In 2016 mobile evolved from a stand-alone channel to a baseline for all branded digital experiences. In 2017, mobile will continue to elevate customer expectations as it transforms even non-digital experiences – such as Starbucks “order ahead” functionality. There is no question that mobile moments are the battleground to win, serve and retain your customers. What a mobile moment is and where it surfaces, however, will become amorphous as it extends beyond smartphones to platforms and connected devices and then eventually lives in a consumer’s personal ecosystem.
App usage as we know it has likely peaked. In 2017, platforms will expand in importance as consumers continue to consolidate their time into fewer places on the smartphone. Already, they spend 84% of their time in just five apps. These experiences that we loosely still refer to as mobile (but not for much longer) experience will lives as fragments on third party platforms. Consumers will still use apps for in-depth experiences with brands, but will increasingly use fragments to get quick things done. Examples of popular third party platforms today include Apple’s iMessage, Facebook Messenger and WeChat.
You've been creating digital customer experiences for years now. You've built a successful app. You’ve assembled a martech/adtech stack. You may even have started swinging at omnichannel delivery or harnessed AI or piloted a connected product. So it’s time to declare victory on digital transformation, right? [In our 2016 services survey, a shockingly high 19% have . . .]
Not so fast. Digital customer experiences are only the shining faces of a digital business. Those pretty faces quickly lose their luster unless you’ve also transformed your business operations to make them better every single day -- and introduce new digital faces all the time. We call this capability "digital operational excellence." It’s the 80 in the 80/20 rule of digital transformation. Here are three predictions for 2017 to prod the digital business conversation:
The Pokémon GO phenomenon washed across the globe like a tsunami — and while the pace at which it subsided was almost as sudden as its inundation, the customer experience (CX) lessons that it has left behind are invaluable. The game’s success reveals key elements that any company can borrow to create its own powerfully engaging multisensory experiences. By simultaneously activating multiple neural systems and chemicals, a larger, multiplier effect is observed. Consider how Pokémon GO:
Stokes the anticipatory-reward system with constant yet unpredictable rewards. The euphoric “high” that we feel when we anticipate a future reward, especially as it gets closer, motivates people to continue pushing for the reward in order to receive more intense and stimulating dopamine-driven pleasure sensations. However, an additional component in Pokémon GO’s success is the unpredictability of discovery. Whether it’s a shadow of a rare monster in the vicinity, the anticipation of what’ll be hatched from a 10-km egg or the Pokémon that just appears out of nowhere; the potential-reward scenario increases levels of dopamine like no other.
To help security and risk professionals navigate the complex landscape of privacy laws around the world, Forrester created a data privacy heat map that highlights the data protection guidelines and practices for 54 different countries. Earlier today, we published the 2016 version to the tool, as well as a free version with access to only the U.K. and U.S. ratings. We have updated the map every year since it’s initial publication in order to keep pace with the constantly-evolving landscape of global data privacy laws.
As we roll out the 2016 update and reflect back on the past 5 years of annual assessments, three high-level trends emerge:
Countries continue moving toward the EU standard for data protection. New legislation outside of the EU often follows the EU’s lead by adopting provisions similar to those in the existing Directive 95/46/EC regulation. The slow global convergence toward the requirements outlined in the regulation continued through 2016. For example, Argentina and Japan strengthened pre-existing policies, while Nigeria passed its first comprehensive cybercrime legislation. Japan also established an independent regulatory body (“Privacy Protection Commission”) that oversees privacy issues—a requirement of both the current Directive and the superseding European General Data Protection Regulation (GDPR).
Get used to it. Gone are the days of stability and predictability. The business environment you operate in will change faster than ever in 2017. Many of these changes will be outside of your control, but your ability to anticipate and respond will make or break your success. At the heart of this change is the ever-more empowered customer that will accelerate a domino effect of changes in the business environment in which you operate. So here is a quick summary of some of the actions we expect CIOs to take in 2017.
■ Empowered customers drive strategy. Customer obsession is paramount for business success in this rapidly changing world. Ever growing numbers of devices and information lead to a desire for new products and services at a rapid pace. CIOs need to extend their focus beyond building great customer experiences. Striving for speed and flexibility in re-designing core operational function and leveraging emerging technology are both necessary to meet these accelerating customer needs.
■ CIOs will correct bi-modal missteps. Over the past few years, many CIOs fell for the false promise of a bi-modal strategy. But those CIOs are already experiencing the shortcomings of operating a two speeds. Business peer frustration, polarizing and deteriorating cultures, and unsustainable operational complexities will continue, ultimately spurring most of these CIOs to course correct in 2017.
Video conveys emotion unlike text and can show features and functionality unlike any picture. That’s why retailers see nearly triple the conversion rate on product pages that have video versus those that don’t. Entering what Facebook CEO Mark Zuckerberg calls “this new golden age of videos online,” companies and brands need an enterprise-class online video platform to deliver the video experiences that drive customer engagement.
We can’t help but think CMOs feel a great deal of empathy for the characters in, Game of Thrones. Westeros is a cutthroat environment riddled with cunning strategy, but also a profound amount of character turnover, shall we say. Marketing is no less strategic, what with digital disruption, an evolving customer base, and brand strategy calculus also creating drama and departures.
So in 2017, what will smart CMOs do to survive until 2018? CMOs must demonstrate their brands’ promises everywhere. Specifically: evolve their brand and CX strategies to close the distance between brands. We expect that:
Brands will go Post Digital. To customers, there are no longer boundaries between the digital and the physical worlds. CMOs who get this will work to connect with customers emotionally, create one-to-moment, personalized interactions, and stress a human, helpful, and handy charter as the guiding principles of their marketing efforts.
Organizations will update talent and structure. The scramble to do the right thing by empowered customers next year will finally force CMOs to consider the skills shortage ever-present on their teams. This will lead to much needed training of existing talent and realigning teams with brand visions and customer needs.
Hotel customers’ usage of mobile is increasing rapidly all over the world. They use mobile devices for multiple hotel-related activities beyond booking, such as using their mobile as a room key, ordering services, and controlling smart hotel rooms. Hotels have the urgency to embrace mobile moments because they need to:
Keep up with the fast-changing behaviors and expectations of mobile travelers. The bar is higher: Services that hotels are starting to offer, like using mobile phones as room keys, are no longer that new to mobile-mind-shifted travelers.
Deal with increasing mobile competition from online travel agencies. Large online travel agencies and travel aggregators are consistently creating better mobile services and experiences for consumers and providing more options at the discover, explore, and buy stages than hotels do.
Manage a complex, fragmented ecosystem to deliver consistent mobile experiences. Travelers experience a hotel brand through multiple mobile touchpoints; these interactions also occur before, during, and after the stay. Aligning all of these touchpoints under such conditions is a challenge and often takes more time and effort.
Wall Street followers found much to be concerned about in Amazon's quarterly earnings. Shipping costs went up 43%, operating costs are up 29% overall and the company's operating margin fell to a ghastly 1.8% (down from 4.2% the quarter previous). In light of all this, the stock is down 6% in after-hours trading.
Which makes the stock a buy, in my book. (Disclosure: I'm not a financial analyst, I'm a consumer market analyst, so don't take my investment advice. Oh, and I don't own any Amazon stock outside of mutual funds.)
Amazon's margin went down precisely because the right costs went up. Amazon continues to add millions of Prime customers and investing in those customers costs money. Specifically, Amazon has opened 23 warehouses since July. Those warehouses will be in position in the crucial holiday rush to ensure not just two-day delivery, but one-day delivery more and more. And in some cities, one-hour delivery.
As the Wall Street Journal quoted Amazon CFO Brian Olsavsky: “We acknowledge that’s expensive,[but] customers love it.”
Your business model is under attack. And it’s not by your competitors. It’s under attack from your customers. Three years ago, Forrester identified a major shift in the market, ushering in the age of the customer. Power has shifted away from companies and towards digitally savvy, technology-empowered customers. They now decide winners and losers: Our Empowered Customer Segmentation shows that more than a third all US online adults want new and engaging digital experiences. They will switch companies to find these experiences. In this environment, being customer-obsessed can be your only competitive strategy.
In Forrester’s 2017 Prediction Reports, we are tracking firms’ progress on their customer-obsessed journeys. In our annual collection of predictions, we look at business strategy, leadership, customer experience, and technology dynamics to examine progress and predict the key events, changes, and trends that will occur in 2017.
Here are three key findings from our 16 predictions reports:
The next wave of Customer Experience will have a profound impact on firms’ P&L: The shift to a customer-led market represents an immediate and prolonged threat to company survival. Our research shows a clear correlation between the quality of customer experiences and revenue growth; it also affirms that emotion is a core driver of customer loyalty and spending. The next wave of CX will connect these dots, blending analytics, technology, and design to evoke emotions to drive affinity and directly impact revenue.