By Alyssa Hanson
As an increasing number of retailers look for ways to differentiate themselves through their customer experience (CX), more and more are increasing their investment into customer experience management (CEM) software. With good reason — brands who can effectively understand and manage their customer experience at every touchpoint are able to provide a superior customer experience.
Customer buying behaviour has evolved. Nowadays, simply meeting customer needs is not good enough. Today’s customers want an emotional connection to their favourite brands, and retailers who want to come out on top are looking for new ways to deliver that level of customer intimacy at each stage of the buyer journey. As such, retailers are looking for new ways to keep up with evolving customer demands, which is contributing to the rapid growth of the customer experience management market.
In fact, a recent report by Grand View Research, Inc. expects the CEM market to grow at a rate of 22.9% annually, exceeding $32B USD globally by 2025. The report cites the growing focus of organizations on providing consistent and enhanced experiences as the reason.
This massive industry growth is accompanied by major change — and we predict that the CEM market will change dramatically in 2019.
Here’s what to expect from the year ahead.
Customer experience management will shift from reactive to proactive. Every retailer aims to be one step ahead of their customers’ expectations, but that hasn’t always been so easily attained. 2019 is going to change that, as more and more retailers will transition from reactive — simply closing the loop on customer issues after they’ve happened, to proactive — using machine learning to predict which aspects of the customer experience will have the biggest impact on business metrics such as customer satisfaction and churn. Retailers who are able to successfully make this shift will improve the experience and deliver what their customers want before they complain or ask for it.
CX and voice of the customer (VoC) programs are designed to provide companies with the information they need to respond to customer issues. Traditionally, this has been done by collecting data from multiple channels, collating, and analyzing that data. However, this reactive approach won’t be enough in 2019. Customers now expect the companies they do business with to know them intimately and are becoming less forgiving of a negative experience.
Given the right tools, retailers will go beyond these changing customer expectations by acting on customer insights proactively — anticipating issues before they happen, and even predicting ways to improve the customer experience at each touchpoint. In order to get there, modern CEM platforms will need to support retailers regardless of which stage of action their company is at, while ensuring the flexibility to scale with them, maximizing ROI on CX investments.
By bringing together all operational and customer data in a single platform, retailers will be empowered to deliver a truly proactive customer experience.
The acquisition of key CEM vendors will increase the demand for new players in the market.
2018 brought a number of acquisitions in the CEM space, most recently the acquisition of Qualtrics by SAP, which brought mainstream attention to the growth of the CEM market and validated the need for technology solutions. This indicates that there will be more acquisitions to come in 2019, but what does that mean for customers of those companies being acquired?
Historically, most acquisitions fail their existing customers, leaving them vulnerable during and after the transition. Key departments are consolidated and the result is usually lower standards of service and slower or less innovative product development. Small to mid-market customers tend to receive less attention, while resources and focus shift to their larger counterparts. Those companies will start to look for new options, moving their business to smaller CEM vendors who offer greater customer intimacy, make product improvements faster, and deliver a better customer experience overall.
As a result, smaller vendors will continue to grow quickly and new CEM vendors will pop up.
The mainstream adoption of cutting-edge technology will redefine the CX landscape.
One of the most exciting technology breakthroughs in recent years has been the convergence of disruptive technologies like connected devices using the Internet of Things (IoT) and artificial intelligence (AI). These technologies have already made their way into our daily lives and increasing adoption means CEM solution providers must find a way to integrate these technologies into their platforms in a way that adds value today, but is also future proof, ensuring customers continue to benefit from next-gen technology.
AI will continue to impact the way retailers engage their customers. From chatbots and ultra-personalization, to the way internal processes are handled using triggers and alerts that become smarter and more effective over time. To maximize this technology, retailers will need access to these robust features within their CX platform.
Retail chains with multiple locations in particular, will benefit significantly from vendors who have integrated IoT technology into their CEM platform. Smart sensors at individual store locations send valuable information related to traffic patterns, store temperature and even noise levels directly into the CEM platform, giving new meaning to a true 360-degree view of the customer experience. By leveraging IoT technology, retailers will better understand how their physical location environment correlates to customer experience, shopping behavior, and revenue.
2019 will see three major changes that will shake up the customer experience management market. First, the way organizations manage customer experience will transition from reactive problem-solving to proactive prediction and prevention of issues. Next, we can expect to see more acquisitions following a number of high profile acquisitions over the past year. And finally, disruptive technologies like machine learning, AI and IoT will become further ingrained in CEM platforms, particularly for bricks-and-mortar retailers.
Make no mistake – 2019 will be an exciting year for the CEM market, but technology providers will need to step up their game in order to bring truly innovative and collaborative solutions to the market.
Alyssa Hanson is the marketing manager at Intouch Insight. To get more actionable strategies on how to move from customer listening to customer understanding with your VoC programs and other CX strategies, sign up for your free copy of the Customer Experience Whitepaper: Designing a World-Class CX Approach.