The pressure to deliver differentiated and consistent customer experiences is increasing as a result of significant disruption across industries. Simultaneously, a seismic shift in growth strategies is taking place, with many businesses and consumers looking to subscribe to services rather than buy products outright. The subscription model changes short-term economics and long-term relationships with customers, necessitating new business and engagement models. The result will be a stronger focus on loyalty and relationships that build on consistent, positive interactions with customers.
The empowered customer is, in effect, forcing evolution of the entire technology stack to enable real-time, contextually relevant experiences. We have witnessed dramatic changes as a result, with the relationship between IT and line of business evolving to embrace and capitalize on this disruption. Whether through contextual experiences, pervasive intelligence, or emerging cloud models, it is clear that technology plays a pivotal role in determining long-term trends and driving changes in human behavior.
Figure 1 shows the top trends that are impacting customer experience and commerce. As the pace of technology, innovation, and competitive pressures accelerate, business leaders who ignore this new reality do so at their own peril. Experiences, not products, will be the battleground of the future, and data plays a powerful role in improving the context of those experiences. Organizations must digitally transform their businesses to best attract, win, retain, and support customers by leveraging the latest applications, analytics, and infrastructure to deliver a differentiated experience. Doing so is not a luxury, but a necessity for survival.
Figure 1
Winners and Losers in Customer Experience and Commerce
Source: 451 Research
For businesses to effectively compete in this new environment, they need to capture, analyze, understand, and act on information. This includes the ability to recognize patterns, comprehend ideas, plan, predict, problem-solve, identify actions, and make decisions. The explosion in connectivity, intelligent devices, and the digital interfaces overlaying this information now make it increasingly possible to convert it into personalized experiences, augmented by real-time context and customer preferences. The most meaningful (and ultimately profitable, for those that provide them) experiences will be informed by data-driven context clues, which will only increase in number as the amount of available data—especially unstructured data—proliferates. This will continue to accelerate with the growth of new types of connected devices capturing unprecedented volumes of behavorial data.
As effective use of customer data becomes more integral to success, businesses must be cognizant that hyper-personalization strategies are already in jeopardy of breaking consumer trust. The current dilemma is a cautionary tale of the importance of transparency, especially in the context of the General Data Protection Regulations. Our Voice of the Connected User Landscape (VoCUL) monthly tracking of consumer trust and confidence shows that 27 percent of consumers are less trusting of U.S. businesses than they were one year ago. When it comes to data privacy, nine in 10 respondents are either very (41 percent) or somewhat (50 percent) concerned about the ability of the companies with which they do business to adequately protect their personal data.
In technology terms, executing on business transformation demands new investments in new digital platforms. This requires a well-planned approach to business and IT innovation, with the goal of aligning around a disruptive culture that drives investments in new tactics to remain relevant in the eyes of customers. Addressing customer demands for new immersive experiences relies heavily on rich media content, prescriptive insight, and intelligent automation to build deeper connections, recommend next best actions, and create more contextually driven interactions. Investing in algorithmic technologies can help to achieve scalable contextual relevance as intelligent applications take over execution, freeing up resources across the business.
Sheryl Kingstone is research director for business applications at 451 Research.