In response to the COVID-19 outbreak ServiceNow’s CEO Bill McDermott said “the world will never go back to the way it was” and Microsoft 365 VP Jared Spataro said “we’re never going to go back to working the way that we did”. These guys were referring to customer experience (CX) applications. What were they getting at?
Firstly, we will get used to working from home. Using Teams, Slack and Zoom and similar tools our home personal productivity will increase rapidly. Prestige offices in central London can cost enterprises £40 million to rent every year, and senior managers are already questioning their merit and ROI. From an employee experience perspective, not having a command-and-control boss looking over your shoulder to micro-manage your work will result in a feeling of greater empowerment and more continuous customer experience innovation – which research shows is exactly what senior managers want.
Second, COVID-19 will accelerate the shift from face-to-face interactions towards omnichannel digital communications. No big surprise that Adobe just reported a massive 33% increase in demand for its ecommerce products since the COVID-19 outbreak started. Buying online rather than in shops will hasten the demise of the High Street as we know it. But enterprises had better invest in best-in-class, Amazon-like digital tools – consumers are no longer tolerant of poor digital performance. A third of all consumers will desert their suppliers after just one sub-standard digital customer experience.
Third, we are going to have stronger and more direct relationships with our preferred brands. Consumer goods companies are choosing Direct-to-Consumer (D2C) digital channels over traditional retail channels. For example, D2C sales now accounts for 10% of Unilever’s revenues, with ecommerce sales growing by 47% in 2018 to €2.5 billion. Nestle, Kellogg’s and Nike all have well established D2C plays. P&G just acquired D2C women’s razor subscription company Billie for $35 million for exactly this reason.
In October 2019 Nike hired John Donahoe, the ServiceNow CEO and ex-CEO of eBay as its new President and CEO. Nike considered Donahoe was “ideally suited to accelerate our digital transformation and to build on the positive impact of our Consumer Direct Offense”. The battle for our digital attention is already here – just look at the online TV media and content war between Netflix, Amazon, Disney et al.
Forth, we are going to have deeper and more emotional personalised engagements with our chosen vendors. The move to digital channels makes us more easily identifiable and trackable from the data streams we leave behind us. GDPR and the demise of cookies make things a tad more difficult, but this is to the advantage for our preferred brands who can harvest and augment our 1st party data. Savvy marketers know emotionally engaged customers are 2X more valuable than satisfied customers, and by 2025 IDC predicts that ‘60% of leading brands and retailers will enhance customer engagements using emotion detection and management to influence purchasing’. Emotion tech is real and it’s happening.
In summary, COVID-19 will speed the move digital omni-channel experiences to profoundly impact our relationships and behaviours at work and with our suppliers. Before COVID-19 a PWC study revealed ‘on average, business leaders estimate that 5 years from now their companies will need to operate one-third faster than they do today to remain competitive’. This may now be an under-statement.
Recommendations for Tech Marketers
Marketers in tech vendors are advised to think strategically, beyond the operational challenges of the current crisis to anticipate the future customers’ need for smart personalisation, emotional engagements, and customer adventures. These three pillars form the research and analysis focus of IDC’s European Customer Experience Management Strategies program. Check out our latest thinking on CX, digital trends, innovation, and the future customer for free here.
If you want to learn more about CX or have any questions, please contact Gerry Brown or head over to https://www.idc.com/eu and drop your details in the form on the top right.