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Digital disappointment – why some customers aren’t fans

Companies are betting they’ll reap significant benefits by digitally transforming their customer experience (CX).

These benefits are only possible, though, if customers adopt these new digital experiences. However, as this fourth and final report in our CX series explains, a sizable portion of consumers aren’t enthusiastic about making the switch. Indeed, we found that many executives do not fully understand why consumers would be willing to try new digital ways of engaging with their companies. Two-thirds of executives have underestimated the role generational differences play in digital adoption, and too often digital CX initiatives have failed to meet customer expectations. Companies need to embrace their customers’ point of view with empathy and boldly reimagine experiences that resolve true pain points, not just digitize customer interactions. Otherwise, they risk jeopardizing their digital investment and their brand.

Who doesn’t hate waiting in line? Americans, for example, spend an astonishing 37 billion hours each year doing it. So, when Amazon recently announced Amazon Go, its new grocery store concept that eliminates the dreaded checkout, it rocked retailers’ world. Thanks to a complex set of capabilities, which Amazon refers to as “Just Walk Out Technology,” customers scan their smartphones as they enter the store, select the items they want and simply leave. Their Amazon account is automatically charged when they exit, and a receipt is sent to their Amazon Go app. The first store is being tested in Seattle with employees only, but already the concept has created quite a buzz.

Certainly, Amazon is far from the only company trying to apply digital technology to create breakthrough customer experiences. In fact, companies across sectors are launching a dizzying array of digital initiatives aimed at improving customer experience (CX). For instance, 85 percent of surveyed companies plan to offer mobile payments by this year. Seventy percent expect to introduce Internet of Things (IoT) capabilities, like connected cars or appliances. And 59 percent are implementing data-driven virtual showrooms. Executives are moving forward aggressively with digital CX because they believe it will result in substantial benefits to their business – improving their customer service, as well as their ability to capture customer data and customer insights.

Of course, success depends on customers adopting these new ways to engage and transact. But how eager are they, really, to experiment with new digital capabilities? Are customers even aware that companies are launching these digital initiatives?

Although we are well into the digital era, not all consumers are digital enthusiasts. In fact, we discovered that reaping the benefits companies seek may be more difficult than many executives realize. This report, part of our “Experience revolution” study series, reveals three serious misconceptions and disconnects between companies and consumers:

• Companies are launching digital CX initiatives without fully understanding what would motivate their customers to try them.

• Executives have miscalculated the extent to which generational differences can affect consumers’ interest in digital CX.

• For many consumers, their initial experiences using digital CX have been disappointing.

Why the misalignment? Despite the common refrain that companies need to be customer centric, they are still struggling to put this approach into practice. To win with digital CX, we believe companies must think big to create experiences that solve fundamental customer problems. Amazon’s checkout solution, for example, doesn’t just make a problem more tolerable, it eliminates it! But reimagining the experience is only part of the solution. Companies also need to bring their innovations to market by clearly highlighting benefits that resonate with customers, which may require a rollout strategy that includes plans for different customer segments.

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Meet the authors

Saul Berman, PhD

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, Vice President and Chief Strategist, IBM

Josh Goff

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, Global Partner

Carolyn Heller Baird, Global Research Leader for Customer Experience and Design, IBM Institute for Business Value