Though digital disruption started way before the pandemic, the trajectory of digital adoption shot up significantly since the onset of the pandemic. Enterprises are competing in an era of shifting digital experience paradigms.
The cost aspect of digital adoption
Enterprises need to view the cost question of investing or adapting to digital the other way round. What's the cost of not adopting digital transformation? Among the many costs of not going digital, here are the top 3: 1) talent costs, 2) cost of customer analytics, and 3) marketing costs.
Gen Z and millennials make up the majority of today's workforce. In the US, the most diverse generational cohort is the millennials. They surgically grew up with digital, and they're drawn to organizations that embrace a digital culture. Not investing in digital means not attracting the right talent.
Insights act as the lifeblood of a brand to understand the shopper and customize services to that shopper? Enterprises that don't invest in analytics are forfeiting all the valuable data and insights about today's shoppers. Relevant customer insights offer opportunities to drive sales.
- Companies that invest in the digital space for marketing realize how cost-effective it is to connect with interested shoppers and analyze the ROI from those consumers.
Investing in digital is now table-stakes to compete and drive up revenues.
Let’s take a look at the shifting paradigms.
1. Demographic consumption patterns
A qualitative and quantitative view from a consumption standpoint reveals that the age demographics are progressively going down. Research by Forbes and Hubspot indicates points around the lower twenties (15—20 years). Despite these indicators, consumers even below this age group tend to be savvy digital shoppers who know what product to get from a specific aisle of a particular supermarket. CDO’s and data gurus need to recognize the new demographic pattern. Understanding this trend helps enterprises build stronger relationships via “direct to consumer” campaigns.
2. Subscription commerce
The digital shifts toward subscription commerce and customer-centricity embraced by Amazon and Apple back in the year 2000 are rampant across industries. Consumers don’t want to go through many steps and discussions to get started on a subscription. Enterprises need to build their products and services so that it won’t take a consumer more than 15 minutes to sign up and get started.
3. Simplifying experiences
The easier it is for customers to shop, the more often they buy—and this is likely to enlarge their future shopping carts. Consumers want process simplicity and concise content to absorb. Everything from paying bills to getting a quotation needs to be digital. Retailers have known for years how to make shopping experiences convenient for customers and drive top-line growth. In the physical world, retailers have made massive investments in making it easy for customers to shop in different store formats (supercenters, small mid-size markets, convenience stores, etc.) and invested to suit various shoppers. Similarly, digital investments are making online shopping easier. Store pick up, curbside service, locker storage pick up in the store, home delivery, delivery through national services such as FedEx and UPS simplify experiences.
4. Customer-centricity modelling
A shift in customer-centricity modelling is the profiling of customers to route different customers in different ways. For example, classifying customers based on their purchase volumes and patterns is way to guide them in a specific path. This type of modelling is also becoming a common practice to serve customers better. Customer-centricity modelling is the definitive guidepost for 2021 and beyond.
5. Omnichannel is a differentiator
A differentiating factor is going to be how brands can speed up the shift to omnichannel. For example, retail stores should fulfill the customer’s order in whatever way they place the order. Companies can differentiate their CX by resolving queries via an intelligent chatbot instead of putting customers on hold. Integration of the marketing technology (martech) stack with other processes and applications ensures seamless experiences and acts as a competitive differentiator for the service provider.
6. Cohesive & frictionless experiences
This point ties back to the earlier point on simplifying experiences. A cohesive experience is vital to make shoppers feel special and make them come back for repeat purchases. Retailers with a physical and online presence are leveraging each presence for the benefit of the other. Walmart is implementing “wayfinding” on its mobile app to make it easier for customers to go to the right shelf and find the product they’re looking for. Online grocery shopping and pick up is another Walmart example where customers create their online kitchen table, submit their order, and drive to the store to pick up their items. Even before customers stop or park their vehicle, customers can see the store employee waiting outside to load groceries in the car. No more waiting in queues inside the store.
7. Data science drives next-best action
The last point is how data science offers timely interventions. Online learning companies use data from their Learning Management Systems (LMS) to find out lapses in students’ learning experience. A drop in grades despite high course participation rates is an instance where data science offers timely interventions to help students perform well. In every industry, the last 5 years witnessed a mind shift of using data from the perspective of “what brands want” toward “what do customers want.” Business outcomes are by-products of intangible attributes such as brand stickiness, relevance, personalization, and frictionless experience. Data science supports the intangible value of customers embracing the brand.
Companies need to take a cautious and balanced approach to use customers' information in leveraging data analytics. Customers may not consent to use their data. Legalities, regulations, and compliance play a significant role. Customer experience should never be at the cost of data privacy and legal consequences.
Unsurprisingly, CSS Corp’s webinar poll on “what’s the top driver for rapid digital adoption?” saw 62% of attendees attributing it to the pandemic; 17% chose cloud and another 17% attributed to the usage by gen z; 3% said the driver was the cost of digital infrastructure.
Whatever be the reasons: pandemic, cloud, or gen z—shifting digital experience paradigms present opportunities for enterprises to differentiate and compete on CX.