KAE’s 2020 Predictions: Customer Experience

How will customer experience evolve in the year ahead?

 

Augmented Reality

In 2020 we will see an increase in the number of brands using Augmented Reality (AR) to provide simpler and more engaging shopping experiences to consumers. This gradually-emerging trend is likely to pick up steam over the next year (thanks to the evolution of AR and VR technologies and 5G network deployments) and the world of retail looks set to be one of the biggest beneficiaries. Brands will seek to emulate the success of early adopters of AR such as ASOS, whose AR app showcases items of clothing on different body types as customers browse.

But AR won’t just penetrate the retail space –  Mastercard is getting in on the action too, with plans to launch an AR app to promote all the benefits offered by its cards in a 360-degree virtual space, while Delta customers will soon be able to choose their plane seats by experiencing them virtually. Providing more intuitive experiences is becoming a prerequisite for customers: 61% of shoppers already prefer retailers offering AR over those that don’t, as it makes the shopping experience more ‘fun’.

Automation and AI 

A plethora of AI use cases are set to rise on company agendas in 2020, with technologies that were previously limited in scope looking set to become more mainstream. The question surrounding chatbots’ ability to mimic the “human touch”, for example, has been a topic of conversation for a while now, and while brands continue to adopt chatbot technologies the perfect balance between automation and human interaction has yet to be struck. As algorithms become more intelligent, though, chatbots are expected to be able to engage in more advanced real-time interactions, taking over many organisational roles.

Beyond chatbots, predictive analytics and machine learning are likely to make consumer experiences more efficient and seamless in 2020. Hybrid AI systems are becoming more commonplace, and it won’t be long before we see these being more widely harnessed to improve customer experience. Organisations are already utilising biometric technology to authenticate our accounts and invest our money in stocks using predictive algorithms, but most companies haven’t yet scratched the surface of the potential impact these technologies could have.

Social selling

In 2020 we expect to see ‘social commerce’ become more commonplace as social media platforms develop new features to facilitate the direct shopping experience. Social media platforms will try to integrate new buying tools to make the shopping experience more seamless for users, following the success of innovations like Chinese platform TikTok’s live-shopping feature, where users can directly buy the products from videos they’re watching without leaving the app. Instagram has tested a similar feature, making it possible to integrate purchase links to a user profile or through ads.

As consumers are expected to spend more time using their phone than watching TV in the year to come, social commerce is likely to evolve and become a more widespread way of shopping. It will become easier and more engaging for consumers to buy online: they can rely on recommendations from influencers and can access visual content to make a buying decision.

Flexibility

In 2020, consumers will be increasingly drawn to companies that offer flexibility, whether via modern subscription models or variable payment options.

Long a popular way to purchase access to music and news content, the subscription model is growing in popularity for big-ticket items like cars, freeing consumers from the burdens of full-time ownership. Consumers will be attracted in increasing numbers to companies that allow flexible subscription options: HelloFresh, for example, has attracted a loyal fanbase in part due to its no-strings-attached rolling weekly subscription model.

Flexibility has also become a must for one-off purchases. 71% of those surveyed recently by the US National Retail Foundation said they shop in “micro moments” – small bouts that take place whenever and wherever is convenient, predominantly online. Flexible delivery options, particularly same-day and specified-time delivery, will remain crucial as consumers dedicate less time to in-person shopping excursions and make more purchases on-the-go.

Payment flexibility also looks set to become increasingly important to shoppers in 2020, especially those in younger age brackets. As these consumers continue to look for more convenient and flexible ways to pay, mobile payments will continue to grow in popularity, as will “buy now pay later” solutions like Klarna.

Brand promise/purpose

In the age of social media, brands are scrutinised more than ever before. Brands are no longer judged on the basis of their products alone, but by what they stand for and how they behave.

In 2020 this trend will become even more prevalent, as brands strive to retain their current customers and win over new loyalists. In the last decade, brands driven by a high sense of purpose have seen higher rates of revenue growth than average, and according to a study by Forrester, a quarter of global firms will lose over 1% of revenue by responding poorly to a social issue.

Businesses in 2020 will have to think particularly carefully about their social values. Sustainability, for example, has become so fundamental that it has moved beyond being a simple selling point to become a basic hygiene factor for customer purchase decisions.  2019 saw the concept of the “circular economy” pushed into the mainstream and even put into practice in the real world, as younger consumers moved away from an ownership model towards seemingly less wasteful alternatives. The circular economy movement will expand even more into the public consciousness in 2020, with big brands even starting to get in on the act.