Failure 1: the two halves live separate lives
The most common failure is straightforward: the physical activation and the digital experience were designed independently. Visitors scan a QR code in a store, land on a generic page, and have no idea what they're supposed to do. Or they play an online game, but the connection to the event or the product on the shelf has completely vanished.
Phygital only works when both halves make the same promise. What you see, hear, or touch in the physical world must carry directly into the digital part. Same language, same tension, same story.
Failure 2: the handoff asks too much
Every extra step a user has to take is a potential drop-off point. Download an app, create an account, type a long URL: each of those costs you conversion. We regularly see campaigns where twenty percent of physical visitors never reach the digital part at all, simply because the barrier is too high.
The transition needs to be nearly frictionless. A QR code that drops you straight into an experience that works without login. An NFC tap that opens the next step without explanation. The smoother the handoff, the more of your audience makes it through.