Customer experience technology on the rise
August 9, 2019
Spending on customer experience technologies will reach $641 billion (€572 billion) in 2022, according to the new IDC spending guide.
Worldwide spending on customer experience (CX) technologies will total $508 billion (€453 billion) in 2019, an increase of 7.9 percent over 2018, according to the inaugural Worldwide Semi-annual Customer Experience Spending Guide from International Data Corporation (IDC). As companies focus on meeting the expectations of customers and providing a differentiated customer experience, IDC expects CX spending to achieve a compound annual growth rate (CAGR) of 8.2 percent over the 2018-2022 forecast period, reaching $641 billion (€572 billion) in 2022.
IDC defines customer experience as a functional activity encompassing business processes, strategies, technologies, and services that companies use, irrespective of industry, to provide a better experience for their customer and to differentiate themselves from their competitors. The term customer refers to individuals (B2C) as well as groups (B2B). IDC focuses only on business process and therefore does not include the customer’s experience of the actual design of the product that the company sold to the customer, nor does it include aspects specific to the product or service such as the user interface or the product aesthetics.
“Customer experience has become a key differentiator for businesses worldwide. New innovation accelerator technologies like artificial intelligence and data analytics are at the forefront in driving the differentiation for businesses to succeed in their customer experience strategic initiatives,” said Craig Simpson, Research Manager, Customer Insights & Analysis.
According to the IDC spending guide, the retail industry will spend the most on CX technologies in 2019 ($56.7 billion/ €50.6 billion) and throughout the forecast. Digital marketing, AI-driven engagement, and order fulfilment will be the use cases that receive the most funding from retail organisations. Discrete manufacturing and banking will be the second and third largest industries in 2019. Customer care and support will be the primary use case for both industries. Retail and healthcare will be the two industries with the fastest spending growth over the forecast period with CAGRs of 13.1 percent and 11.5 percent respectively.
From a technology perspective, services will be the largest area of CX spending at $220 billion (€178 billion) in 2019. Most of this total will be divided between business services and IT services. Software will be the second largest area of CX technology spending led by CRM applications and content applications. Hardware, including infrastructure and devices, will account for nearly 20 percent of overall CX spending while telecommunications services will be less than 10 percent of total spending.
The United States will be the largest geographic market for CX spending in 2019 led by the discrete manufacturing and retail industries. Western Europe will be the second largest region with banking and retail as the top industries. The third largest market will be China, led by healthcare and retail CX spending. China will also see the fastest growth in CX spending with a five-year CAGR of 13.6 percent.
Categories : Around the Industry
