2021 Predictions: The road ahead for customer experience
The roller coaster ride of 2020 dramatically changed how we think about engaging and connecting. Businesses have had to rapidly adapt with new models, employees have adjusted to new ways of working and collaborating, and consumers have become more deeply entrenched in all things digital.
Like most people, we’re ready for a fresh new year. Time for our annual trendspotting on the road ahead! What will 2021 look like? We think it’s all about Digital in our 2021 customer experience predictions.
7 Trends to Watch in Digital-first Customer Experience
2020 took the slow, steady, evolution of digital transformation and turned it upside down. Banking, retail, entertainment, restaurants and more learned that digital capabilities are about much more than differentiating — they help you adapt to overnight changes in consumer needs and market realities.
In 2021, digital-first experiences will become preeminent, as legacy business models are jettisoned. Born out of necessity during the pandemic, restaurants and retail jumped on digital ordering and curbside contactless payments. Hollywood studios retooled distribution to focus on streaming first-run movies. And financial institutions saw a 200% surge in new mobile banking users in the early months of lockdown, and an 85% rise in mobile app usage.1
These dramatic shifts to digital won’t fade, they will escalate. To keep pace with changing expectations and conditions, creating and optimizing digital experiences will take the top spot on corporate agendas in the year ahead. Here are our 2021 predictions on how digital-first customer experience will dominate the horizon.
1 — Hyper-personalization will be the new standard
The events of 2020 forced dramatic increases in digital commerce, and that growth comes with rising consumer demand for contextual, personalized experiences. Gavin James, a CX consultant and Beyond the Arc’s Creative Director, thinks more businesses will follow the lead set by tech giants:
“Apple and Google excel at hyper-personalization. Banking and retail companies will need to substantially up their game to stay competitive. Consumers want a digital experience that knows their habits, preferences, needs and even location, so interactions are seamless and offers are directly relevant to them. Personalization will be a key driver to attract and keep millennials and Gen-Z consumers, and a critical path for profitability: personalizing the (banking) customer journey can drive a 10-30% increase in revenue.”2
David Jeong, a data analyst adds:
“People want to feel like the app they’re using is tailored to them, and using AI and machine learning within apps could fulfill that role. It could detect the best time to deliver a special promotion to capture the customer’s attention.”
Personalization will also factor into customer retention. Michelle Espinoza, a designer, notes:
“Unsatisfying experiences are driving a higher percentage of customers to switch to non-traditional providers. Gen-Z will increasingly use financial services from big tech for digital convenience and personalized engagement. They would rather sign up from their couch than visit a branch, and they want everything better, faster, and made for how they live.”
2 — Machine learning & AI will be essential for contextual experiences
As our resident expert in machine learning, data scientist Bruce Johnson expects the winners will be those that master contextual insight.
“Initially, customer experience AI was used for cost reduction, such as automating call centers and technical support. Now AI is stepping into our daily experiences, but getting it right depends on understanding context. Large companies will forge ahead using their own internal data, but that limits the creative responses of AI. If only known issues are used for training data, then only known problems can be solved. While the largest tech companies like Google will continue to have an advantage because they have the biggest pools of training data from multiple sources, companies of all sizes will have to make use of their own underutilized ‘dark data’.”
We can also expect more AI during in-store shopping, says Jacqueline Espinoza, a CX consultant.
“Retail shopping has mainly been functional, not an ‘experience’ – but consumers expect more now. Particularly at large retailers like Target, we’ll see connected devices similar to smart-speakers like Alexa, where customers can ask questions such as, ‘Spot, where can I find dish towels?’”
AI will surface more in healthcare as well, driven by the need to focus more on outcomes than treatment. As an example, David suggests:
“AI might be able to come up with a model that can predict whether or not a Covid vaccine would be effective on a person, based on a deeper profile of characteristics.”
“As technologies get more complex, it gets more challenging to explain the business case without drowning in tech-speak. Businesses will need simple, relatable ways to tell their story and demonstrate thought leadership.”
3 — Payments will be a starting point in designing new experiences
Companies like Uber and Apple have taught us to love the simplicity of embedded payments. But it may be the Amazon Go stores that give the best glimpse into the future. Patrons use the mobile app to gain entrance to the store, then simply choose their items and leave — no checkout is required. This isn’t just a seamless way to pay, it’s a more convenient way to shop.
Beyond the Arc CEO Steven Ramirez makes this observation for our 2021 customer experience predictions:
“Innovations in payments can help erase some of the most negative customer experiences. Retailers and others can use embedded payments to eliminate the time, and potential health risk, of waiting in line. For big ticket items, from home appliances to cars, lending solutions can be made simple and delivered via mobile. Experience designers will begin with the payment, and build the experience around it.”
4 — Technology will foster a new Hybrid CX
2021 will see businesses finding new ways to add value with a hybrid of digital+human interactions. Nina Katz, a CX consultant and training expert says:
“In banking, for example, we’ll see an increase in video appointments to discuss more complex situations such as investment advice, mortgage options, business loans, etc. Another hybrid trend will be reallocating talent, such as retraining branch employees to be “digital ambassadors” who can help customers with questions about digital banking, an effort already underway at Bank of America.”
Steven takes it a bit further:
“Alongside video, we expect to see better integration with chat, email, and text messaging. These technologies aren’t new, but there will be more emphasis placed on integrating them more cohesively to create a seamless replacement for in-branch or in-store consultations.”
5 — Digital engagement will focus on financial health
The pandemic has been stressful, leaving many people struggling to manage debt and just get by. 56% of American consumers are not financially healthy, according to a J.D. Power report.3 It signals a significant need and opportunity for companies to increase engagement — with both customers and employees — by directly or indirectly supporting financial wellness.
Focusing on financial health may become a differentiator. Christine Matteo, a CX consultant predicts:
“Banking and retailers that use digital engagement to improve the financial health of customers and employees will come out ahead. Via mobile they can deliver personalized outreach, cost-saving offers, even budgeting tools and tips. By helping people reduce stress and boost their confidence to thrive, companies can earn the trust that wins loyalty.”
6 — Remote work will tap into new power
The future of work may be a hybrid of home+office, but we’re also seeing tech innovations emerge that make remote work possible like never before. As Steven points out:
“One of our clients has transformed hyperscale servers into a portable mini-rack that fits right under a desk, giving software developers the power of a data center at home. These kinds of transformative experiences are gamechangers, and we can expect to see more of them on various levels.”
Finding new ways to empower employees at home will also be critical to help increase efficiency and productivity, notes Gavin.
“More businesses will adopt an Agile approach to streamline efforts and speed deliverables.Agile methods and tools give teams more effective ways to collaborate virtually to achieve goals, as well as keeping employees more engaged and connected.”
7 — Digital experiences will leverage diversity for breakthrough thinking
No discussion of CX is complete without considering the strategy, data-driven insights, and empathetic messaging that go into creating compelling experiences. Afterall, digital-first isn’t really about tech, it’s about people. And that’s where diversity, which got a fresh boost in 2020, can play an important role.
In our 2021 customer experience predictions, we feel that companies will make diversity more about doing business in ways that include a broad range of perspectives. It might include more voices from within an organization but also leverage outside thinking. As an example, Bruce looks at our own diverse team:
“It can be hard to retool internally, so a nimble approach is to integrate diverse firms like Beyond the Arc into your functional teams. We focus first on our clients’ needs and then add our spin to make their work even better. Our spin comes from years of different experiences in the world and the workplace, and from being a minority-owned agency. Coming from differing backgrounds allows us to have empathy and sensitivity towards a variety of life experiences, and look at things through a customer’s eyes.”
Despite an unprecedented year of change and challenge, we’re optimistic about the opportunities ahead for businesses and consumers. 2021 will still have a long climb, but we think a focus on digital-first will make a powerful difference — and we’re ready to help make it happen. We think building a company culture focused on thinking like a customer is the right place to start.
And we’d love your feedback on our 2021 customer experience predictions. Feel free to comment below.