DXPs Show Strong Growth as Companies Seek More Connections
When the internet came into being a few decades ago, content management systems enabled businesses to create, organize, and publish content for it. The main focus was on creating basic, static web pages.
Then, as the internet became more dynamic, the basic CMS morphed into the expanded web experience management system, which added features like personalization and customer journey mapping.
Now, both of those technologies have given way to a much broader set of technologies known as the digital experience platform (DXP). DXPs are integrated suites of technologies for the composition, management, delivery, and optimization of personalized digital experiences across multiple channels in the customer journey. They incorporate advanced features like artificial intelligence (and, more specifically, generative AI), data analytics, omnichannel marketing, and seamless integrations across digital touchpoints.
Though still very much in their infancy, DXPs are already gaining traction. Research firm Gartner estimates that by the end of last year, roughly half of all organizations had acquired some DXP technology, and by 2026, it expects this to increase to 70 percent.
Allied Market Research valued the worldwide DXP market at $11.2 billion in 2023 and expects it to reach $41.7 billion by 2032, growing at a compound annual rate of 16.1 percent. Several other research firms have posted similar numbers, and CRM industry insiders share their optimism.
Elizabeth Tobey, head of marketing for digital and AI at NICE, expects to see an evolution where rather than just using CRM and CMS technologies, companies opt for the larger DXPs to do everything and to connect with customers and prospects in deeper ways. “Those connections might make that growth rate faster. But you also might see a change in the definition [of what a DXP is]. It could change into something like a hyper-platform,” she says.
DXPs are becoming more popular because they can integrate with many other technologies to deliver a unified, continuous, and optimized experience. And that is only going to grow as companies move to self-service portals, B2B e-commerce websites, and intranets.
“The expansive growth can be attributed to two factors—product fit and timing,” says Matthew Doherty, North America CEO of EXTE, a global adtech platform for the open web.
“In a customer-first era, companies are increasingly striving to differentiate themselves by offering unique, rich, and seamless experiences to enhance and streamline the customer journey,” Doherty explains. “The synergy of this desired business outcome, combined with an abundance of consumer data and data collection technologies, has ushered in a new era of digital transformation, which has in turn accelerated the rise of new technologies like artificial intelligence (AI), machine learning (ML), virtual reality (VR), and the Internet of Things (IoT) that are now being harnessed by marketers to predict and evolve the customer experience in ways never before possible.”
Doherty says that DXPs provide companies the best of both worlds, integrating disparate technologies into a cohesive platform and creating highly personalized customer experiences and customer journey permutations.
“We are evolving beyond the idea of [basic] DXPs,” Tobey adds. Digital experience is becoming more and more opaque. With the ability to use AI, companies can fully leverage systems.
DXPs using AI can leverage the data in company systems for a variety of purposes, Tobey adds. “Today, we can’t just look at content. We have to look at all of the experiences in all of the touchpoints and different customer interactions. Now we’re going even further; we need to look at every single piece of data, not just the system of record, [and have] a platform of record able to combine everything.”
The Benefits of DXPs
DXPs provide seamless access to digital experiences across multiple channels and devices so firms don’t have to rely on separate tools to manage content. This is the biggest benefit offered by DXPs, with industry insiders crediting them for a superior ability to manage omnichannel content.
By eliminating these digital silos, companies can also provide a more cohesive digital identity and smoother, hassle-free experience across channels.
Modern DXPs also offer a wide array of integrating options to overcome the challenge posed by the vertical silos that are still so common at many companies. Proprietary applications and applications built with some of the more common programming languages and protocols, such as SOAP, RSS, and REST, can be easily integrated.
DXPs also aid in personalization by being able to access all stages of customers’ journeys, including purchase histories, search data, payment methods, etc. And they enable quick, easy form creation, authentication, and validation. With advanced tools, users can customize fields, adjust localization fields, and make other changes to speed workflows.
And, since they can do most of the work of CRMs and content management systems, DXPs help companies simplify their technology infrastructure, reducing employee training and onboarding because there are fewer systems employees have to learn to use. The open-ended architecture of DXPs enable easy incorporation of legacy systems, eliminating the need to learn entirely new ways of doing things.
DXPs are very robust today, but luckily, organizations can customize them so they only need to use the tools that are relevant to them. And many DXP providers build platforms customized for specific industries.
Some DXP platforms are more focused on transactions, and others are focused on relationships, Tobey notes. Companies need to look at what they want the DXP to do. Some might just want it to handle basic information; others might want something much more robust.
“The use cases change when you’re talking about something like healthcare, finance, or e-commerce, because with those use cases, the level of security and the kind of interaction you expect from those companies changes pretty drastically,” she says.
DXPs also offer easy use whether staff is in the office, remote, or a mix of both. Cloud-based DXPs can be accessed from anywhere that has access to the internet.
Tobey points out that to deliver on the benefits mentioned above, DXPs must be able to capture experiences, interactions, and information about company relationships with their customers. They should also be able to work across many different channels and be used by many different teams.
“The question is whether the DXP is capturing everything that you want it to,” Tobey says. “What gave rise to DXPS was that we knew we had to go further than just serving up relevant and personalized content to serving up relevant and personalized experiences.”
“Folks wanted to have a digital-first and digital-led world, which is why this has gained so much traction,” she continues. “But we still have to go one level beyond that. We have to be able to use the aggregate data to understand how to create the best experiences.”
By industry vertical, the retail segment has accounted for the largest share of the DXP market, turning to DXP solutions to create personalized and seamless online shopping experiences for customers. By leveraging data analytics and customer insights, retailers can tailor their digital platforms to meet individual preferences, leading to increased customer engagement and loyalty, Allied Market Research said in a report released in the summer
Though the main users of DXPs today operate outside of heavily regulated industries like healthcare and financial services, those industries are important for the next phase of DXP use.
“Some of the more regulated industries will lead the charge if they are able to implement AI and are able to do it well, because they are actually able to deliver those personalized experiences,” Tobey states.
She points out that those personalized experiences are very important to healthcare patients, for example, who can then receive more targeted and personalized care tailored for their particular needs.
“If you can combine all of the aggregate data with the personalized experiences, and you have the infrastructure to capitalize on that quickly, you will be seeing some standout leaders,” Tobey says.
Looking Ahead
The continuing evolution of generative AI will lead to wider uses of DXPs in the future, according to experts.
“The growth and the increasing versatility of generative AI is going to make it accessible on every level, especially in this world where customer experience automation, marketing, and products start to blend. You’re already starting to hear some of the rumblings of this. We are in the very early days of something that can fully resolve needs, self-learn, and self-evolve,” Doherty predicts.
And, just as DXPs continue to replace content management systems, Tobey expects a further evolution where DXPs become end-to-end “hyper-platforms” that will help businesses provide customers with exactly what they want at every part of their journey.
GenAI-powered DXPs will go beyond content management and basic digital experiences to offer immersive and customized experiences by predicting and personalizing individual customer needs, creating seamless, humanlike interactions, optimizing engagement using real-time data analytics, and improving emotion and communication across language and cultural barriers, Doherty agrees. “With these features, it will become easier to implement a streamlined multichannel and multi-touchpoint marketing strategy, connecting businesses with customers across screens and devices in an automated, data-driven way that was nothing more than a mere pipe dream for marketers less than a decade ago.”
Providers Move Forward
Such intelligent DXP platforms are already in the pipeline at some firms.
Sitecore, a web content management and multichannel marketing automation software provider, for example, just this past October unveiled Sitecore Stream, a modern DXP that leverages generative AI to simplify marketing workflows and enhance productivity through orchestration, content intelligence, and automated assistance.
Sitecore executives called Stream a fulfillment of the company’s vision for an intelligent DXP that addresses the challenges and opportunities faced by marketers today. Sitecore Stream helps marketers meet these expectations by enabling them to provide their customers with personalized digital content and experiences fast, at global scale, and across digital channels, the company said.
“With Sitecore Stream, we’re delivering a smarter, more strategic, and more secure way for marketers to create and manage content and deliver seamless customer experiences,” said Roger Connolly, chief product officer of Sitecore, in a statement. “Sitecore Stream leverages customers’ brand architecture to provide brand-aware AI but, critically, does not use your content to train the underlying AI models. With Sitecore Stream and our vision for an Intelligent DXP, we are addressing marketers’ pain points head-on, combining the power of AI with our deep experience helping customers with their digital transformations.”
“Together with leading brands, we reimagined the content life cycle from the perspective of what the customer wants and the marketer needs,” added Dave O’Flanagan, CEO of Sitecore, in the statement.
And in late August, information management systems provider Iron Mountain launched the cloud-based Iron Mountain InSight DXP to help companies access, manage, govern, and monetize their physical and digital information, automate workflows, enable audit-ready compliance, and make data accessible and useful.
“We see InSight DXP as a critical platform to help our customers get their information ready for use in generative AI and other AI-powered applications that drive operational efficiency and enhance customer experience,” said Mithu Bhargava, executive vice president and general manager of Iron Mountain Digital Solutions, in a statement at the time. “With unified asset management, information governance, workflow automation, and intelligent document processing tools, our customers can efficiently manage information across physical and digital assets.”
Sitecore and Iron Mountain are just two of the dozens of vendors that make up the DXP market. Gartner, in its most recent DXP Magic Quadrant report, identified 14 leading DXP vendors, including Adobe, Optimizely, Acquia, HCL Software, OpenText, Sitecore, Bloomreach, Magnolia, Liferay, Crownpeak, CoreMedia, Kentico, Progress, and Squiz, but noted that this is just a small sample of the overall market. According to Gartner, the DXP market is a very broad sector that is continuing to expand, giving buyers lots to consider.
And industry analysts and consultants universally agree that the DXP market is poised for robust growth driven by evolving consumer preferences, ongoing innovations, and the integration of advanced technologies. The potential of DXPs is boundless, poised to redefine how companies connect with their audiences.
Phillip Britt is a freelance writer based in the Chicago area. He can be reached at spenterprises1@comcast.net.