It’s undeniable that 2022 has been a challenging year for businesses everywhere. The repercussions of COVID-19 and political uncertainty have been key issues over the past 12 months. Unfortunately, experts believe the cost of living will rise further in 2023. This is likely to cause an economic crisis akin to the crash of 2008.
Despite these challenges, businesses have thrived and will continue to thrive. Companies have undergone complex business and digital transformations to adapt to the ‘new normal’. In such a tumultuous climate, innovation is paramount.
Digital elevation of customer experience
The convenience and ease of shopping online has won customers over. 40% of adults say they enjoy shopping in stores a lot less now than before the pandemic. However, the benefits of seeing products in person, particularly with new, unfamiliar brands, can often sway consumers.
Companies have responded by developing more immersive experiences, either purely online or phygital. These are to meet the needs of both online and in-person shoppers.
For example, virtual try-on technology has now been deployed for optical glasses. It assesses a user’s face shape to make recommendations and then allows them to try on different pairs. Alternatively, 6th Street‘s phygital store amplifies CX by merging the benefits of physical and online shopping and removing the sticking points, such as long queues and limited inventory. Customers can browse a large selection of items on a tablet and then try on selected products physically in the changing rooms or digitally through interactive screens.
Differentiating innovation
Businesses have been forced to take action to stay relevant in a highly competitive market, where the pace of change is rapid and customer expectations are high. The best way to differentiate and keep existing customers engaged is to innovate.
One such example is Garmin. Since its foray into wearable technology, many brands are now competing for a piece of its market share. It is estimated to reach around USD 392.4 billion by 2030. Most fitness technologies now use similar technology to capture heart rate and steps, for example.
Garmin, however, has been able to differentiate itself. They leverage data to continuously generate insights and personalised recommendations to support users’ fitness journeys, which are frequently enhanced. They’ve also limited manual information input – with wearables now able to detect and record specific exercises.
Transformation trends in 2023
Many of the challenges in 2022 will continue into 2023, amplifying the need for technology to meet customer expectations and fulfil business needs. We’ve also experienced consumers using social media to hold organisations accountable for sustainability and social factors. Leveraging digitalisation, finding new ways to demonstrate social responsibility, and creating stability amid uncertainty are among the top priorities for businesses.
How will these challenges inform company transformations this coming year?
The positive impact of digitalisation
Digitalisation will be combined with prioritising positive impact, such as achieving diversity and inclusion goals across industries.
Many companies are testing the use of Web3 to elevate their CX. Web3, at its core, supports inclusivity. Its mission is to decentralise innovation, particularly around AI and VR, by putting the power in the hands of content creators rather than the few. Immersive technologies like these open up access to many previously excluded categories of people, including those that are neurodiverse. This builds up a brand’s customer base.
Stabilising through data analysis
With uncertainty being the only certainty, businesses are utilising existing data to mitigate the impact of, and benefit from, economic and political disruption.
At the core of this is the use of big data – to predict challenges, make decisions and mitigate against speculation. These insights into future problems and how best to respond to them allow businesses to adapt. For example, companies looking to meet high demand during volatile periods may consider strategic partnerships or acquisitions to limit supply chain disruptions.
Predictive analytics and the automation of responses to changes through prescriptive analytics are becoming essential for many organisations.
Social responsibility
Integrity and authenticity will affect the bottom lines of businesses. Consumers expect brands to not only take a stand, but to live up to it. Therefore, companies must start incorporating solutions that fit their audience’s lives. This means being vulnerable, transparent, and curious about customers’ lives beyond a product or service they buy.
Also, campaigns related to social causes like environmental sustainability will need supporting research and evidence. Bodies that are dedicated to fighting green-washing will validate their statements, and customers will hold them accountable through social media.
In fact, in the upcoming year, social media will continue to cement its place in the consumer’s minds as the go-to place to call out a brand that isn’t socially responsible or acts in an unethical way.
Coming into 2023, businesses have the opportunity to extend their social impact efforts using digitalisation, stabilise in an unstable environment by having a data strategy and build loyalty with consumers by authentically supporting causes. This will only build upon the success experienced in 2022 as businesses reorganised their operations, revitalised their people and better served their customers.