scholars have drawn on the consumption value theory framework, which encompasses emotional, social, functional and epistemic dimensions (Zainuddin and Gordon, 2020; Sheth et al., 1991). This framework guides the present research in examining the types of value that are both created and destroyed. Research shows that both the multidimensionality of value and the duality of its creation and destruction can, for instance, occur in augmented reality service marketing (Nadeem et al., 2025) and in interactions with humanoid service robots in apparel retail settings (Song et al., 2025).

Although the service literature acknowledges the coexistence of value creation and destruction (Zhang et al., 2018), its specific relevance to phygital contexts remains underexplored. This gap underscores the importance of adopting a multi-actor perspective, as phygital experiences may create value for one group while simultaneously destroying it for another. For instance, integrating self-service technologies into physical servicescapes may generate functional value for employees by freeing them to focus on other tasks. Yet for some consumers, these same technologies can diminish functional value, particularly when technical issues arise or when personalised service or modifications are required. Despite this, the multidimensional nature of value and the inherent tensions between its creation and destruction across different service actors are not yet systematically captured or synthesised within the phygital literature. Therefore, our second research question is:

Thirdly, as phygital experiences become more prevalent, the likelihood of unique blends of physical and digital interactions grows, consistent with PSR’s third principle of multimodal integration and continuity (Batat, 2026). One way to understand the variations of these unique blends of physical and digital inherent to phygital experiences is the reality–virtuality continuum originally conceptualised by Milgram and Kishino (1994) and subsequently shown to be highly relevant to contemporary experiences that integrate these elements (Dodds et al., 2022; Flavián et al., 2019). A key contribution of this framework to phygital scholarship lies in its conceptualisation of a continuum along which digital content integrates with the physical world (and vice versa) (Dodds et al., 2022). Critically, for phygital scholarship it considers both augmented reality, where the physical world is enhanced with digital elements and augmented virtuality, where the virtual world is enhanced with physical elements (Flavián et al., 2019). Situating phygital scholarship and PSR along this continuum offers a way of clarifying the type of physical–digital integration under examination, enabling a more precise understanding of where along the reality–virtuality continuum existing research is positioned and where further contributions are needed.

However, to date, reviews of phygital experiences (Del Vecchio, et al., 2023; Lo et al., 2024; Mele et al., 2023; Mele and Russo-Spena, 2025) have not located or described studies in relation to this continuum. As a result, while these reviews remain informative, they provide limited direction regarding the degree of physical–digital integration examined in prior work and where nascent or underexplored areas may warrant future scholarly attention. The third research question guiding this review is:

The contribution of our study is fourfold: firstly, we broaden the phygital perspective by systematically integrating both consumer and employee experiences, clarifying their respective roles in value co-creation. Secondly, we emphasise the dual potential of phygital experiences to create and destroy value through the consumption-value theory lens (Sheth et al., 1991; Whittaker et al., 2023), drawing attention to value destruction as a critical yet underexplored area for future research. Thirdly, we advance the field by examining the interplay between physical and digital elements through the reality–virtuality continuum (Milgram and Kishino, 1994; Flavián et al., 2019), highlighting the research focus on augmented reality versus augmented virtuality. Fourthly, the review highlights the limited and fragmented use of theory in phygital research, foregrounding the need for greater theoretical integration of theory in future phygital scholarship to advance the field.

The remainder of this study is structured as follows. Firstly, we provide a brief overview of phygital, its evolution, definitions, core principles and relevance to this review. We then synthesise prior literature reviews to highlight the distinct contribution of our review. Next, we outline the scoping review methodology, including the search strategy, selection criteria and analysis steps. The results section presents descriptive findings, followed by insights on our three research questions: actor perspectives, value dimensions (creation and destruction) and positioning along the reality–virtuality continuum. Finally, we discuss theoretical implications and outline priorities for future research.

The term phygital began to appear more systematically around 2007 (Del Vecchio et al., 2023), yet a clear, unified definition remains lacking (Batat, 2024). This ambiguity stems partly from competing interpretations and overlaps with related concepts such as omnichannel retailing. Whereas omnichannel retailing involves distinct physical and digital touchpoints across the customer journey, phygital emphasises their simultaneous, seamless integration within a single interaction. Despite varied usage, the literature highlights several recurring principles:

• integration of physical and digital components;

• seamlessness;

• impact on user experience;

• holistic framing of interaction; and

• potential for both value creation and destruction.

It is this complexity related to definitional divergence and the multi-dimensional nature of phygital experiences, which necessitates a robust theoretical framework. PSR is a recently introduced paradigm that advances service scholars’ understanding of phygital contexts (Batat, 2026). It differs from other paradigms such as foundational service research and transformative service research (TSR), which often treat physical and digital domains as distinct. In contrast, PSR focuses on their convergence, rather than separation (Batat, 2026). As such, it provides a framework for understanding service experiences in hybrid “phygital” settings, encompassing the integration of physical, digital and virtual interactions within complex human–technology ecosystems.

Building on this perspective, our study is guided by and contributes to three of PSR’s six key principles: human-first centricity, phygitalisation for positive impact and multimodal integration and continuity (Batat, 2026). These principles are reflected throughout our analysis: human-first centricity is evident in our attention to both consumer and employee experiences; phygitalisation for positive impact is addressed through our examination of how phygital interactions can generate both value creation and value loss; and multimodal integration and continuity is captured through our focus on how physical, digital and virtual elements are combined across contexts.

Within this framing, phygital can be understood as an umbrella construct encompassing augmented reality, augmented virtuality (along the reality–virtuality continuum) and broader immersive environments such as the metaverse, each representing distinct ways of blending physical and digital environments, aligning with phygital’s core logic (Mele et al., 2024; Sprott et al., 2025). These modalities reinforce PSR’s principle of multimodal integration and continuity (Batat, 2026), while simultaneously raising questions of human-first centricity, given different actors groups engage with these modalities in distinct ways and of phygitalisation for positive impact, as each modality carries the potential for value creation and destruction. The reality–virtuality continuum (Milgram and Kishino, 1994; Flavián et al., 2019) further enriches PSR by providing a means to classify and explain how phygital experiences are positioned along and transition between, physical and digital settings.

From an organisational perspective, phygital also extends to employee experiences (Gustafsson et al., 2026). Hybrid work environments require employees to navigate and integrate physical spaces (e.g. offices, meeting rooms) with digital tools and platforms (e.g. Zoom, Microsoft Teams, cloud systems), producing inherently phygital work experiences (Adikesavan and Ramasubramanian, 2025; Lo et al., 2024) that reflect PSR’s principle of multimodal integration and continuity. Remote and home-based work similarly combines physical settings with digital infrastructures, further illustrating this integration. These hybrid environments also embody phygitalisation for positive impact, as they offer flexibility and connectivity while simultaneously introducing challenges such as social disconnection and digital fatigue. These dynamics reinforce PSR’s principle of human-first centricity, as it highlights that phygital experiences are not limited to consumers but also encompass employees and broader organisational actors (Batat, 2026).

Service research increasingly recognises the importance of adopting multi-actor perspectives (McColl-Kennedy et al., 2020; Chen et al., 2023) and so too the PSR paradigm (Batat, 2026). This shift reflects the acknowledgement that services involve multiple interacting actors who exchange resources and co-create the service experience. Recent work by Gustafsson et al. (2024) reinforces this view, arguing that interdisciplinary consideration of both consumer and employee perspectives provides a more holistic understanding of the human experience of services. In phygital contexts, Batat and Hammedi (2023, p.11) similarly contend that effective design should positively contribute to both the customer’s experience and the employee’s experience, reflective of PSR’s human-first centricity principle (Batat, 2026).

This dual focus is not only academically important from a PSR perspective but also practically relevant. Employees act as boundary spanners between consumers and the organisation (Morgan et al., 2014), meaning their capacity to deliver value is shaped directly by their own service experience. If phygital systems undermine the employee experience, their boundary-spanning ability may be compromised. At the same time, positive consumer experiences are essential for maintaining competitive advantage (Gopalani and Shick, 2011). Without attending to both, organisations cannot strategically ensure that phygital experiences enhance outcomes for their workforce, strengthen their commitment to consumers and support overall organisational performance.

Beyond recognising these perspectives, it is important to understand how actors experience value co-creation, where interaction and collaboration generate value (Pham et al., 2022), particularly in relation to PSR’s principle of phygitalisation for positive impact (Batat, 2026). At the same time, value destruction must also be considered, where interactions unintentionally diminish or undermine value, leading to negative outcomes for one or more actors (Zainuddin and Gordon, 2020). We therefore argue that both value creation and value destruction are inherent in phygital settings and should be considered in PSR.

Prior service research supports this duality. Parkinson et al. (2019) showed how consumer and employee inputs shape transformative value co-creation in online communities. Similarly, Zhang et al. (2018) demonstrated how employee–consumer interactions determine whether online service encounters result in value co-creation or co-destruction. More broadly, service experiences are rarely purely value creating, with value destruction a commonly observed outcome (Chen et al., 2023). Within PSR, however, limited attention has been given to this duality, despite the heightened risk in phygital environments where the blending of physical and digital elements adds complexity.

One exception is Gustafsson et al. (2026), who draw on paradox theory to highlight tensions and contradictory outcomes in phygital experiences, yet do so exclusively from an employee perspective. Building on this work, we conceptualise value co-creation and co-destruction as plausible and potentially concurrent outcomes in phygital contexts for consumers and employees.

As PSR advances, it is therefore essential to consider not only how consumers and employees perceive phygital experiences, but also how these experiences generate both value creation and destruction outcomes. Responding to this need, the present review adopts a multi-actor perspective, examining both groups as called for in the PSR and service literature (Batat, 2026; Gustafsson et al., 2024; Batat and Hammedi, 2023), while explicitly accounting for this dual potential of value creation and destruction.

For our review, it is essential to first examine the status and positioning of existing reviews on phygital and related topics. This allows us to justify as the literature recommends, the need for the present review and its research questions and to demonstrate that existing reviews do not sufficiently address the aims of this study (Paul et al., 2021).

Although limited, there is a small but growing body of systematic reviews that focus on phygital and related topics, such as mixed reality, augmented reality, virtual reality and omnichannel marketing. Across this body of work, the predominant focus is on the consumer experience. The notable exceptions are Lo et al. (2024), who explore phygital from a service employee perspective and Mishra et al. (2021) and Roederer et al. (2026) are the only reviews to address both consumer and service employee experiences. However, each is constrained in scope. Mishra et al. (2021) includes only one study in human resource management regarding workforce management for omnichannel retailing, thereby offering a narrow organisational lens. Whereas Roederer et al. (2026), while broader in actor coverage, focus solely within financial services and focus exclusively on value creation (i.e. positive well-being) and not addressing the aims of the current review.

While reviews such as Del Vecchio, et al. (2023) and Mele, et al. (2021) represent important contributions to the phygital literature, they consider only a consumer perspective and are limited in addressing the first research question (RQ1) of the current review, examining both consumer and employee perspectives. Furthermore, as shown in Table 1, most reviews adopt a value creation focus (e.g. Roederer et al., 2026), emphasising the benefits of phygital and related topics. This only partially addresses RQ2, which also considers how value can be co-created but potentially destroyed in phygital contexts.

RQ3 uniquely draws on the reality–virtuality continuum to categorise types of phygital experiences examined in the literature (Table 1). This addresses a limitation in prior reviews, with the notable exception of Daling and Schlittmeier (2024), who show how the continuum can guide employee training by distinguishing between augmented reality and augmented virtuality. However, their work is limited to an employee perspective. More broadly, existing reviews remain consumer focused (Del Vecchio et al., 2023; Mele et al., 2021) and do not examine how the continuum can be used as an organising framework to differentiate the range of physical-digital integration represented across phygital scholarship.

The preferred reporting items for systematic reviews and meta-analyses (PRISMA) guidelines (Page et al., 2021) were used to structure the design, search and execution of the current scoping review. This ensured transparency and replicability in how studies were identified, screened and selected. The adoption of PRISMA aligns with established practice in services marketing and service management reviews (Subramanian et al., 2022; Riedel et al., 2022), as well as in emerging work that examines phygital experiences within tourism contexts (Zheng et al., 2025). By following PRISMA, this review provides a rigorous and accountable methodological foundation, while enabling subsequent synthesis using conceptual frameworks including consumption value theory and the reality–virtuality continuum.

In line with PRISMA guidelines, the time frame for this review was set from 2014 to the present. The term phygital was first introduced in 2007 by Chris Weil, chairman and CEO of Momentum Worldwide and later trademarked by the agency in 2013 to describe hybrid experiences that merge physical and digital environments (Del Vecchio et al., 2023). However, it was primarily confined to industry and promotional contexts in its early years. Academic engagement with the concept only became evident from 2014 onwards, when studies began to define, apply and empirically examine phygital in the domains of retail, services and consumer behaviour. Restricting the search window to 2014 to the present ensures that the review captures the emergence and development of phygital as a researchable construct while excluding earlier references that do not meet the criteria for systematic synthesis.

This review included searches on electronic databases Scopus, Web of Science, ProQuest and EBSCO. This approach is distinguished from prior phygital reviews, which relied on a single database (Web of Science in Mele et al., 2023; Scopus in Del Vecchio et al., 2023). Using multiple databases strengthens the comprehensiveness and robustness of the search strategy by reducing the risk of publication bias and capturing a broader range of interdisciplinary studies. This approach also ensures that relevant literature is not overlooked due to the indexing limitations of any one database.

This study overcomes the limitation of earlier reviews that relied solely on the term “phygital” (Del Vecchio et al., 2023; Mele et al., 2021) by applying an expanded search strategy that includes “digital–physical integration,” “hybrid* work” and “online–offline interaction.” This broader scope reflects the fragmented and interdisciplinary nature of the field, where scholars frequently investigate phygital phenomena without adopting the label itself. Terms such as “hybrid” are especially relevant, as organisational behaviour research defines hybrid spaces as “spaces [which] merge the physical and the digital in a social environment” (Hanzis and Hallo, 2024, p. 4). This aligns with conceptualisations of phygital as a hybrid (Klaus, 2024) and as the connection between offline and online spaces and offerings (Batat, 2024). By incorporating these descriptors, the review considers both consumer- and employee-focused perspectives, recognising that disciplinary differences frequently influence terminology. In line with PRISMA guidelines, this approach improves comprehensiveness and coverage while reducing selection bias, thereby ensuring that contributions from marketing, retail, services, education and organisational research are systematically included.

In line with the selected search terms and the interdisciplinary perspective undertaken, this review can be considered a scoping review, which differs from other types of reviews in both purpose and approach (Munn et al., 2018). Systematic reviews aim to answer narrowly defined research questions using strict inclusion criteria, while scoping reviews are more appropriate for exploring broad and emerging fields. Thus, our approach aligns with the current status of phygital literature, which is conceptually fragmented and dispersed across disciplines such as marketing, organisational behaviour, retail and education.

In line with the review objectives, clear inclusion and exclusion criteria were applied. Only peer-reviewed journal articles published in English and ranked in the Scimago Q1 or Q2 quartiles were included to ensure a high standard of scholarly rigour and relevance. The use of Scimago Q1 and Q2 for inclusion and exclusion aligns with other reviews, such as Whittaker et al. (2023). Studies needed to report empirical data and focus on service industry contexts to align with the scope of the review. This was particularly important when considering employees, as aspects of hybrid or teleworking may be undertaken, though not necessarily by employees within a service industry. Excluded sources also comprised papers published in non-peer-reviewed outlets, such as conference proceedings, book chapters and preprints, as well as studies published in Q3, Q4 or unranked journals and literature not written in English or lacking empirical evidence.

Initial database searches using the search terms outlined yielded a total of 2,800 studies (see Figure 1). After removing duplicates, the titles and abstracts of 2081 studies were screened, resulting in 823 exclusions at this stage. After screening the abstracts of the remaining 1,258 articles, 1,029 articles were excluded because they were not phygital in focus, did not include a consumer or employee perspective or were not published in a Q1 or Q2 Scimago-ranked journal. After applying these criteria and retrieving the papers, 214 studies were retained for analysis.

To address RQ1, which examined whether studies considered the perspectives of consumers, service employees or both, we thematically coded papers based on their samples and data collection methods. For example, a study that interviewed consumers was classified as having a consumer perspective. Similarly, studies that interviewed employees were coded as having a service employee perspective. Studies that included interviews with both consumers and service employees were classified as having both perspectives.

To address RQ2 regarding value creation and destruction in the phygital literature, Gioia’s approach (Gioia et al., 2013a) was employed to systematically code emotional, functional, social and epistemic value outcomes, distinguishing between value creation and value destruction, using a codebook (see Table 2). This approach enabled us to progress from initial open coding, grounded in the concepts and language of individual studies, to higher levels of synthesis and abstraction, thereby reducing fragmentation within the existing literature, as shown in the data structures presented in Figures 5–8. First-order codes were then grouped into more abstract second-order categories informed by the dimensions of the consumption-values theory framework (Sheth et al., 1991). This theory was selected for its demonstrated utility in organising fragmented bodies of literature in prior reviews (Whittaker et al., 2023), as well as its application in empirical studies related to the current topic, including augmented reality (Wang et al., 2023), the metaverse (Simonetti et al., 2025) and phygital experiences more specifically (Zolfaghari et al., 2025; Stan et al., 2026). The codebook shown in Table 2 served to clarify these dimensions and classify outcomes as representing value creation or destruction.

Finally, these themes were synthesised into higher-level abstraction that represent the value dimension outcomes, referred to as aggregate dimensions according to the Gioia methodology framework (Gioia et al., 2013a). This structured process, particularly for the second-order and aggregate themes, allowed for a nuanced understanding of which value dimensions have been a dominant focus (aggregate dimensions) and whether there has been an emphasis on their creation or destruction (second-order analysis) consistent with prior reviews using a similar analytical approach (Whittaker et al., 2023).

To address RQ3, we applied the reality–virtuality continuum by thematically coding whether studies were inherently physically dominant and augmented by digital technologies (augmented reality) or virtuality dominant and augmented by physical interactions (augmented virtuality). This was considered appropriate not only because phygital experiences are commonly defined as a “blend” of physical and digital elements, but also because related systematic reviews often delineate studies as either augmented reality (e.g. Kumar, 2022) or augmented virtuality (Alcañiz et al., 2019). These reviews typically use the continuum as a theoretical lens to position their focus, justify study selection or describe context, rather than to categorise and map research that sits across the spectrum. In the present review, the continuum is therefore used to classify and interpret the nature of integration in each study, without excluding any research based on where it falls along the spectrum.

To enhance rigour and consistency between coders, we used an iterative consensus coding approach, guided by structured codebooks shown in Table 2 and implemented within the Covidence extraction template. Three research team members independently coded batches of five papers at a time, meeting after each batch to compare interpretations, discuss discrepancies and refine both the codebook and extraction template (see Table 3 which illustrates the research activities undertaken by each researcher). While substantial agreement was reached regarding emotional and functional value outcomes, epistemic value outcomes required deeper discussion, with team members sharing examples from the papers they analysed to clarify distinctions. This iterative consensus coding process was repeated across three rounds and the extraction template was refined until consistent agreement was reached on how to code and interpret papers across the data set, as recommended by Miles et al. (2014) and MacQueen et al. (1998). This approach ensured analytical depth, consistency and transparency while remaining faithful to the interpretive foundations of Gioia’s approach.

The review highlights a substantial increase in publications on phygital topics (see Figure 2). From 2021 onwards, there is a clear upward trend, with 88.8% of the publications in this review appearing within the last three years of the 10-year observation period. This surge of interest, spanning both marketing and organisational behaviour perspectives in services, can be partly attributed to the disruption caused by the COVID-19 pandemic. Widely recognised as a “mega-disruption” to service industries (Kabadayi et al., 2020; Mulcahy et al., 2025), the pandemic reshaped how consumers and employees simultaneously engage with and experiment across digital and physical environments.

In reviewing the phygital literature, it was evident that theory was often underused, with 89 studies identified as lacking a guiding theoretical lens. While 125 studies did draw on a theory or framework, the pattern of use was inconsistent, with little convergence around a common set of theories. The most frequently applied were the job demands–resources theory (14 studies), conservation of resources theory (10 studies) and self-determination theory (5 studies), all of which were primarily applied from the service employee perspective. In contrast, consumer-focused studies displayed greater fragmentation, though many clustered around frameworks for understanding technology adoption and usage, most notably the theory of planned behaviour, the unified theory of technology acceptance and the technology acceptance model (6 studies in total).

The review therefore highlights a notable absence of theoretical consistency in the phygital literature. A substantial proportion of studies were conducted without an explicit theoretical lens and among those that did apply theory, there was little convergence around a common framework. Employee-focused research predominantly drew on established organisational perspectives and theories about how individuals work within their environment and the resources at hand. Whereas, by contrast, consumer-focused research exhibited greater fragmentation, through a subset clustered around technology adoption frameworks, including the theory of planned behaviour, the unified theory of technology acceptance and the technology acceptance model.

In relation to methods employed by the phygital studies within the review, it was evident that cross-sectional surveys (69 studies) are the single most common approach. This is followed by qualitative approaches using interviews (53 studies). Together this indicates a balance of both confirmatory and exploratory interpretative work being undertaken. Qualitative approaches are strong but secondary, as interviews and related qualitative methods were the second most frequent design (53 studies). Experimental studies (18) appear much less frequently than surveys or interviews, suggesting that causal testing and controlled designs are less developed in this area. Methodological diversity also exists, but in small numbers with studies still being noted for using case studies, mixed methods, econometric analyses and creative designs such as autoethnography, ethnography, process-tracing and diary studies:

The findings show a strong focus on the service employee perspective in phygital studies (see Figure 3), with 145 studies examining how employees adapt, cope or create value in these environments. However, most of these focus on employee-to-employee interactions, with limited attention to direct consumer engagement. This suggests a tendency to frame phygital experiences as internal operational issues, overlooking the broader human experience, particularly how employee experiences may indirectly affect consumers. In contrast, only 54 studies take a consumer perspective, despite phygital experiences being positioned as consumer-facing in marketing and service literature, revealing a significant opportunity to better understand consumer engagement.

Even fewer studies (16) address both employees and consumers together, highlighting a significant gap in capturing the interactive and relational nature of phygital service encounters and considering key aspects of service in relation to value co-creation and ecosystems, where actors are known to interact and engage with each other (Parkinson et al., 2019). One notable exception which addresses both employee and consumer perspectives is evident in the work of Baudet and Parmentier (2025) who examined esports tournaments in stadiums as social phygital experiences, exploring value creation and destruction from producer, player and audience perspectives using a triadic lens. They find that differing realities in phygital settings make it challenging for producers to manage the atmosphere and information in a way that ensures one actor’s experience does not detract from or harm another’s, particularly when those realities differ based on varying levels of physical or virtual engagement.

Building on Batat’s (2026, p. 512) definition of phygital phenomenology as “how technologies mediate human–world interactions,” we further unpack these actor dynamics. To extend this analysis, a complementary layer of coding examined how studies conceptualise interaction dynamics between actors when explicitly reported. A subset of studies (n = 65) provided sufficient detail to classify interaction types, which were inductively grouped into three categories: employee–employee (E2E), consumer–consumer (C2C) and consumer–employee (C2E) interactions. This subset of the literature is dominated by employee-to-employee (E2E) interactions (n = 44), followed by customer-to-customer (C2C) (n = 13) and customer-to-employee (C2E) (n = 8). Many studies lack clarity on how interactions unfold across actors, highlighting a need for future research to better specify how technology facilitates human interaction (Batat, 2026).

E2E interactions dominate the data set and occur within digitally enabled hybrid and remote work settings, where technologies and platforms structure communication and coordination. Silue and Aguirre-Urreta (2025) showed how videoconferencing shapes collaboration in remote work, while Stelmaszak et al. (2025) highlighted how platform work (e.g. Uber) creates new forms of interaction with algorithmic systems, requiring new approaches to coordination. Overall, E2E interactions are defined by digitally mediated collaboration, with technology reshaping how employees interact and perform work.

C2C interactions primarily occur in digitally mediated environments, where consumers co-create value through peer engagement rather than firm involvement. For example, Veer and Dobele (2024) showed that online mental health forums enable emotional support and shared experiences but may discourage engagement with professional care. Tang et al. (2024) found that virtual travel communities foster identity and attachment beyond physical experiences, while Kim et al. (2025) demonstrated that online gaming environments facilitate ongoing interaction, shaping identity and experiential value. Overall, C2C interactions are characterised by peer support, community formation and shared engagement across digital–physical contexts.

C2E interactions occur mainly at the service interface, where technologies mediate encounters between customers and frontline actors, including hybrid human–technology agents. Klaus (2025) showed how AI concierge services personalise interactions to create seamless phygital experiences, while Leiño Calleja et al. (2025) demonstrated how customers engage with human–robot teams, with trust and competence shaped through these interactions. These studies highlight how C2E interactions are increasingly defined by technology-mediated service encounters and evolving frontline roles:

Analysis of the studies in this review reveal that research on phygital environments predominantly emphasises emotional and functional outcomes, with a stronger focus on value creation over value destruction (see Figure 4). These trends mirror findings in other technology-related reviews, such as Whittaker et al. (2023), who observed a similar emphasis on these two dimensions in deepfake studies. Importantly, our review also highlights differences between consumer- and employee-focused studies, with each perspective placing varying weight on creation versus destruction across value dimensions. These distinctions are outlined next, beginning with emotional value.

When examining emotional value outcomes, most studies emphasised the positive emotional impacts of phygital experiences for both consumers and service employees. Specifically, 62% of consumer-focused papers addressed positive emotional value outcomes (34 out of 54), compared with 44% of service-employee-focused papers (64 out of 144). However, this pattern is reversed when looking at emotional value destruction: where 36% of all papers (52 out of 144) considered destructive emotional outcomes compared with 22% of consumer-focused studies (12 out of 54).

Interpreting these findings suggests that service marketing scholarship on phygital environments predominantly frames emotions as mechanisms of value creation, highlighting how such settings amplify positive consumer experiences (see Figure 5). For example, Bonfanti et al. (2023) examine how phygital encounters enhance overall positive emotions, while Mele et al. (2021) identify specific emotions such as happiness and excitement that strengthen consumer engagement and loyalty. By contrast, service management and organisational behaviour research takes a more employee-centred perspective, often situating emotions within broader constructs of wellbeing and resilience, such as work–life balance (Boyraz and Gilbert, 2024; Tackett and Lemon, 2025).

For negative emotions, the literature demonstrates their role in value destruction. On the consumer side, frustration, anger and disappointment are reported outcomes of phygital experiences (Mele et al., 2021; Guzzetti et al., 2024), with implications for diminished satisfaction and potential brand disengagement. For service employees, destructive outcomes are again tied to wellbeing, including burnout (Mikkelson et al., 2024; Standaert et al., 2025), as well as technology-induced strain, such as technostress and technology anxiety (Harunavamwe and Kanengoni, 2023). Together, these findings reveal a fragmented but important pattern, where consumer-focused studies highlight positive emotions as central to value creation, whereas employee-focused studies emphasise negative emotions and wellbeing strains as drivers of value destruction.

When examining phygital functional value outcomes, studies that considered service employee (54.86%) or consumer (74.07%) actor perspectives revealed a considerable emphasis on the functional value phygital experiences could provide. However, closer examination of these outcomes within the data structure revealed that this functional value was perceived differently across actor perspectives. For consumers, functional value was observed through aspects such as convenience, efficiency and control, while for service employees, productivity and technological infrastructure were emphasised. For example, Nevi et al. (2025) reported the use of immersive technology touchpoints and experiences in healthcare, highlighting that service employees such as doctors note the lack of technological infrastructure, a potential functional value destructive aspect for phygital service experiences.

Interestingly, when considering functional value destruction, first-order codes similar to those identified in functional value creation emerged, yet were negatively valanced, such as “waste of time (opposed to efficiency),” “difficult to use (opposed to ease of use)” and “lack of control (opposed to control)”, highlighting the paradoxical nature of phygital experiences when they are not designed or implemented strategically and effectively. An overview of the data structure for functional value outcomes is provided in Figure 6.

In reviewing the literature on social value creation, a clear distinction emerged in how it was conceptualised. Some studies highlighted dimensions of social connection (Mieli et al., 2024; Hasbi, and van Marrewijk, 2024; Tackett and Lemon, 2025) and community (Tang et al., 2024; Orel et al., 2025; Parth et al., 2023), while others emphasised the role of social influence (Jeong and Jo, 2024; Pal et al., 2025) in shaping the use of phygital experiences and the underlying technologies that enable them (see Figure 7). In relation to social value destruction, studies reported aspects such as social isolation (Mou et al., 2025; Orel et al., 2025), poor communication (Teng-Calleja et al., 2024) and loss of identity (Shi et al., 2024; Oppong Peprah, 2024) (see Figure 7).

Across the reviewed studies, a notable emphasis was placed on social value outcomes, though the distribution varied between service employee and consumer perspectives. For service employee studies, 31.25% considered social value creation, while a smaller proportion, 25%, focused on social value destruction. In contrast, consumer-focused studies revealed that 37.03% addressed social value outcomes, yet very few, only 0.07%, explored aspects of social value destruction. This suggests that while both groups of studies acknowledge the importance of social value, destructive dimensions remain comparatively underexplored, particularly in consumer research and therefore consideration is needed of whether such reported social value destruction effects may also occur or be experienced by consumers.

Among the four value outcomes, epistemic value was the least reported within the phygital literature. When examined by actor type, 13.19% of employee-focused studies identified some form of epistemic value creation, compared to 22.22% of consumer-focused studies. Through the thematic analysis, as shown in Figure 8, it emerged that some of the reasons reported for epistemic value created in phygital experiences included learning and knowledge development (Nevi et al., 2025; Xu et al., 2024; Biemans and Malshe, 2024), curiosity and novelty (Deng et al., 2025; He et al., 2024; Banik, 2021) and social or collective learning (Veer and Dobele, 2024; Munnich et al., 2025).

Comparatively, there was limited research which reported epistemic value destruction outcomes. Within this limited research, epistemic value creation was shown to occur in phygital experiences via cognitive overload and distraction (Nevi et al., 2025; Matikainen et al., 2023; Harunavamwe and Kanengoni, 2023), superficial or reduced learning (Xu et al., 2024; Karhapää et al., 2024; Crowston et al., 2026; Manole et al., 2025) and breakdowns in knowledge sharing and communication (Biemans and Malshe, 2024; Stoian et al., 2022):

Analysis of the papers within the data set shows that most studies to date on phygital experiences focus on augmentation of the physical realm by digital technologies, particularly through augmented reality. This focus is evident with the majority of studies n = 165, which report the use of such technologies (see Figure 9).

Augmented reality applications cluster around retail and consumer engagement (Batat, 2022; Bonfanti et al., 2023), museums, tourism and cultural heritage (Clemente et al., 2024; Xu et al., 2024; Pesce and Franzè, 2025) and hybrid workplaces and collaboration (Hasbi and van Marrewijk, 2024; Blaurock et al., 2024), reflecting its growing role in enriching physical environments with digital layers across commerce, culture and work.

By contrast, digital-dominant contexts, where virtual environments are supported by physical elements, were far less common n = 56 identifying relevant applications. Augmented virtuality in recent work clusters around event/venue experiences (Baudet and Parmentier, 2025; Bevolo and Amati, 2024) and workplace/spatial visualisation (Tiilikainen et al., 2024; Bevolo and Amati, 2024), where predominantly virtual environments are populated with live or modelled data from physical spaces. A key limitation across this body of work is the lack of detail on what digital technologies are being used specifically and how these technologies interact with the physical environment.

A small number of studies n = 20 considered phygital experiences which could be either augmented reality or augmented virtuality, exploring contexts where the balance between physical and digital elements could change. For service employees, this was often investigated in hybrid workplace contexts. Several studies addressed both augmented reality and augmented virtuality (e.g.Mikkelson et al., 2024; Wheatley et al., 2024) by incorporating physical-dominant (on-site/hybrid) and virtual-dominant (remote/online) arrangements in their designs or measures. For instance, Wheatley et al. (2024) examined how flexible working arrangements spanning both physical and digital environments provided employees with autonomy and how this autonomy has ripple effects which ultimately have an impact upon consumers.

From a consumer perspective, studies have examined differences in phygital experiences, which can be either physical-dominant (augmented reality) or virtual-dominant (augmented virtuality) (Orazi and Nyilasy, 2025). Orazi and Nyilasy (2025) demonstrate this through a series of experiments showing how the perceived value of a retail product can shift from physical to virtual via non-fungible tokens (NFTs).

Overall, the findings of this review show that the phygital literature has predominantly focused on augmented reality, where digital elements enhance physical environments, while augmented virtuality has been comparatively less examined.

This paper and the scoping review underpinning it, was guided by three research questions that shape its contributions to PSR. Firstly, although the phygital literature is expanding rapidly, it predominantly focuses on a single actor, either consumers or service employees, which limits a holistic understanding of phygital experiences. Addressing RQ1, the review broadens the human-centricity perspective by showing the value of integrating both viewpoints. Secondly, existing research often centres on emotional and functional value creation and destruction, yet remain fragmented and largely overlooks other value dimensions, such as social and epistemic value. It also rarely considers that value can be created and destroyed simultaneously within a single experience. Addressing RQ2, the review extends PSR’s principle of phygitalisation for positive impact by demonstrating the multidimensional and dual nature of value. Thirdly, along the reality–virtuality continuum, prior research has focused heavily on augmented reality, with less attention given to augmented virtuality (RQ3). In response, this review advances understanding of the multimodal integration and continuity of phygital experiences by categorising different levels of physical and digital interaction across the literature. These contributions are brought together in the proposed phygital co-experience value model (PCVM), which integrates these perspectives into a unified conceptual framework.

Firstly, this review contributes by advancing PSR (Batat, 2026) by providing one of the first systematic, multidisciplinary analyses of multiple actors involved in phygital service experiences. Existing literature has largely focused on consumer experiences (Del Vecchio et al., 2023; Lo et al., 2024), with limited exceptions (e.g. Roederer et al., 2026) and is often constrained to studies explicitly labelled as “phygital.” Emerging domains outside of marketing, such as organisational behaviour and management, frequently use different terminology for overlapping concepts, thereby risking the omission of relevant insights from adjacent literatures.

Building on Gustafsson et al.’s (2024) conception of human experience and PSR’s principle of human-first centricity (Batat, 2026), which recognises both consumers and employees as co-creators of service encounters, this review integrates marketing and organisational behaviour perspectives to offer a more comprehensive account of phygital contexts. It extends PSR’s human-first centricity principle by showing that phygital human experiences cannot be understood from a consumer-only perspective but require attention to multiple interacting actors across disciplines (Batat, 2026; Gustafsson et al., 2024; Roederer et al., 2026). This addresses calls within PSR for greater cross-disciplinary integration across marketing, management and organisational behaviour to advance understanding of phygital human experiences (Batat, 2026).

The findings reveal that most research remains single-actor focused, with only a small number of studies (e.g. Pusceddu et al., 2025; Leiño Calleja et al., 2025) adopting true multi-actor perspectives. Moreover, actors are often examined in isolation based on their position within the service system, with insufficient attention to their simultaneous involvement and interaction in shaping shared experiences. This reinforces PSR’s contention that phygital research must move beyond single-actor perspectives, as these limitations constrain theory development by obscuring the relational and systemic nature of phygital service encounters (Batat, 2026).

This paper makes a second contribution to the services and phygital literature by systematically assembling and thematically analysing value outcomes in phygital experiences through the lens of consumption values theory, consistent with prior reviews of digital experiences (Whittaker et al., 2023). In doing so, it both confirms and extends early conceptualisations of phygital as operating along a multi-dimensional continuum (Batat, 2024, 2026; Batat and Hammedi, 2023; Yao et al., 2024).

Regarding the multi-dimensional nature of value, current phygital research appears to contradict consumption value theory, which posits that value spans emotional, functional, social and epistemic dimensions, by disproportionately emphasising only emotional and functional value. This narrow theoretical focus is likely driven by disciplinary biases, with marketing research viewing phygital experiences as engaging and enjoyable for consumers emphasising emotional value (e.g. Mele, et al., 2021), while organisational and HR studies position them as efficiency-enhancing tools for employees emphasising functional value (e.g. Suwarsi, et al., 2025; Akbari, et al., 2025). This pattern reflects a broader tendency in the services literature to prioritise hedonic and utilitarian value (Zainuddin et al., 2013; Ma et al., 2023), consistent with Babin et al.’s (1994) framework, thereby overlooking the potential for phygital experiences to also generate social and epistemic value. As a result, the existing literature risks offering a constrained understanding of the full spectrum of value created or diminished in phygital contexts. The current research review therefore supports calls from emerging phygital research for social and epistemic value to be more systematically considered, measured and theorised (Zolfaghari et al., 2025).

While prior research recognises variation in the degree of value created in phygital contexts (Batat, 2026; Roederer et al., 2026), this review extends that view by conceptualising value as a continuum that also includes value destruction, demonstrating that phygital encounters can produce both positive and negative outcomes. Given the centrality of value in services and phygital scholarship (Batat, 2026; Leroi-Werelds, 2019; Zolfaghari et al., 2025), this highlights the need to examine value creation and destruction as interrelated phenomena. In doing so, the research contributes to the emerging PSR paradigm by moving beyond the dominant single-perspective focus on value creation (Batat, 2026; Roederer et al., 2026) and aligning with, yet extending, the principle of phygitalisation of positive impact (Batat, 2026). Specifically, it shows that such impact cannot be fully understood without accounting for value destruction, and that value outcomes may vary across actors, with the same interaction simultaneously creating value for some while diminishing it for others. This advances theorising on the paradoxical nature of phygital experiences (Gustafsson et al., 2026) and underscores the importance of capturing both value-creating and value-destroying dynamics to fully realise PSR’s potential.

This review also provides a third contribution to the PSR paradigm by clarifying how phygital experiences can be categorised, thereby advancing its third principle of multimodal integration and continuity (Batat, 2026). While prior work conceptualises phygital as a continuum or general integration of physical and digital elements (Mele et al., 2024; Gensler and Rangaswamy, 2025; Del Vecchio et al., 2023), it offers limited guidance on how different configurations should be distinguished in practice. This review therefore confirms the existence of a spectrum but highlights the lack of operational clarity in its application.

To address this, the review extends PSR by integrating the reality–virtuality continuum (Milgram and Kishino, 1994; Flavián et al., 2019) to systematically map existing studies, providing a clearer basis for distinguishing between augmented reality (digitally enhanced physical experiences) and augmented virtuality (physically enriched digital experiences). This strengthens PSR’s capacity to specify how physical and digital modalities are integrated across service touchpoints (Batat, 2026) and not only consolidates existing knowledge but also supports more systematic identification of underexplored configurations within phygital service systems. In doing so, it offers a more precise foundation for theoretical development and positioning of future PSR research.

Reflecting these contributions, this research offers a fourth contribution through the proposed PCVM (see Figure 10). The model extends emerging conceptual work (Roederer et al., 2026) and PSR’s principle of human-first centricity (Batat, 2026). It does so by explicitly mapping multi-actor interactions in phygital contexts, including C2E, E2E and C2C relationships (Roederer et al., 2026; Parkinson et al., 2019). The model also helps extend the limited studies that consider multiple actor perspectives (e.g. Baudet and Parmentier, 2025). In addition, it ensures that interaction types are more clearly identified and explicitly detailed. This addresses a key gap identified in the actor-related findings, where interactions were often under-specified or unclear. Figure 10 further integrates the reality–virtuality continuum to position different forms of phygital experience along a continuum ranging from augmented reality (where the physical environment dominates) to augmented virtuality (where digital elements prevail). Importantly, the PCVM model extends prior frameworks by incorporating both value creation and value destruction and linking these outcomes to multiple value dimensions, as informed by consumption values theory. In doing so, it provides a more comprehensive and integrative representation of how value is co-experienced and shaped within phygital service environments.

This review offers practical implications for service organisations adopting phygital experiences. A key priority is taking a holistic view of how these experiences affect multiple actors within the service system. Rather than focusing only on consumers, organisations should also consider impacts on employees, especially as roles evolve in hybrid environments. A balanced, multi-actor approach helps avoid creating value for one group while generating negative outcomes for another. Tools such as journey mapping and service blueprinting can support this approach by identifying friction points across the phygital experience from each actor’s perspective. For example, retail stores using smart fitting rooms may enhance personalisation for customers but simultaneously overwhelm employees managing digital alerts alongside in-store service. Similarly, hotels offering mobile check-in may improve guest convenience while increasing role ambiguity and tech-support demands for staff. Co-design workshops incorporating both consumer and employee perspectives can uncover these gaps and inform adjustments such as clearer assistance signals, revised staffing or redesigned roles.

A second implication is the need to address factors that lead consumers and employees to perceive phygital experiences as reducing, rather than creating value. This includes functional value destruction, where systems are seen as time-consuming or difficult to use and emotional value destruction linked to technostress or technology-related anxiety. Organisations should therefore assess the technology readiness of all actors before adopting or scaling phygital solutions, as this helps determine whether negative experiences can be mitigated through training, onboarding or guided familiarisation, or whether they stem from poor design and weak integration between physical and digital elements. It also clarifies whether issues relate to user capability or experience design flaws. For example, smart carts in supermarkets may be valued by technology-confident shoppers yet cause frustration or embarrassment for others when scanning fails, with the resulting troubleshooting demands absorbed by employees. Similarly, AI-driven appointment systems in banks can disorient customers while increasing pressure on staff managing automated scheduling. In both cases, assessing technology readiness can guide decisions on training, interface redesign or phased implementation.

Thirdly, phygital initiatives should be treated as an ongoing challenge in experience management, not a one-off technology decision. The central concern is that phygital configurations may create value for one stakeholder group while reducing it for another, yet these imbalances are rarely monitored over time. Service organisations should therefore conduct regular value symmetry checks before scaling, drawing on shared customer experiences–employee experience indicators (e.g. friction or support rates, employee stress and learning success), alongside clear guidelines, to identify imbalances. Explicitly including employee stress into service metrics can also reveal hidden work, coordination costs and monitoring pressures when implementing phygital services. This supports earlier detection of mutual value destruction and improves scalable experience design. Such assessments are especially important when transitioning from pilot projects to full implementation and should be embedded in performance management and governance frameworks as early warning mechanisms. This enables managers to adjust staffing, interfaces or task allocation before negative effects become entrenched. For example, airlines introducing biometric boarding may improve passenger flow but simultaneously increase stress for gate agents managing errors and privacy issues. Similarly, universities deploying hybrid classrooms may enhance flexibility for students while increasing the cognitive load for academic staff. Monitoring indicators such as employee stress, troubleshooting time and customer friction enables early detection of these asymmetries and enables corrective actions such as interface redesign, added support roles or staffing adjustments.

These implications also have wider societal relevance. As phygital services become more and more integrated into everyday settings such as supermarkets, banks, airports, healthcare sector, education and public services, organisations must ensure that efficiency gains do not come at the expense of accessibility, inclusion or human dignity (Batat, 2026). Phygital service systems may disadvantage vulnerable customers with lower digital literacy, older people, people with disabilities or those who simply prefer face-to-face support. Similarly, employees may bear hidden coordination, troubleshooting and emotional workloads when digital systems fail or when consumers encounter difficulties using them. Service organisations should therefore retain supportive alternatives, design inclusive interfaces and monitor whether phygital implementations improve or impair the well-being of all stakeholder groups. This extends the practical relevance of the research beyond aspects of performance by demonstrating how the design of phygital services can impact participation, quality of life and equitable access to services.

Based upon the findings of the scoping literature review, several knowledge gaps and opportunities for service scholarship fall into four categories: multi-actor perspectives; theoretical frameworks; value creation and destruction; and the reality–virtuality continuum – as summarised in Table 4.

One area that the scoping review highlights as fertile for future research is taking multi-actor perspectives in PSR aligned to the principle of human-first centricity (Batat, 2026). Beyond the evident need to consider both consumer and service employee perspectives, there are also other actor considerations worthy of integration. Specifically emergent from the literature is consideration of technological (or non-human) actors, such as chatbots and robots, whose inclusion deepens understanding of the complex human–technology interaction inherent to phygital experiences (Batat, 2026; Cheng and Jiang, 2020).

Beyond focusing only on employee–technology and consumer–technology dyads, future research can advance service and phygital studies by examining technological actors as boundary spanners and intermediaries that interact and co-create with both consumers and employees, serving the goals of both (Phillips, et al., 2023; Odekerken-Schröder, et al., 2022). Illustrative examples include retail smart mirrors, through which consumers virtually try on clothing, while the data generated assists frontline retail staff in making personalised recommendations, effectively co-creating the experience across human and technological actors. Another example is the emergence of healthcare robots that coordinate with frontline health staff such as nurses to provide patient care, operating at the intersection of human and technological service provision.

A related avenue for research is to examine the extent to which technological actors are integrated into teams or co-creation processes and how substituting them for specific roles reshapes the phygital service experience, value co-creation and outcomes (Čaić, et al., 2018). Many hotels, for instance, have replaced front-desk clerks with self-service technologies for routine tasks, effectively displacing physical frontline staff. This raises important questions about how such substitutions affect both consumers and remaining service employees when familiar frontline interactions are removed or reconfigured through digital interfaces. It is also worth exploring what happens when physical and digital interactions are not seamless, for example, when self-service check-in systems fail and how such disruptions impact the overall phygital service experience and its value outcomes. Future research could also investigate how appropriate these substitutions are across different service contexts, such as luxury versus non-luxury settings, or in relation to specific roles and consumer types. Understanding where phygital practices are suitable could help identify the contexts in which such implementations are likely to succeed or fall short of value outcomes.

Our review highlights the urgent need for stronger theoretical grounding in the phygital literature for all six PSR priorities to be advanced. For example, research opportunities such as adopting multi-actor perspectives and recognising both the value co-creating and value co-destroying potential of phygital experiences emphasise the importance of the following theories in guiding the development of suitable theoretical frameworks through which phygital could be positioned. In particular, paradox theory provides a useful lens for understanding the simultaneous and often conflicting dynamics of phygital services as evidenced in prior work by Bakrim, et al. (2025) and Gustafsson, et al. (2026). By focusing on how organisations and actors manage persistent tensions, such as efficiency versus personalisation, automation versus human touch or control versus empowerment, paradox theory helps explain how the same technological interactions can generate value for some actors while undermining it for others. Applying this lens would allow researchers to capture the dual nature of phygital experiences, acknowledging that co-creation and co-destruction are not mutually exclusive but interwoven outcomes that evolve over time.

Organisational identity represents another stream of literature with strong potential to advance PSR, particularly its principle of strategic organisational transformation (Batat, 2026), by ensuring that appropriate mindsets and strategies are adopted in response to the growing prevalence of phygital experiences. Organisational identity has long been defined as the collectively shared belief about “who we are as an organisation” (Albert and Whetten, 1985), giving organisations a sense of uniqueness and continuity. However, scholars have emphasised that organisational identity can change and can be subject to negotiations (Gioia et al., 2000; Gioia et al., 2013b). Employees play a central role in this process because they embody, interpret and communicate identity claims through their daily interactions (Cornelissen et al., 2021) with consumers, colleagues and increasingly technological actors. Our review suggests that phygital service arrangements have significant implications for the unfolding of such identity dynamics by altering the conditions of interaction. For example, phygital interactions may erode organisational identity, as digital tools and non-human agents increasingly perform tasks that were previously the responsibility of employees (Baiyere et al., 2023; Wessel et al., 2021). These changes may also alter role identities and raise questions of continuity and distinctiveness among organisational members (Corley and Gioia, 2004).

Moreover, research has shown that employees and consumers do not simply identify with organisations but may also experience ambivalence towards them (Glynn and Abzug, 2002; Corley and Gioia, 2004). Along the reality–virtuality continuum different phygital configurations are likely to create different identification opportunities. Augmented reality often reinforces existing identity ties by integrating digital tools into physical interactions. In contrast, augmented virtuality places individuals in primarily digital environments, where identification may be weaker, more fluid or contested. This ambivalence explains the simultaneous co-creation and co-destruction of value observed in our review.

Finally, organisational identity research focuses on how organisational members, such as employees, respond to identity threats and tensions (Ravasi and Schultz, 2006). Phygital service contexts describe central contexts for such tensions: For example, automation versus human touch, personalisation versus standardisation and surveillance versus support. These issues raise questions for organisations about maintaining coherence between digital and physical spaces. For employees, they can trigger defensive reactions or a search for new role definitions (Ashforth et al., 2020). Strategies of integration, separation or sequencing offer ways to manage such tensions (Corley and Gioia, 2004). However, their effectiveness in phygital environments remains largely unexplored.

This review has outlined how phygital service experiences can be categorised and differentiated using the reality–virtuality continuum (Milgram and Kishino, 1994; Flavián et al., 2019). Moving forward, researchers should position their work explicitly along this continuum and clearly describe the technologies and physical servicescape elements involved. Doing so will strengthen the coherence of the field, reduce fragmentation and advance understanding of the PSR principle of multimodal integration and continuity (Batat, 2026).

The review further identifies a relative nascent consideration of phygital experiences which, according to the reality–virtuality continuum, can be classified as augmented virtuality experiences, which is service experiences where real-world objects or people are embedded into a primarily virtual environment. This represents a meaningful gap, as such configurations are becoming increasingly prevalent in contemporary service contexts. One avenue for future research lies in retail and hospitality contexts, where employees and consumers interact in shared virtual showrooms or service spaces, raising questions about authenticity, trust and the co-creation of value. Another promising area is social enterprise models, in which consumers purchase digital products within a virtual environment that are linked to the creation or distribution of physical goods benefiting society or disadvantaged groups, for example, buying a virtual artwork or collectible that funds the production of school supplies, clothing or meals for those in need. Consideration of such opportunities could expand understanding and enhance the impact of phygital service experiences yet also contribute to the TSR agenda by illustrating how phygital can support the wellbeing of individuals and society more broadly.

This research was conducted as part of the American Phygital Association Summit 2025, sponsored by the American Institute of Business Experience Design (AIBXD) – New York. The submitted research was not funded and there are no conflicts of interest to declare. The authors sincerely appreciate the valuable feedback provided by anonymous reviewers and editors on earlier versions of this work.