2019 Digital Trends Experience IndexContents 1. Foreword by Adobe 3 2. Executive summary 42.1. Acknowledgements 6 3. Quest for great CX powered by technology 7 4. Data is the new everything 13 5. Customer journey management holds key to personalisation 19 6. Control of data: compliance and walled gardens 25 7. Increased uptake of artificial intelligence 30 8. Recommendations 36 9. Appendix 1: Respondent profiles 38 10. Appendix 2: Other selected charts 43 2019 Digital Trends 21. Foreword by Adobe. The battleground for customer loyalty has moved from the tangible to the intangible. From products and services to experiences and ease of access. Its why Spotify has become more than a streaming service, why Swisscom offers a digital experience that adapts to customers in real time, and why Sky UK uses AI to keep refining and personalising its services. In this ninth edition of our Digital Trends research, conducted in partnership with Econsultancy, we see that brands are increasingly becoming data- driven, as you may expect, but also more customer- experience (CX) centric. Today, a personalised customer experience is the ultimate differentiator. Where companies once relied on products and reputation to stay relevant, constant disruption and an explosion of choice require them to offer more. Our report shows that its not enough to simply collect data businesses need to manage and use it effectively to cover all aspects of the customer journey. They need to empower teams with the processes and technology to draw out insights and come up with exciting ways to serve their audiences. This year, we surveyed over 12,500 marketers, creatives and IT professionals, and the results were clear: brands are intent on taking control of their data. Over half (55%) of marketers say they have prioritised better use of data this year, and 63% of IT professionals say data collection and unification ranks among their top priorities. This could well be driven by concerns around walled gardens, with 44% of agencies making it clear that relinquishing control over their data is their number one headache. But protecting customer privacy is also a compelling driver. Europes General Data Protection Regulation (GDPR) is now in place, with America poised to follow suit in the near future, and major companies are beginning to pay the price for a disjointed approach to handling personal information. While most brands agree that regulations will have a positive impact on their organisation, they understand the need for greater control to keep pace with the market while maintaining integrity. This will be the major storyline for brands through the rest of 2019, and into 2020. Almost two-thirds of respondents admit they still have a fragmented approach to marketing and CX technology, and 28% of marketers say concerns over consumer privacy keep them up at night. Encouragingly, our report reveals that brands are ready to do things differently. They are stepping up to the challenge by admitting it is time for change, and our research reveals the steps they are taking to bring this change to life. John Watton Senior Director, Marketing Adobe 2019 Digital Trends 32. Executive summary. The 2019 Digital Trends report, produced by Econsultancy in partnership with Adobe for the ninth year running, is based on a global survey of 12,815 marketing, advertising, ecommerce, creative and IT professionals working for both brands and agencies. The research looks at the most significant digital-related trends that are driving marketing and customer experience strategies in the short to medium term, with a focus on understanding what companies are prioritising and what they regard as the greatest challenges. Key insights from this years research include: Those companies that are succeeding are delivering first-class, personalised customer experiences built on a foundation of integrated marketing and CX technology. Those organisations classifying themselves as very advanced at customer experience are almost three times more likely than their peers to have exceeded their top 2018 business goal by a significant margin. But only 10% of responding companies regard themselves as very advanced at CX, and the same percentage describe themselves as digital-first . Digital-first companies are 64% more likely than their peers to have exceeded their top 2018 business goal by a significant margin (23% vs. 14%). CX leaders are four-and-a-half times more likely than other companies to have a highly integrated, cloud- based technology stack (32% vs. 7%). Companies with a highly unified technology stack are 131% more likely to have significantly outperformed their top 2018 business goal (30% vs. 13%). Half (50%) of client-side respondents say their organisations are planning to increase CX-related technology spending in 2019, and only 5% say they plan to reduce it. The most dominant theme emerging from this years research is the importance of customer data, and the greater levels of urgency that are apparent when it comes to harnessing data for commercial gain. The larger organisations surveyed for this research (£150m+ annual revenue) regard data-driven marketing that focuses on the individual (24%) as the single most exciting opportunity for their organisations in 2019, ahead of optimising the customer experience (19%) in second place. Marketers surveyed for this research are particularly focused on data. Most marketers (55%) expect better use of data for more effective audience segmentation and targeting to be among their top three organisational priorities during 2019. The second most popular choice for marketers is improving customer intelligence and insights for a holistic customer view (42%), another data-related discipline. Customer journey management (33%) is the top digital-related priority for larger organisations. For these larger companies delivering personalised experiences in real time (37%) is the most exciting prospect in three years time. 2019 Digital Trends 4Companies are seeking greater control and ownership of their data, with a focus on compliance and concern about walled gardens . More than a quarter (28%) of marketers cite difficulties personalising customer experience without violating consumer privacy as a challenge most likely to keep them awake at night. Across all regions, significantly more businesses say they have experienced a positive rather than negative impact from the increased focus on consumer data protection. More than half (52%) of CX leaders report a positive impact , compared to only 8% who see a negative impact . Those in Europe where companies have been focused on becoming compliant with the EUs General Data Protection Regulation (GDPR) are significantly more likely than those in other regions to report a negative impact (24%), though even here a higher proportion report a positive impact (34%). More than four in ten (44%) agency respondents working in advertising describe walled audience data silos, such as Facebook and Google as one of the three biggest challenges, making this their clients number-one headache ahead of other high-profile challenges such as ad viewability (20%) and ad fraud (17%). AI has gained significant traction in the last year, but there are still significant barriers preventing organisations from reaping the benefits. Survey respondents are most likely to describe themselves as curious (36%) when it comes to the impact of automation, positioned in the context of self-driving cars and grocery stores without employees . Just over a quarter (26%) of client- side respondents are really excited , while 22% are cautious and 5% are happy . Relatively few survey respondents report more negative emotions, with only 4% saying they are afraid and 1% angry . Where there is inertia within businesses around AI uptake it is due to the lack of awareness and understanding about the how and why of artificial intelligence. A third (33%) of larger organisations cite no perceived need , while 37% concede a lack of knowledge on how they can use AI, and 38% have not yet assessed how they could use AI. There has been a 50% increase since last year in the proportion of larger organisations stating they are already using AI, up from 24% to 36%. CX leaders are twice as likely as other companies to be using AI within their organisations. 2019 Digital Trends 52.1. Acknowledgements As well as all survey respondents, Econsultancy and Adobe would particularly like to thank the following interviewees for their contributions to this research: Lynne Biggar, Chief Marketing and Communications Officer, Visa Angus Cormie, Ecommerce Director for Consumer and Small Business, Dell Kristof Fahy, CMO (Interim), Checkatrade Clive Grinyer, Consultant James Keady, Director of Digital Engagement for Asia and EMEA, Citibank Jennifer LaFrance, Director of Global Digital Strategy, McCormick & Company Laurence Parkes, Chief Strategy Officer, Rufus Leonard Ivan Pollard, Global CMO, General Mills 2019 Digital Trends 6A persistent theme running through recent Econsultancy/Adobe annual Digital Trends reports has been how businesses must remain focused on the CX vision. First-class, personalised customer experiences need to be at the centre of commercial strategies because they are vital for competitive differentiation and, increasingly, just for survival. This years report serves as a wake-up call for those companies that are failing to make progress when it comes to transformative CX improvements, including the strategy and technology that are required to underpin this. As noted by Econsultancy Founder Ashley Friedlein in his round-up of key marketing and digital trends for the coming year, “customer experience is perhaps as much a mindset and business philosophy as a discipline” 1 . 3. Quest for great CX powered by technology. 1. econsultancy/ashley-friedlein-marketing-digital-trends-2019/ CX leaders are almost three times more likely than their peers to have exceeded their top 2018 business goal by a significant margin. 2019 Digital Trends 7Figure 1: How do you rate your company in terms of customer experience (CX) maturity? 8% 44% 38% 10% 5% 45% 42% 8% Immature we havent even started on this journey Not very advanced we have some ad hoc tactical initiatives but no real CX strategy or tech capability Quite advanced our strategy and technology are aligned but CX is not fully embedded yet Very advanced our strategy and technology are well aligned around CX to successful eect 2015 2019 Respondents 2019: 5,153 Respondents 2015: 937 While customer experience is widely recognised as crucial for commercial success, the research suggests that organisations are struggling to translate this conceptual understanding into an operational reality. Whether CX is a mindset, philosophy or a discipline, too many companies are failing to seize the initiative, as is evidenced by our global survey of business professionals completed by thousands of respondents in North America, Europe, Asia Pacific and other regions. Only one in ten organisations see themselves as very advanced in respect of customer experience just a two-percentage-point improvement since 2015 when we last asked this question (Figure 1). Most companies (52%) still categorise themselves as either being not very advanced (44%) or immature (8%). While many companies have made genuine progress, others are only just waking up to the magnitude and difficulty of the task, with legacy CX and marketing technology infrastructure no longer seen as fit for purpose in a world of increasing complexity. Customer experience is perhaps as much a mindset and business philosophy as a discipline. Ashley Friedlein Founder, Econsultancy “ 2019 Digital Trends 8Figure 2: Proportion of responding companies that exceeded their top 2018 business goal by a significant margin (for different levels of CX maturity) 37% 18% 10% 8% Very advanced - our strategy and technology are well aligned around CX to successful eect Quite advanced - our strategy and technology are aligned but CX is not fully embedded yet Not very advanced - we have some ad hoc tactical initiatives but no real CX strategy or tech capability Immature - we haven't even started on this journey Respondents: 5,150 2. go.forrester/blogs/the-sorry-state-of-digital-transformation-in-2018/ Figure 2 serves as a potent reminder of the commercial benefits for companies that have prioritised the customer experience. Those organisations classifying themselves as very advanced at CX (CX leaders) are almost three times more likely than their peers to have exceeded their top 2018 business goal by a significant margin (37% vs. 13%). The lack of progress by many organisations is also evident from the steady and persistent decline in the proportion of companies that see themselves as digital-first organisations, dropping to just 10% in 2019 (see Figure 31 in Appendix 2). This hesitancy around digital transformation is consistent with research by analyst firm Forrester which also shows a large amount of inertia in this area 2 . According to its 2018 study of 1,600 business and IT decision-makers, the majority of organisations (56%) are attempting digital transformation, but the level of investment and ambition is insufficient when it comes to making functions such as marketing and customer service truly fit for purpose in the digital age. Only one in ten organisations see themselves as very advanced in respect of customer experience. 2019 Digital Trends 9Figure 3: Proportion of responding companies that exceeded their top 2018 business goal by a significant margin (by level of digital maturity) 23% 16% 14% 15% We are a digital-rst organisation Digital permeates all our marketing activities Digital permeates most of our marketing activities Digital marketing is very much separate Respondents: 3,439 Companies with a highly unified technology stack are 131% more likely to have significantly outperformed their top 2018 business goal. It should be noted that many organisations that were not born as digital companies are not necessarily striving to be digital-first. Omnichannel capabilities have risen in importance, with the aim for many companies to prioritise customer centricity over a digital-at-all-costs mentality. That said, just as we saw that CX-focused companies are outperforming their peers, so it is true that digital-first companies are reaping the benefits (Figure 3). Digital-first companies are 64% more likely than their peers to have significantly outperformed their top 2