Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we celebrated Micro, small and Medium sized enterprises day on Tuesday. So, we’re today looking at new research about small businesses with AI and Gen Z. There’s also news on consumer online shopping forecasts.
Key news
- A total of 88% of household goods consumers have changed their spending behaviour since the start of the cost-of-living crisis in an attempt to cut back, according to a Capterra UK survey. In the study, Capterra UK surveyed 1,006 household goods consumers in the UK to understand how inflation has impacted their spending habits. The study reveals that significant cutbacks have been made on clothes (72%), groceries (66%), and bars & restaurants (66%). In addition, a proportion of consumers have reduced spending on entertainment & culture (62%), electronics (56%), beauty & sanitary products (54%), and domestic appliances (52%).
- Gartner’s eighth annual Women in Supply Chain Survey surveyed 225 supply chain leaders. The survey showed that women now make up 41% of the supply chain workforce, up from 39% in 2022. However, frontline representation continues to lag, with women filling just 31% of these roles.
- Salesforce have released data revealing that over a third of UK workers are already using or planning to use generative AIin their jobs. 62% of these workers, however, say they lack skills to use these technologies accurately and safely. While these workers rank better service for customers and the potential to save up to 3.5 hours per week on tasks among the benefits of using generative AI, they are wary of trust and security risks.
Small businesses missing the critical link with Gen Z
New research by FM Outsource has found that small businesses are risking their success by failing to win the hearts of Gen Z customers. The Small Business Customer Service in 2023 research looked into what customers want from small businesses and what they’re actually offering. Despite reservations from Gen Z, the research revealed older generations have more confidence in the capabilities of small businesses. An impressive 60% of consumers, aged 55-64, believe they can offer the same service level as well-known brands.
38% of Gen Z require a wide range of channels to provide a good quality customer service experience. Yet, small businesses are not meeting this expectation – over two fifths of young people believe they are contactable across fewer touchpoints including social channels and email. Comparatively, older customers are less concerned with only 21% expecting numerous contact channel options.
The discerning customers of today also think smaller brands are not as accommodating when it comes to the availability of customer service, with 33% believing so. Despite Gen Z making up 40% of the global consumer population, small businesses are failing to capitalise on their spending.
How do small businesses use AI?
ScoreApp has conducted a survey revealing that 59% of UK small businesses are already using AI in some form, while 23% plan to do so in the near future. The survey involved 1,000 businesses across various sectors and sizes. 68% of which were small businesses with 1-4 employees, and 31% of which have been operating for more than 10 years.
Small businesses play a crucial role in increasing employment rates and maintaining the overall health of the UK economy, as they employ around 16.4 million people, according to FSB. Amidst the current doom and gloom ever-present in the media, small businesses may be the answer to stabilising our economy.
The use of AI in small businesses is a growing trend, as seen in recent surveys conducted by American Express, GoDaddy, and Forbes. These surveys highlight the opportunity for small businesses to leverage AI to improve their marketing, customer service, product and service offerings, operations, cybersecurity and fraud management.
ScoreApp’s survey results provide valuable insights into how UK small businesses are not only aware of the benefits of AI, but are already embracing this technology to improve their agility and drive growth and success.
Two-thirds of global consumer spend predicted to be online within the next decade
Shoppers now envision a future where nearly 64% of their shopping will be online in the next 10 years. Brands are closing the gap on marketplaces with online spend doubling through direct-to-consumer (D2C) channels, from 7% in 2022 to 14% in 2023. Brands should look to review their online sales models, with 58% of global shoppers saying they like to buy from branded marketplaces.
Wunderman Thompson Commerce and Technology’s Future Shopper Report 2023 surveyed over 31,000 consumers globally on their current and future shopping habits. Online shopping continues its dominance by accounting for 58% of all spend. Although we may be seeing a point of maturity, with a modest 1% increase in overall online spend compared to last year.
Despite the omnipresence of marketplaces such as Amazon, Alibaba, and Mercado Libre, their combined share of 35% in global online purchases remains unchanged from the previous year. However, they still top the list when it comes to where shoppers purchase. In second place we see supermarkets and grocers at 15%, followed by branded websites at 14%. But don’t discount marketplace growth yet! Consumers’ trust in these vast online ecosystems extends well beyond shopping. 42% were open to using dating apps, and 51% were comfortable purchasing energy, water and utilities, provided by marketplaces.
60% of shoppers say they prefer to shop with brands and retailers that have both physical and digital stores, making a strong case for omnichannel strategies. Working from home (WFH) may be impacting purchase behaviours too, with 66% of global consumers saying that they spend more time researching their purchases due to WFH. 65% stated they have discovered new brands and retailers due to WFH.
No matter what channel consumers choose, the cost-of-living crisis continues to sway decision-making. Price is commanding the loyalty of over half (56%) of global shoppers. 53% are willing to switch allegiances between retailers and brands for a better price.
Nevertheless, it isn’t all about price, as 23% of consumers expect their products to be delivered in less than 2 hours. And given that 19% of everything ordered online is ultimately returned, free and easy returns are a key battleground. The stakes are high for retailers and brands to get it right. 51% of consumers are prepared to abandon those that fail to meet their expectations for a seamless omnichannel experience.
Thanks for tuning into CXM’s weekly roundup of industry news. Check back next Friday for the latest updates of the week!