January 11, 2017

Omni-Channel Customer Experience Trends for 2017

What kind of changes can incumbent industry leaders and emerging disruptors expect in the realm of customer experience in 2017?

Below are some of the most intriguing developments likely to emerge in the coming year, showing how omnichannel expanding and flowering across numerous industries.

Data-Driven Personalization

Data collected across channels is needed in order to personalize experiences and make actionable recommendations. When companies strive to become trusted advisors, they must reach for more personal information on which to base their interactions.

Data Security Is Crucial

The potential perils and promises of sharing data can both be seen in the Google-owned initiative Deep Mind Health. On a mission to “push the boundaries of artificial intelligence,” this health portal is developing a partnership with the UK’s National Health Service. Questions have arisen around the topic of patient data, however, and the entire concept is being scrutinized by Britain’s National Data Guardian and other public security watchdog agencies. In 2017, the inherent tensions between disclosure and privacy will continue to dominate technological conversations.

Predictive Analytics

Many brands are not sure how to leverage the data they collect in order to go beyond basic personalization and actually start predicting what customers will do in the future. The potential here is huge, as predictions could help merchants adjust sale prices, manage inventory, choose the best level of staffing and so on. The good news for 2017 is that more information on this topic is beginning to be released online, and new software is making predictive analytics actionable and understandable. IBM’s Big Data Hub, for instance, cites some alluring research statistics: Applying predictive analytics results to 78 percent greater annual improvement in customer profit margins, 27 percent higher retention of clients and 98 percent greater annual improvement in customer lifetime value. Regarding this, CMSWire says, “Using predictive models and machine learning to be more customer-centric is the mantra of the day.”

Low-Effort Interactions

The focus on how to please customers has recently shifted in the direction of simplicity. As technological infrastructure becomes more sophisticated, the user side grows cleaner and simpler. The Amazon Go stores are a perfect example of this trend: Customers no longer have to go through checkout lines. Instead, they let their phones be scanned as they walk through turnstiles and into the store. After taking what they want from the shelves and putting them into a bag or backpack, they simply walk out again. Afterward, their purchase is automatically billed to their Amazon account. Although the larger outcome of this revolutionary technology is still difficult to envision, it reminds us that we’re only in the beginning phases of a profound transformation.

Fewer Touchpoints

The fewer steps a customer has to go through to complete an interaction, the happier they’ll be. Cutting out every touchpoint that isn’t needed is a central goal for digital transformation of the experience. We’re rapidly moving into the post-app era, as customers no longer want to have their devices cluttered up with a separate app for every brand they interact with. More and more corporations are seeking to streamline every contact in order to find ways to reduce extra steps. One example of this is Zelle, a brand new payment channel that provides ways for individuals to move money in a newly efficient way. Not yet available in all areas, Zelle has already partnered with major financial institutions and promises an efficiency revolution in payment technology.

Pruning Away Excess Choice

An example in another realm is Call to Action, a simple utility that lets users enter their zip code and then automatically initiates a phone call with that person’s congressional representative. One of the distinguishing characteristics of these new third-party players is their singularity of purpose. For example, Call to Action doesn’t even ask users to choose between calling their senators or their representatives. Instead, it picks one narrow focus — the House of Representatives — and removes the user’s need to make any choice at all. This brings up an interesting dichotomy: while greater choice has usually been considered a major key to improving customer experience, it has become evident that “choice fatigue” is a real obstacle. Best-practice digital conveniences now try to reduce the number of options and simply provide the best and fastest one automatically.

Brief Contacts

Customers are often interacting with commercial entities — and with each other — in small two- to twenty-second micro-interactions. Every digital innovation must answer the question of how that micro-interaction will drive them to the next step in their omnichannel journey.

Freeing Resources for Customer Service

In some cases, improved technology in the back-end of the retail experience enables a better customer experience. Target has seen a 20 percent year-over-year growth in their digital engagement, and CEO Brian Cornell attributes this to the ways in which they have streamlined the buying experience. RFID technology has allowed the retail chain to redesign its replenishment process and greatly improve inventory accuracy. Using the significant savings in payroll that new RFID tracking provides, Target has upped its investments in customer conveniences like in-store pickup and ship-from-storage process. Customers are enthusiastic about the various pickup options, which free them from having to find items and wait in checkout lines.

Integrations

Partnerships with third-party apps and services now help move customers along their omnichannel journeys. For example, iStockNow provides live inventory updates that tell buyers exactly which stores currently have high-demand items, such as Air Pods and DJI Mavic, in stock. Once a customer receives this information, they can order the item online and arrange to pick it up at the store nearby.

Another upcoming integration example is seen in Starbucks’ planned partnership with China’s Tencent, in which they will provide Chinese customers with the ability to use “social gifting” through the WeChat Pay app.

New Partnership Opportunities

Yet another rapidly growing area of partnerships has been in the realm of tracking apps. Whether through Google Now on Tap, Parcel or Deliveries Package Tracker, customers are increasingly interacting with third-party providers. The omnichannel journey has now turned into an omni-provider journey, and partnerships behind the scenes are putting more information at the customer’s’ fingertips.

Messaging, Text-Based Interactions and Friendly AI

Apps are out, message-based interactions are in. This trend is evidenced by the rise of integrations and bots with Facebook Messenger, iOS Messaging, and others. Tommy Hilfiger is pioneering a new Facebook Chatbot for its Gigi brand that will use AI to respond to questions that customers enter. Gigi is the result of a collaboration between the fashion brand, Facebook’s Creative Shop and bot creator Msg.ai, and is an effort to offer a dynamic chat experience on the Facebook platform.

Microsoft QnA Maker is another such example: It allows developers without extensive experience to automatically create a knowledge base for their service and then immediately generate a chatbot for their website. This bot can be integrated with Microsoft Cognitive Services APIs to “see, hear, interpret and interact in more human ways.”

Customers continue to demonstrate that they appreciate being able to interact through text-based or intelligent automated messaging. It’s an interesting divergence of luxury: although concierge-type human curation is still a valued element in high-end customer experience, people seem equally attracted to the ability to complete interactions with a good chatbot facsimile of a helpful human being. Either way, they seek the simplicity of having their wishes understood and their transactions effectively completed.

Voice Recognition

As chatbots progress into the seeing and hearing business, voice recognition is increasingly part of the “make-it-simpler” trend. Starbucks recently announced that, in 2017, it will launch the beta version of a new AI-enabled feature on its mobile app. Customers will be able to simply speak with “My Starbucks Barista,” placing hands-free orders for items that they will then pick up at their local Starbucks location.

Augmented Reality

AR shrinks the boundaries between a customer’s life and the products they’re shopping for. By layering proprietary content over the customer’s own digital imaging, AR makes shopping feel like a game. Snapchat’s new Spectacles are a perfect example of technology leading to sheer fun. These glasses pair with the Snapchat app, letting users take photos or video and then add their own extra content with Snapchat’s filters and drawing function. Spectacles are available through charmingly odd yellow vending machines, which are themselves situated in quirky locations. This inspired mix of a completely unexpected selling mechanism, with a product that offers the fun combination of wearables and augmented reality, is just one doorway into the omnichannel future. Although right now these glasses are only serving to drive more users to Snapchat, it won’t be long before other companies will figure out how to boost their own traffic with similar technology.
New business models and unconventional experiences will be the hallmark of 2017. For any business that’s trying to figure out how to use digital to improve customer experience, the key will be to think out of the box: How can products and services be distributed in a different way? What new pairings can be made between physical products and digital experiences? How can customer interactions be simplified? The truly thrilling leading edge to today’s technology is in the unexpected new channels in which the marketplace conversation can happen.