Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we’re looking at research into how generative AI will enhance overall shopping experiences in the future, and it’s already(!) time to discuss research about holiday season shopping, with a huge increase in a ‘treat yourself’ mindset in consumers.
Key news
- For the first time in a decade, advertising is no longer the least trusted industry in the UK, according to new researchfrom the Advertising Association. Surpassed by the media and government, some 30% of consumers surveyed say they trust advertising, an increase of 7% since 2022. One marketing consultant on LinkedIn attributes this shift to a more honest and transparent approach in advertising, highlighting the growing importance of authenticity.
- As inflation approaches the targets set by central banks across the continent, European business momentum is picking up. Inflationary pressures eased across the eurozone, although input costs and output prices remained elevated compared to pre-pandemic levels. The UK services sector also saw a slowdown in growth, but experienced a substantial cooling in input cost inflation, which fell to its weakest since February 2021.
- Swedish furniture maker IKEA has launched a store on Roblox, the digital universe, following a trend embraced by several other global brands. This collaboration, titled “Careers Done Different,” aims to merge virtual gaming with real-world employment opportunities in the UK by hiring paid co-worker roles within the virtual space, according to Marketing Week. Engaging a younger generation and presenting an innovative approach to recruitment and career development makes this move a “bullseye for IKEA,” shares Nick Vinckier, director of corporate innovation at Chalhoub Group.
- Coldplay has said it reduced its carbon footprint on the first two years of its current tour by 59% compared to its previous world tour. The lead singer, Chris Martin said he would not tour again unless it could be done sustainably, and two years after the band pledged to lower its tour emissions by at least 50%. This definitely sets an example for businesses and other performers all over the world.
Commentary news share: AI is making us go extinct…
OpenAI workers have warned that AI could cause ‘human extinction’.
“Recent warnings from AI experts about potential existential threats posed by AI have driven a lot of headlines and captured the public’s attention; and while it’s important to acknowledge the significance of the potential pitfalls, suggesting human extinction is a bit extreme. History shows that with the introduction of any transformative technology, from the steam engine to the internet, there has always been a blend of enthusiasm and caution.
“Many markets have already introduced legislation to safeguard society (e.g. EU AI Act), setting guidelines for how organisations should be using and innovating with AI. While safe AI development and use is a never-ending journey that requires constant review and updating, this type of legislation will ensure we harness the potential of AI for good whether it be for medical, defence, business or other purposes. The bottom line is, the potential benefits of AI drastically outweigh the risks.”
–Flavia Colombo, VP EMEA at HubSpot
More Than 70% of Consumers are Expecting Generative AI to Enhance Their Online Shopping Experience
Coveo released its fourth annual Coveo Commerce Industry Report, based on a survey of 4,000 shoppers, equally divided between the U.S. and the U.K. The report, “With Overwhelming Choice, What Really Drives Shopper Purchase Decisions?,” conducted in partnership with Arlington Research, examines shopper preferences, expectations, and frustrations at a transformative time in the retail industry.
The study shows the increasingly important role that GenAI is playing in guiding purchase decisions, with 72% of consumers expecting their online shopping experiences to evolve with GenAI. These expectations include pre-purchase education on products and attributes and even virtual shopping assistance.
Meanwhile, shopper willingness to exchange personal data for deals is on the rise, along with their concerns over its use. The growing influence of social commerce is also a notable trend, particularly for Gen Z shoppers who often discover products on social media platforms, though only 14% said they hit the “buy” button on that channel.
All this reveals how ingrained digital interactions have become within the retail customer journey. In fact, Coveo’s survey confirms that 94% prefer to either start or end their shopping experiences online.
Findings in the latest instalment of Coveo’s 2024 Report include:
GenAI has shifted shopper expectations, particularly pre-purchase decision-making.
72% expect their online shopping experiences to evolve with GenAI while 37% expect pre-purchase education on products and attributes, and 31% expect a virtual assistant to help guide them on product selection.
High expectations persist for online shopping.
91% expect their online shopping satisfaction to match or surpass in-store experiences, yet 49% of shoppers state they still encounter problems online.
Social media piques consumer interest but retail websites are a critical means of conversion.
Around two-fifths (39%) stated that they often/always come across products that catch their interest when browsing social media platforms, a figure that increases to over half (55%) for Gen Z. However, only 14% of shoppers said they complete their purchase through that same channel.
Product discovery impacts brand perception.
More than two-fifths (44%) said finding what they are looking for in just a few clicks would have the strongest impact on their perception of a brand. A further 18% of respondents said that their perception of a brand would be most positively impacted by ease of finding supporting content (manuals, instructions), indicating the significance of delivering robust customer experiences and discovery to more than 60% of consumers overall.
Willingness to share personal data for deals is on the rise, but so are concerns over data usage.
54% said that they will share information about themselves if it improves their experience; 65% said they will do so for brands they trust, and/or if they get better deals and offers as a result (compared to 41% and 48%, for the same question in Coveo’s 2023 report). That said, there has also been some uptick in the figure relaying shopper concern over how their data is used by online retailers — rising from 64% in 2023 to 71% in 2024.
Post-purchase experience remains a big challenge.
68% have experienced an issue with either customer service, checkout, or post-transaction experiences when interacting with a business, which included navigation and search issues which prevented them from resolving problems or their questions. Millennials (71%) and Gen Z (75%) respondents were more likely to cite either purchase, customer service or post-transaction issues.
73% of Millennials Plan to Indulge in Self-Gifting This Holiday Season
Salsify released its inaugural 2024 Consumer Holiday Shopping Report, offering crucial insights and trends shaping this year’s holiday shopping landscape. Despite inflation and the high cost of living, 65% of holiday shoppers plan to maintain their spending levels from the previous year, while an additional 15% anticipate increasing their holiday spending. This consistency presents an opportunity for retailers to reflect on past performance to optimize strategies for the upcoming season. Additionally, the report unveils a significant behavior — the self-treating trend — with 61% of shoppers (the majority of whom are millennials) indulging in personal purchases while holiday shopping.
The Salsify 2024 Consumer Holiday Shopping Report offers a benchmark analysis drawn from insights gathered from 1,026 shoppers across the US and UK. The report equips retailers and brands with invaluable insights into consumer behaviors, preferences, and trends, empowering informed decision-making within the dynamic landscape of the retail industry.
5 key trend insights revealed in Salsify’s 2024 Holiday Shopping Report show:
The ‘treat yourself’ phenomenon hints of a holiday season of self-love.
2024 reveals a prominent ‘Treat Yourself’ trend: A striking revelation from the report is the significant portion of holiday shoppers indulging in self-gifting. More than half (61%) of shoppers, particularly millennials (73%) and Gen Z (68%), are inclined to purchase items for themselves while engaging in holiday shopping.
In the shopping channel showdown, Gen Z and Gen X skip online, while millennials and boomers opt for Prime.
Salsify’s holiday report reveals intriguing insights into top gift discovery channels across generations. Surprisingly, physical retail stores emerged as Gen Z’s top choice (58%), surpassing Amazon (55%) and TikTok and Instagram (54%), mirroring Gen X’s preference, with 62% turning to stores for holiday gift inspiration. However, Amazon remains the go-to for other demographics, with 53% of Millennials and 54% of Baby Boomers relying on online marketplaces. With Prime Day on the horizon in July, retailers have a golden opportunity to capture early shopper engagement with enticing deals and exceptional experiences.
October signals the start of holiday shopping bounty.
When it comes to holiday gift purchases this year, October emerges as the launchpad month, with 27% of all shoppers making their first moves, led by Gen X (30%) and followed closely by Millennials (29%). As November approaches, 26% of shoppers will join the fray, with Gen Z (32%) and Millennials (29%) taking the lead. Cyber Week is anticipating to capture 19% of shoppers, while 16% plan to wait until December. Interestingly, 7% are adopting a year-round approach.
Shoppers share tactics for Black Friday & Cyber Monday.
As the buzz for Black Friday and Cyber Monday builds in 2024, shopper plans come into focus. According to the benchmark report, 62% are gearing up for Black Friday, with Gen Z leading at 75% and millennials close behind at 69%. Even Gen X (62%) and baby boomers (43%) are getting in on the action. Looking ahead to Cyber Monday, 45% of shoppers are ready to hit the virtual aisles, with Gen Z (52%) and Millennials (49%) showing the most excitement. Gen X (45%) and Baby Boomers (33%) are also planning to join the digital shopping spree.
Shoptastic Selections: Consumers share top product picks for every wishlist.
Holiday shopping preferences this year reveal an interesting mix! Fashion and apparel gifts are slated to take the lead, grabbing the attention of 57% of shoppers, with personal care and beauty gifts close behind at 53%. Electronics also came in strong at 49%, while food and beverage gifts are on the radar for 44% of folks. It seems like alcohol gifts follow closely at 37%. Toy and baby gifts seem to be popular too, with 33% planning to buy them. For those outdoor enthusiasts, sports and outdoor gifts are catching the eye of 28% of shoppers. And hey, don’t forget the fur babies! Pet gifts are on the list for 20% of shoppers, while home improvement gifts round it out at 19%.