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

This week, we’re looking at the results of last weekend’s Black Friday sales and what they mean for customer loyalty, the significance of business experimentation, and updates to CX debt. 

Key news

  • It’s been one year of changing the world! Yesterday, ChatGPT celebrated its first birthday. Since its creation,  generative AI has rapidly emerged as a dominant solution category in the AI arms race. In November 2023, the co-founder of OpenAI, Sam Altman, stated that the tool had reached 100 million weekly active users.
  • In a bid for sustainability efforts in cutting down one-use plastic packaging waste, product refill offerings are increasingly common in retail, especially for beauty and cosmetics. Dedicated refill and zero-waste shops on high streets often sell soaps, shampoos and shower gels, while retailers such as Lush and Charlotte Tilbury incentivise returning old packaging to stores to be reused. However, according to a Vogue Business report, brands still struggle to persuade clients to buy, return or dispose of refillable jars and tubes.

Commentary news share: Survey reveals that UK consumers are turning to AI chatbots for stress-free holiday shopping

“With the ongoing cost-of-living crisis and high inflation rates, two in five UK adults are relying on credit cards this holiday season, suggesting consumers might be ‘stress shopping’ in the run up to Christmas. 

46% of UK shoppers are likely to give up their personal data to AI platforms and chatbots to find the perfect holiday purchase. 38% would entrust AI to find the best price comparison during holiday shopping seasons. AI has the ability to provide personalised offers to buyers by analysing their previous spending habits and purchase decisions. As we approach Christmas, consumers are looking to find the best deals and discounts to help them save money in the long run. It’s clear they’re willing to use AI to help guide them. 

Customers are not only drawn to AI’s ability to scan the entirety of the internet, but also the speed at which it can do so. Fast and decisive AI-powered chatbots can alleviate online customer services, providing quicker solutions to customers. 

However, businesses can’t rely on AI alone to solve all of their customer queries, especially during busy periods like the run up to Christmas. 56% of online shoppers feel most comfortable about using chatbots to support online shopping when a customer service agent can also be contacted. Now, agents can work in tandem with AI to help customers with their more complex queries; leaving the chatbots to help answer quick and simple questions whilst offering the most seamless experience possible.”

-Eric Jorgensen VP EMEA at Zendesk

Black Friday sales weekend 2023 sees record number of shoppers

A record 200.4 million consumers shopped over the Black Friday weekend, through to Cyber Monday, surpassing last year’s record of 196.7 million. This is according to the annual survey by the National Retail Federation and Prosper Insights & Analytics. The figures surpassed NRF’s initial expectations of 182 million shoppers by more than 18 million.

Consumers utilised both online and in-store channels throughout the weekend, with 121.4 million people visiting physical retail locations to browse items and make in-store purchases. This figure is consistent with 122.7 million in 2022. Online shoppers totalled 134.2 million, up from 130.2 million last year. 

Black Friday continued its streak as the most popular day for in-store shopping, with 76.2 million shoppers opting to visit bricks-and-mortar locations, up from 72.9 million in 2022. About 59 million consumers shopped in stores on the Saturday after Thanksgiving, down from 63.4 million last year. On par with last year, 78% of Saturday shoppers shopped specifically for Small Business Saturday.   

Continuing the trend that started in 2019, Black Friday was also the most popular day for online shopping. Roughly 90.6 million consumers shopped online on Black Friday, up from 87.2 million in 2022. By comparison, approximately 73 million consumers shopped online on Cyber Monday, down slightly from 77 million last year.  

Does an increase in customer engagement during Black Friday weekend mean customer loyalty?

Analysis by SAP Emarsys Customer Engagement has revealed a 9% year-on-year increase in customer engagements delivered over the Black Friday weekend. Examination of billions of platform-driven messages during the period of November 24th to 27th reveals a significant increase in engagements across web push, SMS, in-app, and email channels. Below you can see how each platform performed during the Black Friday this year:

  1. Web Push – 74% increase
  2. SMS – 35% increase
  3. In-App – 15% increase
  4. Email – 10% increase

44% of shoppers expect to see personalised offers or discounts in exchange for their loyalty to a brand, and almost two in five (39%) remain loyal to retailers they buy from on Black Friday even after the sales finish. As such, the surge in omnichannel traffic over the Black Friday weekend represents a huge opportunity to drive customer loyalty.

However, the CLI also showed that “Incentivised Loyalty” – loyalty achieved through discounts and deals – plummeted from 71% to just 51% in the UK this year, proving that reduced prices aren’t enough for retailers to secure sales and long-term loyalty.

Given the sheer volume of online sales during the holiday shopping season and customers’ expectation of personalisation, both AI and the collection and analysis of customer data is becoming increasingly important in the priorities for forward-thinking brands.And it appears that brands are listening. There was a 20% increase in the utilisation of data-driven segmentation by SAP Emarsys customers, meaning shoppers were better matched with personalised offers and the items they wished to buy. With peak sending speeds of 126MM per hour, SAP Emarsys enabled its customers to reach their customers at scale and speed over the Black Friday weekend. Marketers were empowered to deliver the right deals – while adapting to market needs – to create value and grow loyalty.

The significance of experimentation for businesses in the next 5 years

Optimizely unveiled a new research report, “The Evolution of Experimentation” that delivers an analysis of the over 127,000 true experiments conducted between 2018 and 2023. With this report, Optimizely hopes to advance the practice of experimentation around the world by sharing valuable insights and guidance for digital practitioners.

The report reveals that since 2018, Optimizely has observed significant growth in the number of experiments its customers conducted, an uplift in the volume of companies experimenting, and a 227% increase in the usage of feature experimentation as a percentage of all experiments. While data shows broader adaptation of experimentation in recent years, substantial differences remain in the quality of experimentation occurring across the landscape. 

The results of the report underscore the value of a robust experimentation operation for any digital brand. The data shows initial ideas implemented by digital marketers are very rarely successful. According to the report, 88% of the ideas implemented by digital teams are not winners, meaning they do not result in a positive significant change in user behaviour. However, even if a test is not a winner, it provides valuable insights into customer behaviour and allows teams to eliminate guesswork and pivot quickly. 

Additional key takeaways include:

To be in the top 10% of experiment velocity, companies need to run over 200 tests annually.

  • The median company runs 3 experiments per month
  • Reaching the Top 10% of velocity requires scaling to over 16 tests per month
  • Only 3% of companies have joined the elusive 500 tests per year club

High and low performers exist in all industries, and all companies have the potential to improve their performance. The average experiment win rates by sector are: 

  • Food and Beverage: 17%
  • Automotive: 16.2%
  • Hospitality and Travel: 15.7%
  • Media and Entertainment: 15.5%
  • Financial Services: 15%
  • Real Estate: 14.4%
  • Healthcare and Medical: 13.3%
  • Sporting and Recreation: 13.2%
  • Retail and Distribution: 13.1%
  • Telecommunications: 12%

The CX debt is growing according to new research

The study of over 500 business leaders and 2,000 consumers from Amdocs company Stellar Elements, revealed a significant gap between the high-quality service that customers expect and the actual service they receive. Also included in the report Is a deep dive on QSR industry CX, with other industry analyses to come. The results highlight the detrimental effect of negative customer experiences:

  • 80% of customers consider alternatives after just one bad brand experience.
  • 73% show strong willingness to switch to brands with superior CX, even if they’re more expensive.
  • 72% spend more on companies that get CX right.
  • 80% recommend brands based on consistently positive customer experiences.
  • 50% disengage after four or fewer bad experiences.

While the culprits behind the growing CX gap are many, the company’s leadership has a lot to do with it — their myopic understandings of what CX entails (just 56% of execs consider brand experiences a key part of CX) and blasé attitudes about its significance (less than half of leaders think it’s very important to invest in CX) are putting their businesses at risk. Other key findings include:

  • 91% of leaders agree that CX is a critical revenue generator, yet only 44% deem investing in CX as extremely important.
  • 77% of leaders equate CX solely with customer service and support, while 78% tie it to product quality/service.
  • 60% of leaders see their current technology as a barrier to capitalising on CX opportunities.

Service, Integration, Communication, CX Perception, and AI Readiness emerged as the most urgent gaps in CX after leaders are educated on what they entail.

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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