By Alex Melamud, Technology Investor, Permira
As commerce accelerates, especially heading into the holiday shopping season, retailers are working hard to manage growth while also reinventing the digital customer experience to account for a new range of shopping preferences brought on by the pandemic.
A customer’s digital experience is often the first – and sometimes only – interaction consumers have with brands. Online shopping experiences not only impact live purchasing behavior, but also have a lasting influence on a brand’s perception and consequently, a customer’s desire to return to the site for future purchases.
Ensuring a seamless digital experience today requires businesses to evolve past legacy website performance and optimization tools and find new ways to capture and analyze customer data in real time. This often means leveraging a range of innovations rooted in AI algorithms that can analyze how online activity indicates the health of a customer experience.
For example, when you find yourself clicking excessively on a specific button because the next screen seems to be delayed, you may also wonder how that feedback is communicated back to the business. FullStory, the leading company in the digital experience intelligence (DXI) industry, calls these “Rage Clicks™,” indicating that the behavior is drawn out by growing impatience on the user end. And by understanding anonymous digital interactions on the web, FullStory has been able to determine different patterns of behavior that signal important aspects of the buyer’s experience.
DXI has emerged as a core enterprise competency that enables companies to address blind spots, friction points and previously unknown vulnerabilities in the digital experience. It yields specific insights and opportunities across an entire organization – product, customer success, engineering, and marketing professionals can all benefit from a better understanding of customer needs and challenges. And in turn, the online consumer experience improves as companies gain more actionable and valuable signals from the growing volume of data.
It’s no surprise, then, that a survey by Forrester Research found that 64% of North American analytics and measurement professionals said their businesses now rely more heavily on real-time insights drawn from user behavior on their websites – up from less than half in 2019.
Traditional analytics have been upended by AI- and ML-enabled approaches that can instantly uncover nuanced patterns and anomalies in customer behavior. As a result, retailers can leverage both structured and unstructured data. By capturing, interpreting and analyzing behavioral patterns, site owners can fix and enhance various aspects of their customer’s digital presence, all in real time.
As a result, developers have the ability to better understand user issues, identify opportunities for optimization, eliminate bugs, prioritize fixes and measure the impact of changes. Information is aggregated and, certainly in the case of FullStory, anonymized in ways that protect the identities of individual customers — and all of these patterns combine to tell the story of overall user experience.
Worldwide e-commerce sales totaled $4.28 trillion in 2020, with projections of reaching $5.4 trillion by 2022, according to Statista. It’s a huge and growing market, there’s no doubt. As companies continue to prioritize their digital strategy, the DXI market, already worth more than $10 billion, will continue to grow at an annual rate of 20%+ for at least the next five years.
With the explosion of online shopping, being able to perceive in real time where customers are experiencing their frustrations and help to fix them is a high-value gift to people on both sides of the retail transaction.
About the author
Alex focuses on Permira’s Growth Opportunities strategy (PGO), which makes large-scale minority, non-control investments. He also covers investment opportunities in the Technology sector. Alex has worked on numerous transactions including FullStory, G2 and Seismic. He currently is a Board Observer at FullStory and G2. Prior to joining Permira, Alex was a Senior Vice President at TA Associates, where he led growth equity and buyout investments in the software, security, internet and digital media sectors. Prior to that, he worked at Lehman Brothers and Barclays Capital in Menlo Park, CA. He also worked in strategy and operations at DiscoverOrg.
With more than half the global population engaging with social media platforms, Social Commerce is growing exponentially. Derek Chew, the CEO of Fullmoon Digital, explains that agile marketing strategies that leverage Social Commerce have become mandatory for a brand’s success.
“Our business simply wouldn’t operate without Inventory Planner. It’s absolutely worth the investment for us – the ROI is massive” – John Mac, Co-Founder
From augmented reality (AR) and virtual try-on tools to shoppable videos, personalized product recommendations, and enhanced content, there are many ways brands and retailers could offer immersive digital product experiences.
Generative AI chatbots are a significant paradigm shift for the retail and eCommerce sectors. By offering advanced features like understanding complex queries, performing tasks, and maintaining conversational context, they have the potential to dramatically improve customer loyalty and Net Promoter Scores (NPS).