As we get deeper into the 2023 business year, I’ve been thinking about the trends that defined 2022 and those that are setting the direction for this year and beyond.
Acxiom CEO Chad Engelgau outlined his predictions for the year of customer experience. And there are the CX trends we’ve seen from Acxiom’s research into the metaverse and beyond, including “everything is an ad network”, the rise of “anything as a service”, intuitive technology, and more.
The view from EMEA
I’m most interested in how these big global trends are playing out in EMEA. One thing I’ve noticed in my three years in the UK is that the delay that has existed historically between US adoption and rest-of-world adoption of new trends and technologies is all but closed. (Accelerated no doubt by the pandemic and the transformation it’s driven in terms of digital adoption and remote working.)
So the regional gap is closing, and we’re seeing exciting developments in customer experience worldwide. But while there’s a lot of talk about evolution and revolution in digital marketing, it’s also important to recognize that some things haven’t changed. Namely the fact that, ultimately, a brand’s customers are the kings and queens of their world, and the smart money is always going to be in building a better understanding of those customers so you can create deeper, more rewarding relationships.
So, with that said, here’s what I’m seeing in 2023.
- Customer 360 is the marketer’s multitool
Customer 360 (C360) – or whatever you call having a comprehensive view of an individual’s interactions with your brand – is still the marketer’s Holy Grail. But while the quest for the perfect picture of customer profile continues, marketers are using their existing C360 capabilities to solve a number of major challenges today.
First up, it’s helping brands break down silo walls. And these silos come in various forms:
- There’s the fragmentation of channel data.
- There are the silos that exist across a given brand’s product suite.
- And of course there are the silos that inevitably arise between fiefdoms in large organizations, whether they’re departmental between sales and marketing, or regional between international locations.
Even when brands use the latest and greatest C360 solutions, combining CDPs and marketing cloud environments, it’s inevitable that silos will emerge, and it’s something that calls for ongoing diligence.
The second challenge C360 is helping to solve is the ability to create and maintain a single customer view. It’s no wonder this is a pressing issue, given the increasing complexity that comes with omnichannel. It’s why many brands are investing in C360 in the first place.
Finally, C360 is helping brands reach new levels of personalization in the experiences they offer people. In the conversations I’m hearing, when you break down the needs and wants of brands, personalization is the strategic common denominator. And this trend is set to continue. Real-time personalization is a part of digital CX strategy for 88% of businesses today, according to our recent ‘The future of personalization in B2C marketing’ report. Of the senior marketing decision makers interviewed for the report, 79% said it will be very important over the next three years, too.
- Digital Transformation 2.0 is here
Digital Transformation 2.0 is under way, but what’s the 2.0 all about? In a word: optimization. What we’re seeing is that brands are sunsetting many of the martech investments they made three-to-five years ago, and they’re focussing on consolidating and optimizing their current investments but also seeking out tuck-in tech that solves specific problems. For example, we’re seeing real-time digital campaign management as one of these tuck-in technologies.
There are no doubt a number of economic factors at play here, not least the fact that many brands rushed into digital commerce when the pandemic took hold. In the consumer packaged goods space, for example, many brands have found their margins squeezed by ecommerce investments – leading them to look for ways to optimize their own commerce plays.
On a different note, an area that appears to be capturing investment is Marketing Automation, this supports the ‘optimization’ theme i mentioned earlier or chalk it up to an overarching automation initiative usually supported by a brand’s IT team. No matter the cause or need, digital transformation 2.0 will look different than its predecessor.
- Personalization achieves sophistication
Retail media networks (RMNs) are another hot topic, as brands with strong first-party data look to create new revenue sources. There are some sophisticated personalization capabilities emerging in this space, starting in the US, with EMEA following closely.
But the ecosystem is still nascent in EMEA where RMNs are beginning to hit the mainstream, but brands still struggle to monetize their ad network opportunity.
Elsewhere, the potential for personalized experiences is improving at pace, led by AI use cases. Sales and marketing automation is a clear beneficiary of these advances – with customer service applications picking up speed, too. The ultimate goal, once again, is to get closer to the customer, and to serve them more intelligently and effectively.
- Loyalty has earned a transformation
Finally, a transformation that seems to have happened slowly, then all at once: the disruption of loyalty. Traditional reward points-based loyalty programs are big business. 70% of Brits are members of customer loyalty programs and this figure is expected to grow. The loyalty programs market in Germany is expected to record a CAGR of 11.7% between 2022 and 2026, reaching a value of $8 billion by 2026. In France, the numbers are even higher, with a CAGR of 12.9% predicted between 2022 and 2026, reaching a value of $8.9 billion.
But the shift towards a subscription-based, benefits-driven approach is well under way. In tough economic times, this focus on loyalty is poised to accelerate further as brands double down on customer retention. So I expect to see a lot more premium loyalty programs (PLP) emerge, inviting customers to take advantage of exclusive, immediate rewards, for an up-front cost – following the Amazon Prime model.
But it’s not all about material rewards. Loyalty strategies are evolving to meet the preferences of younger generations – for example, the importance Gen Z shoppers place on a brand’s environmental, social and governance (ESG) credentials when making buying decisions. We’re going to see more environmentally and socially conscious feedback loops built into the new wave of premium loyalty programs.
It all comes back to the customer
There are more transformations and disruptions we could explore that we’re likely to see play out in the coming months. But as I mentioned at the start, it always pays to remember the unchanging imperative that brands everywhere are facing: the need to understand their customers – the kings and queens of their worlds – and to use that intelligence to get closer to them.
