Hi, everyone, and welcome to Digital Experience Trends to Watch for 2024, a joint session from Adobe and Medallia. My name's Andrew Custage, and I'm the head of Market Research Insights here at Medallia. I support our clients through the use of external research data sets to understand what consumers think and how they're making shopping decisions through methods like survey collection, and also how consumers are behaving through data sets like credit and debit card transaction panels and smartphone location panels. Hey, everybody, my name's Bruce Richards. I'm with Adobe. I lead Industry Strategy and Marketing for Retail and Consumer Goods, and what that means is, I keep my finger on the pulse of everything that's going on around the industry. That's why I work very closely with Medallia to understand the trends, the insights, and the consumer behaviors that are going to influence behavior for consumers across retail and consumer goods. So, Bruce, I'm really excited to be joining you today and to talk about this topic. In particular, we're planning on discussing three main trends and bringing some of the latest research from both Medallia and Adobe together to understand customer experience and the role that it's playing entering 2024 for consumers as they decide what to buy. Also, the importance of digital as a channel and how it's shaping the shopping experience overall. And then lastly, we'll take a special focus about the most important considerations for using digital to capture younger buyers. If anyone's unfamiliar with the partnership between Medallia and Adobe, you can think of us working together as a group of products and services that provides a cross-channel view for brands to understand all of the digital interactions they have with their customers, and using feedback from both behavioral data and other signals to understand what's needed to drive great customer experiences, and then to actually act on them. So, Bruce, together between Adobe and Medallia, we have a lot of experience with helping our brand partners achieve results in the form of customer acquisition, conversion, and repeat engagement, and I'm excited to bring learnings of both Medallia's products and services and the research we've each conducted together to understand this better. Yeah, I'm excited, too. You know, look, you know, we're in the business at Adobe of helping our customers create great customer experiences, so, you know, being able to leverage your insights and work together with you is really exciting. Let's kick it off and start then by talking about customer experience as a whole and the role that it's playing in the end of 2023 and into the beginning of 2024. The first main theme is around this idea of the macroeconomic environment and the challenges that many consumers are facing, and we'll talk more about our view on how this really points to the main takeaway of CX mattering more now than ever. We've asked consumers a variety of questions around how their shopping decisions have evolved over the course of 2023 and into 2024, and we found some really interesting behaviors. A lot of them have to do with the amount of research that consumers are now doing in order to make the best decision of what to buy and where to buy it. For instance, we've seen that over half of consumers have said things like, "They're doing more research now than they previously did to find where they can get the best price for a product they want," or, "They're doing more research now to understand if there's going to be a big difference in price between buying from a brand online versus in person." And we see a lot of other themes similar to this fall in as far as people deciding that they would no longer use a third-party platform for a purchase, or potentially they might even be trading down to cheaper products or secondhand products. So, Bruce, my question overall is in this environment where consumers say they're being more price-conscious, what's your takeaway on how brands can respond to this? Yeah, when I look at that first statistic, and you know, we've talked about this, about, you know, price sensitivity and looking for best prices, you know, brands can't always control what consumers are going to do. So that searching for a better price is something that's out of their control. What they can control is the experiences that will hopefully override that price sensitivity, and they want to give consumers the best possible experience. So even if price is an issue, there are other factors that will play into the purchasing decision. And at Adobe, we talk a lot about how, you know, consumers don't buy products, they buy great experiences. We'd like to think that, you know, after all of this price volatility dies down, you know, the winners in this space are going to be the ones who focused on delivering great customer experiences. You're not going to guarantee that every price-sensitive consumer is going to stay with you, but the majority will because of the value that they put behind experiences. I love that point, and it brings to mind to me just a principle that I feel like is sometimes lost around the idea of understanding who you are as a brand, how you're positioned versus your competition, and who your customer really is at the end of the day. Mm-hmm. I think a lot of times brands are eager to try and be everything to everyone, but when you think about years or decades worth of positioning that's been built around experience and quality, to try over the course of a year to pivot to just be in a race to the bottom on price alone is likely not a worthwhile strategy. And, you know, what you just said resonated with me a lot around understanding that you might not win on price alone, but what are you bringing to the table instead? And that's where it seems like experience does matter so much. Yeah, I agree. That race to the bottom is... You know, there's no winner there, right? Because everybody's giving up their margin to keep a customer. So, you know, like I said, it's products versus great experiences, and I think the great experiences are going to win. So on a related note around how consumers are searching for ways to afford the products that they want and need, we have noticed another big theme around the emergence of digital purchasing platforms, not just in the past year, but certainly accelerating over the course of the past few years, and one of them is around buy now, pay later, using our credit and debit card transaction data here at Medallia, we can see that there's been rapid growth and continues to be growth for some of the leading platforms like Klarna or Afterpay, among others. We've seen even year-over-year, they've continued to grow, building on what's been ninefold or even more growth over the past four years. Bruce, can you talk a little bit around how buy now, pay later is fitting into retailer strategies, and if there are considerations about the experience they're delivering if they are partnering with a buy now, pay later platform? Yeah, we've been watching buy now, pay later for quite a while, and the growth has been incredible. In fact, we just, we just pulled our, 2023 holiday reporting, and for the year of 2023, buy now, pay later was about $75 billion in sales. Just the holiday period alone was $16.6 billion. That's a 14% growth year-over-year. So- Wow! Not going away, and it's becoming a very big part of a lot of consumers' behavior, especially as we talked about that price sensitivity earlier. It's a way for them to have immediate gratification, get what they want, but maybe spread those payments a little bit more over time from an affordability perspective. What retailers need to do with these platforms is make sure that they're seamlessly integrated into their experience offering. They can't feel like a standalone platform, something that's outside of the overall experience. The more that it's integrated into the buying experience, the customer is gonna understand this isn't something separate, it's part of my relationship with the retailer. The platforms offer a ton of data as well to the retailer from a customer behavior, interaction, and preference perspective. So the retailers need the ability to pull that data in and use it to enhance their customer profile so they can understand exactly how those customers are interacting with their brand and build more robust profiles that will enable deeper, deeper personalization and engagement. It also allows them to sort of curate experiences for consumers based on their spending habits. You know, maybe they offer up different products based on their propensity to use buy now, pay later, you know, and just create different experiences based on that behavior in the context of their overall, relationship with the retailer. It's also really kind of interesting because these platforms present a different platform for retailers to speak to consumers, because retailers can advertise on these platforms as well. Understanding who's interacting with them in the context of their purchase from you, and then circling back and giving them some kind of messaging, whether it's promotional or new product releases, or things that are conducive to the buy now, pay later environment, it offers another channel for communication. Your point around the fact that this is not just another payment method that's integrated within a brand's four walls, but it is in itself, in many cases, a marketplace, and it's a product discovery, Yes ... engine. It, it's an acquisition channel for brands. It reminds me a lot- Yeah ... of another point I'd like to bring up on here, which is the emerging trend that we've seen and persisted over the past year for third-party ordering platforms, too. Mm-hmm. A couple of examples on here, more food-based, although this could apply to other industries, too. But when you think about grocery-focused, third-party ordering platforms, like an Instacart or a restaurant-focused one, like DoorDash or Uber Eats, we have seen that despite consumers saying that they intend to do more research about where they're purchasing products and they're more cognizant of price, there still are certain comforts or habits that don't seem to be dying, even as we've moved past the heights of COVID-19. And it does seem to be based on the data we've seen here, third-party delivery, third-party ordering's really not going anywhere. So, I mean, I at least see, but I'd be curious to hear your thoughts, that there has to be consideration of the fact that there is this permanent, sizable percent of business that is gonna happen outside of a brand's four walls, and they don't always have full control over that experience. So, you know, how do they make that better, or how do they avoid customers holding them accountable for things that happen outside of their four walls? First, I don't think they can avoid being held accountable for the behavior outside of their four walls. You know, this shift to platforms like Instacart and Shipt and DoorDash. They were born out of necessity. Consumers had no other way to get the things they wanted during COVID than to do it digitally. So, what we're seeing now is a long-term adoption of that convenience. The convenience factor has become an overriding piece of the experience, how easy it is for me to get what I want. But I think there's also a little bit of a balancing act. So if you look at the grocery number, you know, a 5% reduction year-over-year, I think what's happening there is consumers are looking at, you know, what products from a grocery perspective lend themselves to an Instacart kind of purchasing environment versus the things that I want to go into store and purchase myself, like perishables. So there's a little bit of a product balancing act going on with the consumer. But from a kind of who owns the experience perspective, you're not getting away from it as a retailer, and you have to figure out how to work closely with your partners to make sure that they're delivering the experience that your consumer is expecting from you, and hold them accountable down the value chain and make sure that, you know, that everybody's stepping up their game. Because if these platforms are being fully integrated into people's lifestyles, responsibility in the consumer's mind lives with the person that they bought from. They don't care what Instacart did or what Shipt did. So you have to figure out how to make that standard, you know, consistent across the board. I really agree with that point, especially we've seen in some cases, brands have essentially made the customer-facing application still appear as if it's within the brand's ecosystem, but fulfillment might be done by a third party in more and more cases. But it speaks especially to your point, though, of consumers aren't thinking consciously about who did what step of the process between the creation of the product, the delivery of the product, and so on and so forth. They will hold the brand accountable for the experience overall. So the way that accountability really plays itself out, I couldn't agree more with what you said. Yeah, it means brands choose wisely because service level standards aren't gonna be adjusted based on the fact that you're working with a partner. Service levels in general, to speak on them with one more data point I'd like to bring up here, which is we've spoken a bit around consumer cost consciousness. We've spoken a bit about their, their purchasing and their browsing behavior across various platforms. One thing that does really stand out in this area, too, though, is over the past year, we've seen a lot of sentiments from consumers around the notion that brands can't just get away with their response to budget issues, cost consciousness, increasing costs. Generally, a lot of consumers have noticed or have felt that customer experience is eroding in many cases in the face of rising labour costs, rising production costs, and so on and so forth. So for instance, we see it's more likely that consumers would say something along the lines of, "Customers today seem to be taking shortcuts that are making the customer experience worse, or stores are using higher costs or labor shortages as an excuse to provide worse service." It's more likely people would say that versus some things like them saying they feel the experience is more personalized now than a couple of years ago, or that they notice better customer service that seems to justify higher prices. Bruce, to me at least, I'm seeing that there's a bit of a crisis moment maybe to some brands, but, you know, is this what you would have expected to see? Yeah, I was really kind of interested in these numbers in particular when you shared them with me because, as I said earlier, you know, consumers buy experiences versus products, and when all other things are equal, you know, what's gonna win out? And it's the experience. We did some loyalty research earlier this year, and I think that when I look at some of these higher numbers, they tie exactly back to what we said, that consumer tolerance is getting really low. So when they're looking at price as an issue, and then they resolve who they're gonna go in to do business with, the experience is gonna come into play. You know, we, we looked at, you know, what causes consumers to turn away from a brand, and they're, and they're only giving you 2.4 bad experiences before they walk away. 2.4 bad experiences, so that means consumers aren't playing by the three strikes you're out rule anymore. They're walking away after just over two experiences, and you would think, "Okay, if they're gonna walk away after 2.4 experiences, then maybe it takes 2.4 experiences, 2.5 experiences to get them back and pledge their loyalty." Guess what? There's an enormous gap between those two things. They're walking away after 2.4 bad experiences. It takes 6.5 good experiences to get them back and have them pledge their loyalty, so closing that gap is, is a big challenge for consumers. It's much easier to keep them and do what you need to do to keep them from an experiential perspective than it is to get them back after they walk away. It reminds me a bit of, I guess, that old phrase of, you know, your reputation could take a lifetime to build and a minute to ruin or- Yep ... something along those lines. But- Yep Yeah, I mean, I feel like, as you just said, the burden to win a customer back after a poor experience, it's almost as if pursuing cost optimization alone at the expense of everything else, it's like we said before, for how long brand positioning has been built and ingrained in the minds of consumers, the worst thing that I think could happen would be for brands to look back at 2022- 2024, or, you know, who knows exactly when this period of cost consciousness might end, and say, "We sacrificed everything that we spent decades building up about who we are to consumers in the face of a short-term response to something that, you know, ultimately we were never gonna be positioned that well for anyway. Yeah, and if COVID taught us nothing else, it's that, you know, choice is a click away. So consumers, when they're not getting what they want, they just... You know, you don't have to get in your car and drive to another place to get what you want. You just click, and you, and it's there. 100%. So beyond this macroeconomic context, let's talk a little bit around key strategies and opportunities that brands are really pursuing to win in this environment, and there's really none bigger at the moment than this emphasis on personalization. So let me share a little bit around personalization as a differentiator and just some of our findings. One, to begin with, would be the importance that consumers place on feeling that the interactions they have with brands were not just satisfactory but had an element of personalization attached to them. We see that more than four out of five consumers would say that they drive their choice of one brand over another based on personalized experiences in at least half of their shopping situations, and we also see that more than half of consumers want brands to add personalization, not just to some, but truly more than half or even most or all of their interactions having some element with it, too. Similar to the response around the level of customer service, we've seen that consumers have often been left dissatisfied today with the amount of personalization that they have experienced. 70% of consumers feel like brands could be doing more, and more than half can recall cases where they've been asked for information or the brand has said they're going to do things to make an experience more personalized and then just completely failed to deliver on it. So with all that rolled up, it doesn't surprise that we actually see only one in four consumers say that on their most recent interaction with a brand, they would give what is generally referred to as a high score on a scale of 1- 10, a 9 or a 10, as an indicator that they truly felt the experience was personalized. You're only seeing that 26% of the time.... So from our perspective here at Medallia, we've looked to understand in more detail what is it that consumers actually want, or what do they respond to the best among the many different attributes that a brand could pursue in the interest of personalization? What we've found is that there are many different features that consumers respond very positively to. Generally, they fall into a few different themes, although personalization can mean many different things. But for us, we generally see the best responses to features of personalization that center on things like continuity of knowledge, where the brand has shown that they have the capabilities and the attention to keep track of who a consumer is and recognize them across touchpoints. For instance, not requiring the consumer to re-identify themselves, their needs, their history, when they go from one channel to the next or from one customer service touchpoint to the next. Additionally, things like rewards and recognition or flexibility and options on how consumers want to be served play a big role, too. And beyond that, also some other elements that are commonly featured within a personalized experience, like proactive touchpoints, tailored content, and recommendations based on customer history and other attributes, and then things like a human touch and the personality that the brand shows when interacting with the consumer. So for all of these together, we do see continuity of knowledge and rewards and recognition have some of the attributes that rank the highest, but there are certainly many more that play a role in here, too. I know that's a lot that I just introduced at once, so let me just pause for a second, and, you know, Bruce, what are your thoughts on, on what makes personalization strong? And I'd love to also hear from you, how do brands do this well? Yeah, I mean, look, you've got a broad spectrum of things here that are important to consumers from a personalization perspective, whether it's continuity of knowledge to flexibility of service, rewards. There's a broad spectrum there. For us, what we try to do is sort of consolidate those down into a few core pillars and speak to our customers about how they can use those to achieve excellent personalization at scale. So leading brands are building capabilities around unified data, tailored content, omni-channel journey orchestration. All of those things relate back to your list or your spectrum that you just presented. What we do is we talk about personalized experiences relying on three key pillars. The first is unified data and insights. How much do you know about your customers? How robust are those profiles? Do you have a 360 view of all of your customers? Are you able to look at all of their data and the signals that they're sending you about their behavior? Are you managing that data responsibly, and are you using artificial intelligence and machine learning to predict what they might do next and respond accordingly? Next is content and collaboration. You can have all the data in the world, you know, and the best customer profiles, but if you're not using them to present the right visual and verbal messages to that customer, you're falling short. So how are you creating a valuable content supply chain that allows you to streamline the creation and workflows around content? How do you create modular content that allows you to respond to customers faster and in real time and have it intelligently assembled? So you don't have to find one piece for Andrew or one piece for Bruce. There are modules that already exist in your supply chain that say, "Based on Bruce's behavior, serve this up, and based on Andrew's behavior, serve that up." So it's about a supply chain that works effectively based on the data that you've created around, within your customer profiles. And then orchestrating that within, you know, the journeys. We know journeys are no longer linear. We talked about this with, you know, mobile and in-store and physical and digital. Consumers are all over the place, and you have to be able to watch what they're doing and help them know that you understand where they are in the journey based on what you're serving up. So those are the three core pillars, but underlying all of that is an organizational and operating model that's incredibly important because without the right culture and the org structure within an organization, this will fail. This is so interesting to me of just thinking about the pieces that come together, and I love the way that Adobe has laid out this framework. I guess to me, what really stands out or what makes it so interesting is just the recognition that we've entered a different time, that it hasn't always been this way. Just the recognition of the pace of change, the amount of enablers or technologies that are now accessible today, but you know, you go back years or a little over a decade ago or... The things that we're talking about now were, in some ways, unfathomable, right? Like, I mean, you know better than me, but you know, what's your thought on just sort of the adoption rate of some of these things, or are there nuances by industry that brands could think about more? Sure. You know, I mean, if you look at this, this is, you know, one sort of difference or nuance I can call out is, you know, if you compare and contrast retail versus, say, consumer goods, retailers have, you know, sort of mastered that left-hand column, unified data and insights. They've been aggregating and activating transactional data for years. There are still some pockets that need help, and as the data content changes, they need to adapt their solutions to make sure that they can pull it all in in the right way. But, retailers are now kind of moving toward the content and collaboration piece and figuring out, what do we do to develop a content supply chain that makes sense for us? And do it in a way that spans all of their channels. If you think about that from a consumer goods perspective, it's very different because consumer goods brands have relied very heavily for years on third-party data, and it wasn't until COVID hit, that, you know, the great digital migrations took place, and every consumer went to a brand's website to find out why what they wanted wasn't in stock. Why were the shelves empty? Were there alternatives to what I normally bought? Is the product safe for their families? So what was happening was consumers were now interacting directly with brands that they bought through retail, so there was no need for that relationship prior to COVID. Now, they were having it. Smart consumer goods companies started to pull all that data together, and they're trying to figure out how to use it, but they didn't have the infrastructure that retailers had. So now they're not only trying to build the data infrastructure, now they're also trying to address the content infrastructure that they need in parallel, where retailers kind of have a leg up over consumer goods brands because they had the data infrastructure in place. It's fascinating to see how that plays out and how- Yeah ... in many ways, no two industries are alike. But, as we're seeing more gray areas, or I guess it's not as black and white as it used to be, your example of consumer goods and retail that, you know, kind of playing in each other's space, but having the capabilities to do that is, is what makes it all possible. Yeah, and then consumer goods also, you know, most often they don't own the transaction, right? Right. So the data that they're collecting is very different from a purchase. It's more engagement data. So there are big differences, you know, between industries. But most interestingly is consumers don't understand the industry verticalization, nor do they care. You know, the great experience is, you know, is if, if my retailer does it, why can't my travel partner do it? Why can't my consumer the consumer goods brands I'm interacting with do it? So they're just, they just want great experiences. Bad ones are bad ones, good ones are good ones, regardless of industry. So when we talk more about capabilities and enablement, you know, maybe you can tell me a little bit more about some common terms that we hear and, you know, what exactly we mean at the end of the day when we talk about something like personalization at scale, which I see up here on this slide. Yeah, you talked about that kind of evolution or, you know, of personalization and personalization at scale. And, you know, there's a big difference between what we'll call personalization and personalization at scale. The word scale is critical here because there are a lot of brands out there that are very confident in their ability to personalize, but they're only doing it maybe in one channel. Like, we personalize all of our emails, and we're really good at it, and we... and our customers are responding. Our click-through, our open and click-through rates are great. You know, everything looks good, but if you're only doing it in one channel, you're leaving a lot on the table because, as we've talked about, the reality is consumers are engaging with you in many different ways. So if you're not figuring out how to talk to every customer on every channel in real time, which is the at-scale piece, you're missing a huge opportunity to personalize their entire experience. You're only personalizing a piece of it. So the conversations that we're having with our customers is how to get to that at-scale piece and understand that it has implications throughout the entire organization and the customer value chain. So getting to that scale part, we've spoken, you know, what you have brought up previously around these different pillars of capabilities. Are there things that are a little bit more day one or, like, the basics? Is there something about how teams are organized? Are there processes that help get these things off the ground? Yeah, it's, it's a whole other webinar. Yeah. But I think, you know, when I see customers who are doing things well, they've done a couple of things around their organization and operating model. The first is, leaders are establishing what we call a Personalization Center of Excellence. Brands that are more advanced than just leaders, the really advanced ones, they're doing the COE, but they're also doing Agile marketing squads. So there's a difference between the two. The COE has a dedicated team, which is a mix of business and IT professionals, and each one has sort of layers. There's an org structure behind each one, there's roles and responsibilities, and then there's a support system. So in a COE, you know, there's a dedicated team. It's got C-level sponsorship. It becomes a cultural change. They're defining what the personalization strategy and business cases should be within the organization, they're redesigning business processes, they're sourcing solutions, and they're driving implementation and adoption throughout the organization. Typically, you'll see subject matter experts throughout the business who dedicate time to helping drive that, that COE, process throughout the org. Agile marketing squads are very, very different. The same layers, they still want the org structure, the roles and responsibilities, and the support system, but the way that that works is you'll see brands that will develop, 10-15 pods, that are organized around what we call pools of value. Those pools of value could be based on a generational cohort within your customer base, you know, a product, an addressable stage within the customer life cycle, anything that seems to make sense for a pod to focus on, and then they're going to live solely for creating personalized experiences and initiatives for that pod. They're defining new tactics and ideas that will address that pod. They're identifying the key capabilities that are required to deliver personalized experiences for that pod. Most importantly, they're doing a lot of testing, and they're prioritizing use cases. It's a test-and-learn environment that allows them to say, "This did well. Let's continue. This didn't do well. Move on and create something else." And what happens there is each pod lives within this bigger group of a functional community, where they all interact with one another, and they share best practices and figure out what's working and what's not working. So we have customers who are doing 10 pods-15 pods. We have some that are doing 3 pods-5 pods, but, you know, those pods are really impactful. ... Very interesting, and I guess it's refreshing in some ways for me not knowing this before, but the design of the pods around these values that go beyond just product or channel, which I would've assumed would be default. But to hear you say that things are designed around a stage of the customer journey or a certain cohort of customers, I mean, it's great to hear because we are talking about personalization at the end of the day, so it's great that something- Right - is oriented around the customer. But it sounds in many ways unique to me, or it's at least just refreshing to see that it's designed in that way as far as implementing and not just focused around a more siloed approach of product or channel- Yep - alone. Let's move on and talk a little bit more around a big topic and very much related to personalization, but that would be AI. So obviously, GenAI is a very common theme, and there's a lot already at length covered around the focus on GenAI over the next year. And you know, it's certainly a very valid focus, but I think we don't want to understate the importance of AI capabilities beyond just GenAI. And I know you all at Adobe have done some interesting research hearing from CX practitioners directly about their use cases for AI. And can you share a little bit more around some things that are being pursued and the ways that benefits are intended to be measured? Yeah, I mean, at Adobe we, you know, we have Adobe Sensei, which is our AI capabilities embedded into every one of our solutions. So, you know, the use of AI for personalization and the development of great experience has been at play for quite some time within our solutions. And you could see laying out here, you know, just three of the key features. It allows you to look at new concepts, help visualize them, and explore. That's the test-and-learn capability that we, that I just talked about. It helps you develop better audiences and the journeys that come out of those audiences, figuring out, you know, where do people fit from a segment and an audience management perspective. And then from a content perspective, how do you get the right content into the right hands and measure campaign performance? And you can see some of the metrics that we look at. You know, consumers are just saving time by deploying AI and ML capabilities within their organization. So you've got 32% from content and campaign performance, 36% expected time savings when you optimize your audiences, and expected time savings of 45% when you're looking at exploring and visualizing new concepts. So, you know, the savings are quantifiable, and this is already embedded into our solutions. Now, what we have is the advent of GenAI, which is an exciting new world, and for as fast as it's come upon us, you know, we almost talk about, you know, it feels like minutes since the word GenAI were uttered, and now we have, you know, almost every major business leader that we talk to either already investing heavily in GenAI capabilities or planning it for 2024. So GenAI just gives you the generative capabilities that enhance all of the AI functions that we've already been talking about. I really agree, and I, you know, from our perspective at Medallia, it's the same around. There's so many amazing opportunities with GenAI, but this recognition of AI beyond just what is customer-facing, and there are many things that are GenAI-based that are enabling, you know, still the employee at the end of the day, but it's going to allow them to serve the customer better. The customer might not ever know it, but we're still talking about the use of this technology that's playing a role in the experience nonetheless. Yep. The one thing that I do think is interesting, though, is, like, the rollout of anything that might be game-changing at this level, there's always consideration of what the consumer response will be, and is there comfort with something that might be so new and different? So we have asked questions around what people feel for some of the things that might be needed to enable personalization at scale or these many other new ways of serving customers that we've spoken about. And you've got things along the idea of getting customer comfort around AI. There's some things around how personalization might work and the way that it might group people or stereotype them in some ways. It might exclude consumers from messaging. There might be some cumbersome processes around collecting enough information about the customer. All of these things might be necessary, or they might be mitigated in some way, but at least what we've found is that, most consumers are generally comfortable with the idea of these things, as long as they'll be served better in the process. But there is still a group that's worth paying attention to and maybe being educated more, in some ways, or at least being more considerate of their reaction, their experience. You've got maybe around a fifth to a quarter of people that do express some concern, at least at this moment in time. But at least our takeaway is that, you know, it's not such a vast number of people that we have to hit the pause button on anything that's being done to change the way that customers are served. Yeah. These numbers, while we need to pay attention to them, don't necessarily concern me very much. We know that something like 65% of consumers said that they're more than willing to do business with brands that deploy GenAI and AI capabilities in their business. Mm-hmm. You know, I think, you know, some of the rules are going to expand beyond, you know, privacy and things like that into the AI and GenAI space, but for the most part, consumers seem pretty comfortable. And when you think about today's capabilities, I can't even speak for 6 months or 12 months from now, but today's capabilities and what we're seeing manifest in business is, theoretically, most of the GenAI capabilities are going to be invisible to the end consumer, right? Because if you're using GenAI to version creative faster, to select creative faster, to create it faster and get it in front of a consumer in real time, you know, that's kind of invisible to the customer, but it creates a delightful experience for them. They're gonna see something that they may not have expected, but they don't necessarily know that it was created by a Gen AI bot or, you know, using Gen AI capabilities to get it in front of them. Where that does differ is when we talk about AI and Gen AI in the context of service. So chatbots and things like that, and the way that consumers will interact to get solutions or have questions answered or things like that, that's going to be, you know, front and center and facing the consumer, and that has to be seamless and flawless as well. So there's gonna be a mixed bag of how consumers engage and react to the use of AI and Gen AI in their business. It's an exciting time to come, that's for sure. It is. Let's talk now around another big theme, which is digital as it relates specifically to the shopper journey itself. One thing that is clearly a big takeaway around not just this past year, but it continues to be for several years past and going forward, is around the emergence and sustained growth of digital as a key part of every shopping experience, and how we've understood enough about the post-COVID world over the past couple of years to know that any of the rapid adoption that was first driven by COVID doesn't really seem to be changing. Case in point, one thing on here, when we've asked consumers to best depict their shopper journey for key retail events like this past Black Friday or Cyber Monday, a big thing that stands out is that whether we're talking about different kinds of retailers or different products that people shop for, a general theme seems to be that many, many consumers, very large proportions in some cases, don't follow a path that is entirely digital or entirely physical. It's not always often, and especially in some products, it's not often at all, that somebody would do their browsing, their purchasing, and their receipt of a product completely in store, nor completely online. We see a lot of a more omnichannel or mixed approach of browsing and research activities occurring in one channel, purchasing occurring in another, and then receipt of the product, delivery, pickup, whatever it might be, back in a first channel or a completely separate one from the first two. So across all of this, what stands out to me is this recognition that we can't manage our various channels in a siloed or isolated approach. There needs to be recognition that consumers bounce across them and have an expectation that they will get value out of the work they already did in one channel as soon as they arrive at the next one. Bruce, can you talk to me about the many, you know, the many brands that you work with and the ones that you track, are there any that stand out to you that do this especially well as far as not having a siloed approach to their channels and, and are especially considerate of how the customer is going to work in an omni-channel journey? Yes. Well, first let me thank you for supporting my, personalization at scale message, because talking about across every channel is a critical part of that at-scale component, so, you know, our themes are very consistent with one another. I'll just address that whole concept of omnichannel, before I give you an example. You know, coming out of COVID, we started to talk to consumers and understand what's driving brand loyalty. One of the top three reasons that consumers churn from a brand is because they lacked a seamless physical and digital experience, which is really kind of interesting, because if you think about when COVID hit, everybody rushed to improve their digital experiences, and that was their primary focus- Right ... and consumers had no other choice. That's how they had to interact. Now, coming out of it, consumers are craving that physical component, a physical piece of the relationship with the brand, and if they're not getting it, they're walking away. One brand that we're working very closely with to achieve that is a major home improvement retailer. And, some examples of how they're blending physical and digital and creating a really robust, and what we refer to as a gold standard omnichannel experience, is, consumers can input their shopping list into their mobile app. That's like the first activity. Once they're in the store, the app directs them in that physical location to the right aisle, the right bin number, exactly where they can find the right faucet, the sledgehammer, the adhesive that they're looking for. From the same screen, the consumers can see product reviews, they can see how-to videos, they can get product details. There's a whole host of information that brings physical and digital together in a really exciting way. They also are incorporating mobile into buy online, pickup in store. So they have a really robust locker capability for what if you buy online, they'll put it in a locker for you, so you really never have to interact with anybody in the store. But you can use your mobile to scan a QR code once you get there, so they're tying, you know, those two experiences together as well. So they're really doing some really cool things. Now, using mobile to get in and out of the locker and then shutting it and walking out sort of flies in the face of the opportunity to cross-sell, upsell them and draw them further into the store, but, you know, there's a large majority of customers who do that anyway, so- Right. They're doing, really doing a great job, and as I said, we hold them up as a gold standard. Well, one thing that I think is interesting, too, is, that example you gave, I think, speaks so well to the shopper journey in terms of the, identification of the products you want, purchasing them, actually receiving them, and, and so on and so forth, but there is a lot of consideration around the omnichannel journey when it comes to service. So maybe it's not at the point of purchasing a new product, but it might be needing assistance, it might be some other issue. There's a myriad of different options that are listed here. But what we do see, too, is that consumers really have varying preferences based on the type of service need as far as what channel they want to go to, and, you know, we've got the traditional in-person route. There's obviously a multitude of ways to interact digitally, but then we also have considerations for the phone. You know, there's social media playing a role now, too... I mean, to me at least, it seems calling out especially important, more now than ever, that this this footprint that you have digitally needs to transcend not just for the purchase path, but it's also for post-purchase and, and any of the service needs that emerge, too. Definitely. I agree. So we spoke a bit around channels and the importance of digital. Let's drill down even deeper, though, and within digital, let's talk about a very key theme for this year around the consideration of mobile apps, in particular, within digital. So in some research we've done, we have seen that apps have grown tremendously to become one of the primary, if not the primary, way that a consumer interacts with a brand, and in most recent interactions that we've surveyed consumers on, now outpaces interactions digitally in the form of something like a website, either from a phone or from a desktop, tablets, obviously, and then, anything else listed. As far as digital actions are concerned, consumers are making the investment in an app. They're downloading apps. They're getting things out of it that they otherwise wouldn't with a brand, and we're seeing that play here. But we also are seeing, once again, that it's not just the app, it's the app playing a role in the consumer interaction beyond just being the point where consumers browse, purchase, and receive a product all at once. It's often alongside an in-person step or a step on a website, too. So with all that together, we've noticed that a lot of brands have done major investments in adding app functionality, and in particular, enhancing their In-Store Mode features. When we talk a lot about retailers or other types of businesses that are going to have that digital and physical mix, In-Store Mode is offering a lot of particular functions. You gave an example already, but I'd love to hear in a second another example from you. One thing we have noticed nonetheless, though, is that there is some awareness or considerations around generation and getting more on board with this idea of using mobile apps more often. But for those that have used In-Store Mode, we do generally see that there's large levels of satisfaction, and while consumers want to see even more out of In-Store Mode, they generally do seem to be finding value today. So with all that around this, this wave and this increased investment in mobile app, are there any brands, Bruce, that you work with that stand out to you with their particular In-Store Mode features and the types of things they do that just wouldn't be possible through a browser-based experience alone? Yeah. I mean, look, you know, mobile is certainly growing in, you know, the applications in the customer journey. Interesting, you know, interesting stat, mobile surpassed desktop this holiday season for online sales. It hit 51%. So, you know, the growth is absolutely enormous. But to your point, it's about so much more than the transaction. It's about, you know, it's about product exploration, it's about price searching, it's about user reviews, all of the things that people can do on the mobile. And the beauty of it is, they're in the store, they're walking around with it in their hand. So it makes life... it makes the information so much more accessible because they just stop in the aisle and pull up what they need. I think a great example of a retailer who recognized the value of mobile in the context of their overall customer journey is a very large beauty retailer that we do business with. They got on the bandwagon pretty quickly in COVID because they realized that beauty, being a very tactile industry, where consumers, you know, wanted to touch, feel, and see the product, they had to find ways to create experiences for customers that mirrored that. So they quickly deployed methods to engage customers digitally and create experiences that, while they might not be as tactile, they mirrored them as closely as possible. And then, as consumers started to migrate back to the stores, they're using beacons to... that tie into their app, that pull customers in based on their proximity to the door. Once they're in, the app, you know, goes right into Store Companion Mode, and it pulls up all of your activity, both physical and digital, into your profile, and it gives you promotional messages based on your propensity to buy things like limited edition products or new releases. It'll, it'll offer up replenishment messages about things that, you know, things you've already bought that are due for replenishment. It offers you opportunities for beauty advisors to, to come online and help you pick out the products that you may need or can reference prior beauty advisor interactions that pull up, "Here's what your beauty advisor used on you in your last visit." You know, "We have some new offerings, new colors," things like that. But everything is tied to this really robust customer profile from that incorporates data from every point of interaction and serves it up at mobile into the store. So the customer is not wanting for anything that they've done before, and as a result, this brand is seeing loyalty numbers going through the roof because of the way that they're incorporating mobile into their stores and the amount of transactions that customers are initiating and completing using their mobile devices. That's such a cool example to me for a couple reasons. I think, one, you know, beauty and cosmetics as, as a category, to your point around it being a tactile nature inherently by the type of the product, I feel like a lot of brands could have been content with saying, "We're not gonna be digital first, necessarily," or, "We need to kind of wait and see." But to take the lead to develop things that are... I feel like using the strengths that beauty might have as a category due to the repeat nature of purchasing and also the advisory or consultation that could happen in store- Yep. The fact that all that's unified in that way, but you need the app as that central point, or else it's going to be too much for a customer to realize is actually taking shape at once, right? Without it, without it being sort of pushed in that way to them, I feel like while in store, their eyes are instead going to go with what's on the shelf or something else, and leave it at that. But to keep them engaged and add value at every step of that, is, to me, I guess, something I wouldn't have expected out of a retail category like that, but it is so fascinating to hear an example like that. Yeah, well, they're doing a great job of addressing the newness factor. Like you said, your eye is distracted to the bright, shiny thing when you walk in the store. So they're, but they're tying newness back to replenishment. They'll buy certain things regularly, and they need replenishment 'cause they only have a life cycle, and then the newness that comes along with that, and they're doing a really great balancing act. So one last theme for today is going to be around younger buyers, and a lot of the considerations that we have around this are going to be in the form of talking about social and the role that we expect it to play in 2024. We've asked consumers to talk more to us about, over the past year, certain activities they've had and how they've originated from a media perspective. What we found is that, if it wasn't already well known before, hopefully this is another reinforcing point of showing just how powerful social media has become in product discovery and decision-making. We've found that in over 2 in 5 consumers, social media has played a bigger role over the past year in how they find out about products and brands. We've also seen sizable percents of consumers say that they've, in the past year, found out about a new product or a brand by seeing content on social media platforms like Facebook, TikTok, and Instagram. I do have a couple notes on here about AI, just as a callback to what we talked about before, but there are some people who are now exploring the use of ChatGPT for product ideas and what to purchase. But outside of that, to focus on social for a minute, it is fascinating to me to just see the prevalence of not only these social media platforms but also just where TikTok stands by comparison to Facebook and Instagram across the population as a whole. If we drill down into this further, there really is a big consideration about the generational perspective and reaching Gen Z. If you look at the differences that we can see here on where people say they spend their time, as far as different types of entertainment and content consumption, just really the drift between legacy media in the form of live TV versus these various other platforms that are so much stronger with younger generations, likely at the expense of live TV or radio or other older forms. But when you look at things like user-generated content, especially short-form video, look at the proportion of Gen Zers that say they spend 15+ hours a week on this. User-posted videos on social media, video games, and if they are consuming other types of content, like shows or movies, the extent to which it's on streaming services versus live TV, too. So obviously, implications at play here in the form of where to advertise, reaching Gen Z. It is interesting to think, too, that Gen Zers have basically doubled over the past four years as far as the proportion of them that have exceeded the college age and are out in the working world now and are basically controlling the purchasing decisions for their household in more and more cases. If you look also to just, in particular, product discovery around key holiday events, we can see that Gen Zers say TikTok, in particular, is a bigger product discovery tool for them than things like print, newspaper, or TV. So a lot at stake here as far as reaching Gen Z, and a lot of it centering around social media. It obviously introduces a lot of considerations around how to do it well, though. Bruce, can you talk to me a little bit around media strategy and just what brands should be thinking about, from your perspective, as they try and reach Gen Z through these forums? Well, you know, look, Gen Z obviously is, you know, holding a lot of value for retailers and for brands because they're the up-and-coming generation, and you're right to call out TikTok. In fact, our holiday report, you know, showed that TikTok won the day. They saw increases in commerce, where some of the other big players saw decreases, so TikTok is definitely doing some things right. You know, overall, Gen Zers, their value and their values, the things that they're looking for, 95% of Gen Zers are saying they want great digital experiences. So we talked about that balancing between physical and digital. Gen Zers are a little bit outside the norm there. They wanna see the digital component highlighted in a much bigger way. It's not to say physical and digital are not important, but digital is certainly rising to the top there. And, you know, look, you see these, there are a lot of these sites that have all introduced buy buttons that let shoppers make purchases without ever having to leave the platform, and a lot of retailers have introduced one-click checkout to their site. So, you know, this allows shoppers to enter their payment information once, and then they can use a one-click button to make purchases without having to re-enter it. I think, you know, the value there is creating that seamless experience that the Gen Z consumer expects. They want the experience to be quick, easy, convenient, and seamless, but they want it to tie back to all of their other interactions with the brand. You know, the challenge here is going to be from a content perspective. You know, you've got these consumers who are creating their own content, so that's out of the control, often, of the brand, so how that plays in the overall mix. And then the other thing is, how do you pull that data into your overall data and insights capability so that you have the most robust profile possible and understand, "Okay, here's a TikTok buyer. Here's how they're interacting. Here's what we have, here's what we don't have, here's what we don't have, and how do we go further to get what we need? Well, those considerations definitely stand out to me, too, as far as what you mentioned for getting the data and, obviously, attribution and recognition of what's working from a marketing perspective presents new challenges, or at least there just isn't as much history to fully understand the impact of these channels. So I can see that as a concern for many brands, but I really like a couple of the things that you said around ways that I think maybe that can be alleviated some, or at least gives more of a fighting chance with integrating more into the experience for a faster purchase process. Things like these buy now buttons, one-click payments, you know, syncing with other sources where payment information's already saved. I would hope at least that that's driving more of the purchases that occur, that originate from these channels, to actually happen on the spot or in a more, verifiable and trackable way, as opposed to just the hope that an influencer mentioning a product is gonna lead somebody to decide they wanna buy that product a week later, and it's very hard to track it. But, Right ... you know, I feel like I learned a bit from hearing from you at least of, of some ways that these are being mitigated or what, what the latest approaches are on this area. Mm-hmm. Yeah, we're seeing a lot of where the social component of marketing strategy is living in a little bit of a different world in these organizations because of, you know, it's the speed with which this needs to happen, and there are so many nuances from a marketing strategy perspective that differ from a more traditional strategy. So, it's interesting because, you know, our holiday data showed some pretty big names that saw declines, and TikTok had the increase. It's interesting to me to consider how fast things move, you know? We, you know— Yeah ... what gets, I hate to use the word, but what gets canceled and what doesn't in the minds of you know, this generational cohort. It's gonna be interesting to see how things play out in the near term and the long term. Well, that concludes our content for today, but I gotta say, I'm excited now even more than before about what 2024 is gonna have in store for us based on the many emerging trends that we've seen over the past year and what looks to be the case going forward. So Bruce, I can't thank you enough for partnering together on this and, you know, revealing some of our latest thinking from both Medallia and Adobe together. Thanks, Andrew. Yeah, it's been a pleasure. I think 2024 is going to be a very exciting year. A lot of the turmoil that's existed in a few years prior has started to settle down, and people are starting to take note of what they need to do to capture consumers' hearts and minds, and it's gonna be interesting to see who does it right and who lags behind. Well, for those of you listening, we thank you very much, and hope to see you again next time. Have a great rest of your week.