Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.

This week, we’re looking at budgetting over the festive season, and two insightful  2024 trends reports from Quantum Metric and Qualtrics. There’s also a new report on data distrust.

Key news

  • According to FullStory, 63% of digital experience professionals say their experiences are being let down by poor and outdated technology. Almost a third of DX professionals (30%) say that siloed tools and disjointed data are causing multiple teams to replicate work, wasting time and leading to disconnected customer experiences.
  • Despite the cost-of-living crisis, nearly half (43%) of UK shoppers describe themselves as impulse shoppers, and 53% they love ‘retail therapy.’ These findings are part of a new report from Blackhawk Network (BHN) and show that despite rising economic pressures consumers still can’t resist a shopping spree.  
  • Ecommerce businesses across the UK are spending record amounts on advertising as they hope to make the most of Black Friday sales. Juni’s data shows that ecommerce businesses had a remarkable 220% increase in median spending on advertising in September, when compared to the same time last year. 

Brits budget for a tight Christmas, as ads prioritise festive spirit

As the country prepares to enter its third year of the cost-of-living crisis, over half (55%) of Brits believe their Christmas’ are set to be impacted by tighter purse strings. 

Surveying 2,000 Brits across the country, Zappi has revealed that households are planning to tackle the cost-of-living crisis head-on by taking a pragmatic approach when it comes to their Christmas shopping this year.

Nearly half (46%) said they are planning to spend less on gifts this year than last year, while just 10% plan to spend more on gifts. Consumers plan to prioritise deals and promotions (38%), shop more at discount stores (33%) and begin shopping earlier than in previous years (21%) to cope with rising costs.  Designer brands are likely to be impacted as well. When asked about how inflation will impact their shopping from designer brands, 41% said they will shop less from designers. 

Gift giving is not the only area where consumers are cutting costs. The cost-of-living crisis is also being felt around the dinner table this Christmas. Over a third of households admit they are aiming to cut food costs (38%), spread their food shopping over a few weeks to ease costs (37%) and shop around multiple retailers for the best food prices (40%). 

The good news is that despite the economic challenges this holiday season, more than three-in-five (60%) are excited about the holidays, compared to just 15% who aren’t.

Brands reignite the Christmas spirit

With festive ad campaigns now underway, brands need to make sure they acknowledge the economic challenges consumers are facing, while still delivering that feel-good holiday spirit. 

When asked what resonates with them, Brits said they prefer Christmas ads that show acts of kindness (47%), family & friend togetherness (45%) and tradition and festivity (44%). This is reflected in the response to this years’ adverts, with Zappi research finding that Aldi and Amazon’s budget-conscious but heartwarming ads were the best received by viewers*.  

The good news is that just 38% of UK consumers believe that holiday ads are released too early. When asked about the ideal time brands should release their holiday adverts, 31% of UK consumers said early November was the best time. This matches closely with the start date of their own holiday shopping, with 32% also picking early November. 

Comparatively, 58% of Brits think brands release holiday products in stores too soon and 47% think brands begin talking about the holidays too soon. 

Majority of digital leaders are underprepared for the rise of AI  

Quantum Metric announced the findings of its 2024 trends report, “4 Big Digital Bets for 2024,”which surveyed digital leaders to uncover their biggest priorities heading into the new year. Findings that emerged pertain to artificial intelligence (AI) investments, digital experience and mobile trends, employee experience becoming an increased priority and the changing tides of customer loyalty programs and personalisation.  

Digital leaders haven’t fully committed to AI adoption  

Although AI investments are on the rise, some digital brands haven’t taken the leap with; 35% of digital leaders either waiting to see how the tech progresses or having no plans to pursue AI in the near future. Quantum Metric’s data found that 59% are overwhelmed by the amount of AI tools available and 33% know AI has value but aren’t sure what it is yet.  

Added to this, the majority of digital leaders agree that AI regulations are coming and they are underprepared; 61% anticipate new AI regulations to impact their investments, 51% say new regulations will make investments more complex and 30% feel a lack of visibility into how customers use AI will make it harder to meet new regulations.   

Mobile will continue to gain traction as the first touchpoint  

Social media ads and features like live shopping have made mobile the first touchpoint according to 66% of digital leaders. The survey showed that 48% of leaders say social media ads have grown mobile traffic and conversions in the last year, 20% say live shopping is driving mobile traffic and conversions and 38% say social media will drive mobile adoption in 2024. As mobile adoption grows, digital has become part of the physical brand experience with 55% believing that digital will drive almost all business to physical locations by next year. 

The employee experience will become a priority investment 

Hiring is expected to rise in 2024 with 75% of digital leaders expecting to increase staffing for their teams. In an effort to double down on the customer experience while also improving the employee experience, 57% of digital leaders will increase staff for customer-facing teams (e.g. call center, gate agency, in-store associate, etc.).  

The right investments in employee experience will be critical, but 48% of digital leaders say there isn’t enough prioritisation on backend tools. As a result, this leaves the employee experience with major gaps which can have detrimental effects on revenue. In fact, 30% say gaps in the employee experience have made a noted impact on company revenue and the ability to convert new audiences into loyal shoppers. 

Qualtrics announces top CX trends for 2024

The 2024 Consumer Experience Trends Report from Qualtrics has been released. The study found that as AI becomes a bigger part of daily life, consumers are putting a higher value on human connection. They’re rewarding brands that deliver exceptional digital support with their dollars and lasting loyalty.

Qualtrics asked over 28,000 consumers in 26 countries around the world about their expectations and what companies should do to win and keep their business. The findings reveal that consumers are sharing less direct feedback and they are frustrated with the customer service they receive while shopping on websites and apps.

The report identified 4 key trends that will define the consumer experience in 2024: 

  • Human connection is the foundation of a winning AI strategy
  • Great service beats low prices in the battle for customer loyalty 
  • Digital support is the weakest link in your customer journey 
  • Consumers don’t give feedback like they used to, so companies must listen in new ways

The challenge for brands in 2024 will be identifying the tasks AI does and doesn’t do well and aligning those capabilities with consumer preferences. 73% of consumers are comfortable using a brand’s automated system for simple, transactional activities like checking an order status. However, they are averse to using it when the stakes are high—only 19% of consumers would prefer to engage with a chatbot or self-service channel for advice on a medical issue.

Despite rising prices and the risk of inflation, price will not be the primary driver of consumer purchase decisions in 2024. Consumers say that organisations that provide excellent customer service are more likely to gain their repeat business, with customer service and support ranking above low prices when it comes to the top drivers influencing consumer purchase decisions. Only product quality ranked higher. 

UK-specific data:

A winning AI strategy hinges on human connection

  • 35% of consumers comfortable using AI 
  • 65% of consumers prefer human service channels
  • 35% of consumers prefer digital channels
  • 11% prefer engaging in chat w/automated system or self-service channel to receive advice from a nurse/doctor about a minor issue

Consumers are saying less… so you better be listening. Purchase drivers in 2024 are set to be:

  • Product & service quality – 61%
  • Customer service support – 47%
  • Low price – 53%
  • Easy digital experience- 12%
  • CSR – 27%

Data distrust: Growing concerns over brands’ use of data and AI

As global leaders gathered in the UK last week to discuss the future of AI Safety, new data from Braze reveals consumer trust is low when it comes to brands collecting and processing their data.

Only half (53%) of consumers are confident that companies will use their data responsibly and over a third (38%) saying they’re not comfortable with AI technology such as ChatGPT being used by brands to create a more personalised experience, compared to just 29% who are comfortable. This is at a time when 61% of marketers claim to be using AI in their marketing activities.

At a time when marketers are looking to harness first-party data ahead of Google’s cookie phaseout in Q1, the data shows consumers’ lack of trust is driving them to withhold their information from brands online. Nearly three-quarters (71%) say they are most likely to click ‘Ask App Not to Track’ when visiting a mobile app, and 22% of mobile website visitors reject requests for their data to be tracked online.

The study also reveals that this reticence to share data could stem from a lack of consumer understanding. Just a quarter of consumers say that when they use websites or apps that request their permission to track or collect data they have a good understanding of what they’re consenting to.

However, the report also reveals a huge opportunity for brands that build trust with their customers around data collection. The majority (70%) of consumers are willing to share personal data with brands in exchange for a highly personalised experience. And a third (33%) will prioritise brand trust and product quality when they make a repeat purchase from a brand.

Thanks for tuning into CXM’s weekly roundup of industry news. Check back next Friday for the latest updates of the week!

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