• January 22, 2021
  • By Rocco Albano, vice president, experience strategy, Merkle

Where Is CX Headed in 2021? 3 Predictions for the Year Ahead

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In 2020, driven by COVID-19 and consumers’ increasing expectations for seamless customer experiences, companies accelerated their digital transformation initiatives. Businesses will continue to rapidly transform their go-to-market approaches and customer relationship management strategies in 2021 to meet ever-evolving consumer needs.

How will customer experience evolve in the new year? The predictions outlined below share today’s digital-first approach to business, which require brands to use first-party data and integrated technology to deliver intelligent customer experiences.

1. B2B Going Direct

B2B companies that have traditionally been laggards in e-commerce will struggle and strive to sell directly online to commercial buyers, in an effort to fend off disintermediation from the mega-commerce players Amazon and Alibaba, as well as numerous vertical marketplaces.

Due to the pandemic and the continual emergence of third-party marketplaces, I predict mid- to large-sized B2B manufacturers and suppliers will accelerate their direct e-commerce efforts in 2021. For many B2B companies, e-commerce is no longer a choice; it’s necessary to efficiently fulfill customers’ buying needs, bolster margins, and protect market share. B2B brands will employ e-commerce to mitigate the loss of their primary selling channels: trade shows and face-to-face time with customers. And even further, direct e-commerce will circumvent third-party fees and selling in the same “store” as competitors, allowing companies to maintain ownership of customer relationship management.

The idea of B2B going direct will be such a priority this year, that we can even expect major players like Amazon to expand its B2B customer base through a B2B marketplace acquisition—perhaps in healthcare supplies or the general industrial category, taking a note from their shrewd acquisition of Pill Pack to further bypass retail pharmacies. It’s very likely that the same strategy could work for them in B2B as well.

2. Digital Health as a Service

Health as a service means providing tools, experiences, subscription models, and support to members, patients, caregivers, and providers over the course of the treatment journey. Health as a service enables and empowers people to better self-manage their health without the provider in the “room.”

This acceleration of digital and telemedicine will be driven by the need to provide treatment and care remotely when possible, regain significant lost ground with patients due to COVID-19 shutdowns, and attempt to mimic innovative subscription-based companies such as One Drop, the world’s first end-to-end diabetes management, coaching, care, and blood glucose monitoring platform.

I predict pharmaceutical companies will fall further behind in delivering health-as-a-service programs via digital experiences that go beyond the basics of offering co-pay incentives and general treatment information. For pharmaceutical companies to truly deliver novel, digital-enabled treatment programs, they need to reinvent their business models by setting up innovation centers and partnerships with healthcare providers to stay connected and relevant to their customers after prescriptions are written.

I predict public health agencies at the state and country level will lead the way in delivering population health-as-a-service experiences that enable us to begin navigating the COVID vaccination epoch. As of early December 2020, 19 U.S. states have adopted the Apple and Google Exposure Notification Tracing API for COVID-19. This tracing interface allows medical agencies to track people who have self-reported a case of COVID and inform others if they have come into contact for more than 15 minutes with someone who has COVID, through an anonymous ID system managed via Bluetooth tracking technology embedded in the app. As of late December, the Pennsylvania Department of Health COVID-19 App has 710,000 users, or 5.5 percent of the state’s population.

In order to create safer environments for their customers and employees, brands will need to figure out ways to leverage this type of technology and data. Or they may need to create their own COVID mitigation experiences as they position themselves for reopening.

3. Connected Customer Experiences

Customers will continue to shift their loyalty to brands that provide seamless, connected customer experiences spanning online, brick-and-mortar, in-home, products, and services. It’s no longer a digital or analog world; we are now in the age of the customer experience lifestyle, requiring integrated, intelligent, personalized, data-fueled, and immersive experiences that don’t require being tethered to a cable or wearing a clunky virtual reality (VR) headset.

An example of connecting location-based global events and buyers through digital and analog experiences is Sotheby’s Auction House of the Future. In 2020, when COVID shut down the world, Sotheby’s reinvented its 276-year-old auction room format. This enabled the luxury marketplace to make its pre-auction galleries virtually accessible via interactive and searchable showrooms available on all devices. Think about the amount of actionable first-party data Sotheby’s is now able to collect, based on registered buyer engagement with works of art viewed in its digital showrooms. The auctions were held by video streaming in real time to auction buyers around the world through Sotheby’s web and phone bidding platform.

We have now begun to cross the chasm to fully connected digital-analog integrated physical human experiences. These are experiences that go beyond putting on a wearable and viewing data on a phone or being represented by a 3-D avatar. These are headset-less, wireless-based, full motion experiences where people interact with smart devices and connect with others through a variety of screens in real time. A few examples in the fitness category include Peloton Bike and Mirror Home Workout System.

In August of 2019, the Wall Street Journal said, “Virtual fitness classes have grown past the novelty phase, with millions of people using apps and internet-connected gear to exercise at home. Gyms are fighting back.”

Now, 17 months and one pandemic later, the shift to fully immersive, connected, in-home virtual fitness experiences is applying even more pressure to traditional gyms.

In 2020, Mirror—a workout system consisting of a 40-inch HD mirror-video-enabled and connected display—was bought by Lululemon for $500 million. This acquisition allows Lululemon to go beyond athletic apparel and expand to provide smart fitness equipment and subscription-based workout programming directly to a consumer’s home.

This is just the beginning of a world that leverages biometric and other real-world data to deliver fully personalized experiences on ever-larger interactive screens. I predict new, untethered, intelligent experiences will emerge rapidly, and there will be many acquisitions in this space.

Our collective craving for experiences is no longer about having to travel somewhere exotic or exhilarating; it’s all about bringing the experience into the home. Simply put, brands must prioritize enabling today’s customer experience lifestyle.

Rocco Albano is vice president, experience strategy, at Merkle. Albano is a systems-based thinker who looks through the lens of the customer to understand a brand’s experience landscape, identify opportunities, and create strategies that drive growth. Albano has worked in the agency world across strategy, marketing, analytics, customer experience design, digital transformation and technology since the earliest days of the Web in 1995. Prior to joining Merkle in 2016, Albano spent almost nine years at Razorfish, over two stints in various roles, and four years at MBC—now Digitas Health.

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