Image credit: Adobe Stock/pushish images.
Over the last several years, digital transformation has driven companies of all types — not just retailers — to digitize their businesses. As a result, the digital economy is rapidly becoming the economy. This shift is creating new rules and expectations, and new opportunities for brands to either thrill or disappoint their customers.
To understand the current and future impacts of the digital economy on consumers and businesses, Adobe surveyed 13,000 consumers and 4,250 customer experience and marketing professionals across 14 countries — the United States, United Kingdom, Denmark, the Netherlands, Sweden, Germany, France, Australia, New Zealand, Japan, India, Singapore, Thailand, and Malaysia. These are the highlights from our research:
The digital economy plays an increasing and empowering role in most consumers’ lives. Eighty-four percent of global consumers say the digital economy plays a role in their lives, and over half (53 percent) say it plays a strong role — nearly one in five (18 percent) say “the digital economy IS the economy.” Younger consumers (66 percent of Gen Z and 65 percent of Millennials) are even more likely to say the digital economy plays a significant or dominant role in their lives.
The digital economy is where companies do business. The overwhelming majority of marketing and customer experience leaders (83 percent) say the digital economy is playing a major role in their businesses, with half (50 percent) describing the role as significant, and 15 percent saying their businesses would not exist without the digital economy. Nearly one in five (18 percent) say the digital economy IS the economy.
Trust is paramount in the digital economy, and #1 in challenging economic times. When economic conditions are uncertain, consumers rank trust #1 when choosing where they spend their money, followed by price, selection, and relevance. Younger consumers are particularly strong in this view: When times are tough, trust outranks price by 13 percent for Gen Z and 15 percent for Millennials.
The digital economy is changing customers’ expectations.
- Over 70 percent of marketers say their customers now expect “much better experiences.” And the larger a company is, the higher their customers’ expectations are.
- Younger consumers have the highest bar for customer experiences, and are much more likely to expect personalized experiences from brands. Nearly 60 percent of Gen Z consumers and more than half (53 percent) of Millennial consumers expect more personalized experiences from brands, compared with 39 percent of consumers overall.
Brands and consumers don’t see eye-to-eye on the quality of customer experiences: A whopping 85 percent of marketers say their customers’ experiences are “amazing,” and are impressed by their companies’ ability to keep up with rising expectations. On the other hand, only 63 percent of consumers are happy with their customer experiences. That’s a 22-point gap between what marketers believe they’re delivering and how their customers feel.
As economic conditions get worse, customer expectations don’t fall — they rise.
- Half of consumers (50 percent) say they expect better experiences from brands when the economy is down, and over a quarter (28 percent) say their expectations are much higher in a weakened economy.
- Younger consumers are even more likely to have high expectations — 65 percent of Gen Z consumers and 35 percent of Millennials say their expectations are much higher in tough economic times.
- Only 14 percent of all consumers say they lower their expectations when economic conditions get worse.
The digital economy is having positive impacts on companies and employees.
- 70 percent of people say the digital economy is helping them work smarter and more creatively, giving their companies a competitive advantage — only 7 percent say the digital economy isn’t helping their companies at all.
- 79 percent say the digital economy is helping them grow their careers, with 26 percent noting it’s helping them grow within their professions. Over half (53 percent) say it’s opening up economic opportunities outside of work, including side hustles and consulting.
The digital economy is helping marketers work smarter and compete more effectively. Nearly four in five marketers (79 percent) say the digital economy is helping their businesses: 42 percent say the digital economy is helping their companies work smarter and more creatively, and 37 percent say it’s supercharging their companies’ success and giving them a competitive advantage.
Digital technologies play a broad and important role in their customer experiences.
- The vast majority (85 percent) of customers say digital technologies play a role in their customer experiences, and 40 percent say digital technologies are essential to their customer experiences — both in-person and online. These numbers are even higher for younger consumers, reaching 94 percent and 54 percent, respectively.
- Nearly all marketers (98 percent) say digital technologies play a role in the experiences they provide to their customers, and 69 percent deem digital technologies an “essential” part of their customer experiences — including in-person experiences.
The future of shopping is digital. In the next two years, Gen Z consumers expect to spend the majority of their time shopping in online or virtual spaces (71 percent) — including online stores and marketplaces, social pages, and immersive worlds — versus physical stores (28 percent).
Companies are under-utilizing data and digital technologies to engage customers. Only 54 percent of marketers use data for table stakes-level purposes, such as to help understand when best to send a communication, or which channel to use. Less than half use digital channels to communicate with prospective customers (46 percent), use data to identify high-value prospects (44 percent), use digital content to reach prospects (43 percent), use digital technologies to identify upsell opportunities (43 percent), or use digital documents and e-signatures to accelerate deal closures (42 percent).
Consumers expect new formats to be a big part of their near future experiences. Over the next two years, customers expect new and emerging formats to be part of their customer experiences:
- 3D: 76 percent of all consumers (and 87 percent of Gen Z consumers) expect to be able to see 3D images of brands’ products in their online stores.
- Video: 84 percent of all consumers (and 90 percent of Gen Z consumers) expect to be able to see videos of products.
- AR/VR: 76 percent of all consumers (and 81 percent of Gen Z and Millennial consumers) expect to be able to experience products via AR or VR.
- Digital-to-Physical: 59 percent of all consumers (and 72 percent of Gen Z and Millennial consumers) expect the ability to build a digital product that can be converted into a physical product, such as designing a shoe online or virtually, then being able to purchase a physical version.
Brands are ramping up to bring more digital magic to their customer experiences over the next two years in the following ways:
- 76 percent will enable customers to build virtual products that can be converted into physical products.
- 74 percent will offer virtual or immersive events such as concerts, fashion shows, or trade shows.
- 74 percent will use virtual tokens, credits, or NFTs to trade for products or experiences.
- 72 percent will offer virtual games for customers to win points or prizes.
- 72 percent will offer customers VIP access to virtual experiences with influencers or celebrities.
- 71 percent will offer customers virtual or immersive spaces to hang out with their friends.
Nearly every customer experience is now touched by digital in some way. Embracing digital technologies — whether customer-facing or behind the scenes — will enable brands to meet customers where they are with memorable experiences today, and be prepared to offer even more immersive experiences in the future.