Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we’re looking into research about UK subscription costs, the true effects of current technology usage on CX, growth expectations in the AI and tech era, and the upcoming peak season’s potential challenges.
Key news
- A recent study conducted by London Office Space has revealed the most common symptoms of burnout that Brits are likely to overlook, with insomnia, detachment, and exhaustion ranking top. In today’s high-pressure environment, people are experiencing burnout now more than ever due to the pressure of juggling multiple responsibilities and maintaining performance can lead to a state of chronic physical and emotional exhaustion. Lack of motivation, lack of energy, forgetfulness and negativity also ranked in the top 10 symptoms.
- The NHS is planning to roll out an “artificial intelligence-run physiotherapy clinic” later this year, The Guardian reports, noting that the clinic will enable patients to have same-day virtual consultations with an AI-powered physio via an app. Flok Health is the first platform of its kind to be approved by the Care Quality Commission as a registered healthcare provider. Patients can be referred through a community or primary care setting, such as their GP.
- A record high 22.3% of UK adults aged 16-64 are “economically inactive”, meaning they are not in employment or looking for a job, according to the Office for National Statistics. The UK’s workforce supply problem has persisted post-pandemic, with long-term illness affecting a record number of Britons amid rising NHS waiting lists and mental health issues. This imposes a £39bn cost on the economy. Experts urge the next government to prioritise workforce health and reconsider reducing health-related benefits.
- X is making a big change to one of its key features. The social media platform will now hide most likes so users can “like posts without getting attacked for doing so,” chairman Elon Musk explains. The company first gave paid premium subscribers the ability to hide likes last year, casting it as a way to “keep spicy likes private.”
Brits now spend almost £700 on subscriptions every year
Despite high cost of living concerns, UK subscribers are now spending £696 on subscription apps and services every year — on top of standard bills such as TV, phone, and internet. 1 in 8 are paying more than £100 a month for their subscriptions, amounting to £1,200 per year. That’s according to a newly released European Subscription Wars report from Bango, which surveyed over 1,000 UK subscribers on their habits and attitudes towards streaming services and subscriptions.
Recent price hikes across the industry, including from the likes of Netflix and Disney+, are impacting subscribers — with almost half (45%) having recently cancelled a subscription due to price increases. Despite this, appetite for subscriptions remains high, with 60% of Brits saying they’d sign up to more subscriptions if they could afford it. This is despite already having 3+ subscriptions on average — more than Italy, France or Spain.
Britain responds to ‘ad tiering’
The Bango report also highlights the impact of ad-funded content in the UK. Earlier this year, Amazon Prime Video asked Brits to pay an extra £2.99 a month to remain ad-free, a move followed by Netflix earlier this month. According to the Bango data, 31% of UK subscribers have chosen to save money by downgrading to an ad-supported tier. In contrast, 23% have upgraded their subscription to avoid the ads.
But streaming and subscription providers should proceed with caution. Over a quarter (28%) of UK subscribers have ditched a subscription service entirely because ads were introduced. ‘Premium ad tiers’ are not welcome in the UK, with three-quarters (75%) saying that paid-for subscriptions should “never” display ads.
‘Super Bundling’ and Subscription Hubs
Faced with a growing number of subscriptions, the Bango report also suggests that UK subscribers are crying out for an all-in-one subscription platform. Over half (55%) would like all of their subscription services to be accessible within a single ‘content hub’, and the same percentage would like one app to manage all of their services and accounts via one monthly bill.
One in Five Retail Workers Say Current Tech Hinders Customer Experience
Scandit released the second installment of its research report, ‘Frontline Retail Revealed: Tech Pains and Gains.’ With store associates reporting more demanding customers post-pandemic, the research exposes key growth opportunities for retailers and establishes a critical link between technology, productivity, and worker and customer experiences, and the impact this has on profitability – especially for an industry with tight margins.
What store associates want from technology
The report asked 2,000 global retail store associates about the attributes they’re looking for in scanning-related technology. And the results are clear – respondents value tools that help them tackle inefficient or time-consuming tasks over more hyped technologies like AI, particularly when interacting with customers and when a sale is at stake.
Key findings include:
- When it comes to desired features for improving scanning features, half (50%) of respondents want features that enable scanning in challenging conditions, while 45% want faster scanning capabilities, especially in volume-intensive workflows like grocery stores (21% ranked it as their top priority) for tasks such as inventory management or price checks.
- Advanced capabilities like ID scanning (51%) and multi-barcode scanning (48%) are more desired than newer technologies like AI (35%). This suggests store associates value practical tools that reduce manual data entry and tedious tasks, especially given the number and frequency of items that need scanning.
- Across all daily tasks, technology is seen as most helpful for shelf management (84%), customer service (83%), and order picking for online orders (81%).
Global Enterprises’ High Growth Expectations in the AI-Era at Risk from Short-term Focus on Technology
Expereo released an IDC InfoBrief, commissioned by Expereo, Enterprise Horizons 2024: Technology Leaders’ Priorities on Their Digital Business Journey, which details insights from a survey of over 650 global technology leaders and highlights attitudes towards growth and investment as well as the key inhibitors to achieving these ambitions.
The survey results, published in the IDC InfoBrief, reveal that global organisations are optimistic about their business outlook for the next 12 months, with 81% of technology leaders expecting to see moderate to high growth in this period. The role of technology in helping deliver that growth has reached new prominence, driven by the pace of AI adoption. However, the survey reveals major obstacles that must be overcome for technology to fully enable growth priorities, notably the emergence of a short-term, opportunistic attitude to technology planning.
Technology’s Role in Business Growth Strategies
When asked about their business outlook for the next 12 months, 52% of global enterprises expect to see moderate growth and a further 29% expect high growth. The ability of technology to help deliver this growth has never been higher on the agenda, with almost a third of technology leaders (29%) saying growth (to increase revenue and/or expand into new markets, segments, and/or geographies) is in their top 3 priorities driving tech investments in their organisation. In addition, the top priority of technology leaders is now to contribute to business growth / increased turnover.
Short-Termism Putting Growth Ambitions Under Threat for Many
However, only 22% of global enterprises have reached full digital maturity – a scenario where a long-term digital business strategy is in place and there’s an orchestrated enterprise-wide digital-first trajectory. The reality is that most of global organisations are still working on opportunistic and short-term digital plans with isolated and siloed digital excellences across IT and Business units.
In fact, a third (33%) of global enterprises admit to having a short-term focus, meaning digital strategy and initiatives are enterprise oriented but typically have a short lifespan. Interestingly, there are more than a quarter of global respondents who say whilst the CEO supports digital initiatives, they do not work closely enough with technology leaders, putting digital transformation initiatives in jeopardy.
Digital Maturity Vital to Meet Challenges Ahead
The range of challenges identified in the survey reflects the mix of technical, economic and cultural factors that technology and business leaders face today.
When asked what the biggest risks or inhibitors are to their growth ambitions over the next 12 months, 38% of global respondents cited geopolitical issues as potentially affecting either their business or their technology providers. This is followed by inflation (34%), economic uncertainty (32%), uncontrolled spending by lines of business (31%) and performance of networks /connectivity globally (30%).
When asked about serious challenges to executing the digital initiatives aimed at enabling growth, IT integration complexity (41%), partners’ capabilities (40%), lack of regional expertise (35%) were identified.
Increased automation, enhanced cost containment and efficiencies, and greater innovation seen as key growth enablers
When asked how their organisations were planning to deliver global growth over the next 12 months, the number one driver is via increased automation for almost half (49%) of respondents; a further 60% agree that automating business operations and processes is now considered important or extremely important. Additional growth initiatives include an increased focus on cost containment and efficiencies (44%) and increased innovation (39%).
AI is the number one technology investment priority globally
42% of respondents named AI as their number one technology investment priority, narrowly beating security (37%) and cloud or multicloud networking/ connectivity (35%). 31% of global respondents believe AI/ML will be critical to fulfilling business ambitions, a further 60% say it will be important.
Shipping challenges: preparing for peak season amidst rising costs and delays
As the global economy grapples with fluctuating shipping costs and logistical challenges, retailers and Kickstarter backers are bracing themselves for a turbulent peak season. The past few years have seen significant disruptions in sea freight, a traditionally cost-effective method for transporting large volumes of goods. The industry has yet to recover fully from the setbacks caused by the COVID-19 pandemic, compounded by geopolitical tensions and ongoing supply chain issues. Visualsoft has analysed data on the issue and shared their findings and recommendations for retailers.
Shipping costs on the rise
Freight rates hit their lowest in October 2023, with a 40-foot container costing only $1,342. However, by May 2024, rates soared to a record high of over $4,200, despite a downward trend from the January peak of just under $4,000. This increase reflects the global supply chain’s fragility, where even minor disruptions can have far-reaching effects.
Impact of global events
The COVID-19 pandemic led to numerous halts in the supply chain, severely affecting container shipping. The industry continues to struggle with port closures, congestion, labor shortages, and a lack of new shipping containers. Additionally, the conflict in the Red Sea, particularly attacks on containerships by Houthi rebels, has further escalated shipping costs. Ships now require additional protection or need to be rerouted around Africa, adding over 10 days to the journey and increasing crew costs, which are then passed on to consumers.
Brexit and customs delays
Brexit-related issues have further exacerbated the situation, causing customs clearance to be slower and more complicated. With about 17,000 ships passing through the Suez Canal annually, any disruption in this route, which handles approximately 12% of global trade, results in significant delays and port congestion.
Challenges for retailers
These compounded issues mean that products are arriving in the UK at a slower rate, making it difficult for retailers to keep shelves stocked. This challenge is particularly critical as the industry prepares for the peak season, including Black Friday weekend. Running out of stock during this crucial period could significantly impact sales and the overall success of the trading season.
Preparing for peak season
Given these challenges, it is imperative for retailers to start planning for peak season now. Key strategies include:
- Creating additional warehouse space: to store bulky items ahead of time.
- Forecasting stock levels: identifying potential high-demand items to ensure sufficient stock.
- Adjusting for increased costs: preparing for potential price adjustments to accommodate rising shipping expenses.