Navigating the DXP Revolution: A Guide to Next-Gen Customer Engagement

The Gist

Market growth. The DXP market was valued at $12 billion in 2022 and is expected to reach $27 billion by 2028.
Personalization power. Modern DXPs use AI to curate personalized content, enhancing customer engagement.
Flexibility vs. all-in-one. cDXPs offer modular capabilities and easy integration, while traditional DXPs offer an all-in-one suite from a single vendor.

The customer journey now flows across many devices, channels, and touchpoints. The legacy CMS solutions that once dominated the market have been proven to be too siloed and static. Next-generation Digital Experience Platforms (DXPs) and composable DXPs (cDXPs) now promise omnichannel customer engagement powered by integrations, analytics and modular architecture. These solutions unite content, commerce, and data for responsive, personalized experiences across the customer journey. This article will examine next-generation DXPs and cDXPs, the opportunities they provide, and the challenges they pose for brands looking to improve omnichannel customer engagement.

Why the Need for a DXP?

Digital businesses today have learned that in order to be successful, they must be customer-centric. As such, providing customers with an exceptional, consistent, omnichannel experience must be a priority. As far back as 2014, a BusinessWire survey revealed that 90% of consumers said they expect the customer experience to be consistent across channels and devices. Since that time, more channels have become available to customers, and their expectations have continued to rise. No longer will customers accept it when a brand’s channels are not in line with one another.

Alyssa Trenkamp, VP of marketing communications at Uberall, a hybrid customer experience platform, told CMSWire that the most successful businesses and brands are constantly updating their strategies, services and solutions to meet and even exceed the expectations of the modern-day consumer. "And the reason is clear, when expectations aren’t met, 49% of consumers say they will turn to a competitor, according to a recent consumer survey from Uberall."

If a customer moves from a brand’s mobile app to its website, they expect to see the products they have selected appear in the website’s shopping cart. Conversely, if they have been shopping on the brand’s website and move to the brand’s mobile app, they expect the items they have added to the shopping cart on the website to show up in the mobile app’s cart as well. If they see a product online selling for $5.99 and they go to the brand’s brick-and-mortar store, they expect the product to be on sale at the same price.

Similarly, if a customer has been chatting to a customer service bot on a brand’s website, and they call the customer service number, they expect to be able to take off where they left off online–the service agent should know what they were chatting about (i.e. when can they expect to receive a product they ordered, why was a lid not included, the item was broken and they need a replacement, etc.).

Additionally, customers expect a brand to recognize and understand them as an individual with unique needs and desires. They expect the brand to present them with personalized offers for products they are likely to want to purchase, or items that may go along with products they have previously purchased from a brand. A survey from Accenture indicated that 91% of respondents said that they are more likely to do business with brands that remember, recognize, and provide them with relevant recommendations and offers. In order to accomplish these things, a brand often turns to a DXP.

For customer-centric brands, a DXP is essential to unifying engagement across all of a brand’s channels. As such, the DXP market is growing substantially. According to a recent report by Benzinga, the global DXP market size was valued at $12 billion USD in 2022 and is predicted to reach $27 billion USD by 2028.

The Features of Next-Generation DXPs

Gartner defines a DXP as an “integrated set of core technologies that support the composition, management, delivery, and optimization of contextualized digital experiences.” The DXM is essentially today’s version of the ubiquitous Content Management System (CMS), although, through the evolution of the platform, many new capabilities were introduced. Where a traditional CMS formatted content for a brand’s website, today's DXP is an all-in-one suite of software that manages and formats content created for the brand's website as well as content for the brand's social media presence, voice, chat, mobile apps, email, and other channels.

There are two types of DXPs: monolithic and composable, and although they have many of the same features, a monolithic DXP is an all-in-one platform from a single vendor, while a composable DXP is a selection of software from different vendors that work together through the use of APIs, SDKs, and microservices. The 2022 CMSWire DXP Market Guide lists the following core features of a DXM:

APIs for administration, authoring, interoperability, decisioning, and delivery.
Content authoring, workflow, and collaboration.
Content and experience analytics.
Content indexing, metadata, and search.
Content modeling and extensible content types.
Content presentation and delivery.
Content security and access control.
Content versioning and change management.
Customer experience (CX) personalization.
Digital asset management (DAM) and/or integration.
Ecommerce or ecommerce integration.
Experience design (low code site or page design).
Experience personalization.
Experience testing and optimization.
Experience/site versioning and change management.
Forms design, integration, and delivery.
Image management and editing.
Multi-lingual support and/or localization integration.
Multi-site, multi-channel, multi-device support.
CRM and digital marketing automation integration.
Platform account and access services.
Platform/back office extensibility.
Social media integration.

Because traditional DXPs are all-in-one suites that only rely upon one vendor (such as Adobe, Salesforce, SAP, or Oracle), service and support are more easily obtained. Brands that use cDXPs may have several vendors to work with, which may increase maintenance costs, upgrade issues, and compatibility challenges.

What Do Next Generation DXPs Bring to the Table?

Next-generation DXPs are unique in that they are designed to be a unified platform that brings together content management systems (CMS), marketing automation tools, customer relationship management (CRM) systems, and analytics tools.

In 2021, a McKinsey report on personalization revealed that 76% of respondents said that receiving personalized communications was a key factor in their consideration of a brand. Today’s DXPs are incorporating AI-driven functionality that enables them to automatically tag and sort content, which saves considerable time and effort. These tags help in curating personalized content that is used to enhance customer engagement. Adobe Experience Manager, for instance, uses Adobe Sensei, their AI and machine learning platform, to achieve this level of automation and personalization.

AI is also used in DXPs to predict customer behavior based on historical data. Solutions such as the Sitecore Experience Platform use machine learning to not just track but predict this behavior, enabling marketers to preemptively address customer needs.

The Key Benefits of DXPs

A DXP provides a centralized way for brands to manage customer experiences across all touchpoints, channels, and devices, leading to more consistent, optimized, and personalized experiences that drive customer engagement. DXPs make it easier to quickly test and iterate on content, designs, and experiences. Additionally, brands are able to respond more quickly to customer feedback and market changes.

By consolidating core experience functionality onto a single platform, costs are lowered compared to the "best-of-breed" approach that composable Digital Experience Platforms (cDXPs) use, and maintenance and integration overhead is reduced. With reusable components, templates, integrated workflows, and easy content authoring, a DXP enables brands to launch new products, campaigns, and sites to market significantly faster.

With a single source of truth for content, assets, and data, siloes are broken down, and it's easier for cross-functional teams to work together and deliver exceptional experiences. Traditional DXPs have specific benefits over cDXPs, including:

All-in-one integrated suite from a single vendor - It can be easier to implement, maintain, and support a unified platform.
More out-of-the-box capabilities - Traditional DXPs come with many built-in features and functions that can accelerate implementation.
Potentially lower upfront costs - An integrated suite can often have a lower initial price tag than assembling multiple cDXP modules.

What About Composable DXPs?

Many brands are moving to cDXPs due to the ability to pick and choose only the features they need and leave out all the rest. A cDXP is comprised of a group of “best-of-breed” modules that function seamlessly together by using APIs, SDKs, and microservices through a headless approach. cDXPs leverage cloud infrastructure and APIs to deliver highly modular, extensible, and integrated capabilities. A composable DXP works particularly well with a cloud and microservices-based formula. Because of their scalability, brands often find it easier to integrate composable DXPs with their existing martech stack.

Ana Mourao, digital engagement at Stanley Black and Decker, a tool and innovative solution provider, told CMSWire that because cDXPs allow for more flexibility, her team was able to set up a martech stack that did not depend on large, expensive agencies for execution (which also made them more resilient for moments when budgets are cut across the organization). "It also allows for more control on how we capture our end-user data, we can have different sources of data that are easily plugged in (or out) of our martech stack."

cDXPs also have specific benefits over those of traditional DXPs, including:

More flexibility - Composable architectures allow brands to swap out components and scale specific capabilities as needed.
Avoiding vendor lock-in - Mixing best-of-breed components from different vendors prevents over-reliance on one tech provider.
Integration with existing stacks - cDXPs can more cleanly integrate with other marketing/martech tools.
Only pay for what is needed - The modular approach of cDXPs allows brands to add and expand features incrementally.
Future-proof - It's easier to adopt new innovations and technologies as they emerge when the DXP is designed for composability.

Justin Thomas, founder and lead consultant at JourneyEngine, an EdTech marketing agency, told CMSWire that composable DXPs have several advantages over monolithic DXPs. Because it is built around a microservices-based architecture, Thomas said that its scalability and flexibility enable its integration into an existing martech stack a much simpler process than with monolithic DXPs.

The Challenges of DXP Implementation

Implementing a digital experience platform can deliver immense benefits, but also poses some unique challenges that brands must be aware of. Chief among these is integrating the DXP with existing backend systems and legacy platforms. Migrating data and workflows to the new centralized platform requires upfront investments of time and resources. Brands also face the challenge of developing the in-house skills and expertise to fully leverage the platform's capabilities.

DXPs introduce new ways of managing content, analytics, and personalization that may require adopting modern software practices like agile and DevOps. Additionally, measuring ROI and quantifying the business impact of a DXP remains a hurdle for many businesses. Change management is critical, as a successful DXP requires teams to collaborate in new ways and break down silos.

When it comes to the challenges of cDXPs, Mourao said that they require more organization on their end (a SBD or another company deploying and managing the cDXP). “A martech stack is only truly composable if the data it collects, processes, and uses for activation is well organized and is, itself, portable/composable,” said Mourao. “In our case (SBD) we developed an end-user data model which has become our martech stack language – we can only collect and process data that is formatted according to the model, otherwise the info cannot be ingested, digested, and properly counted. This was a major change in paradigm for us!”

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Mourao said that marketers need to share the responsibility of quality data acquisition. “If our governance process were not in place, the martech stack would not be truly composable. This is our challenge, as well as the main ingredient of our success.”

Thomas said even after considering the challenges posed by cDXPs, the benefits outweigh the risks. According to Thomas, a cDXP’s unparalleled scalability and flexibility along with the ability to design it for specific business needs have contributed to its increased popularity.

Final Thoughts on DXPs and cDXPs

Next-generation DXPs and cDXPs provide powerful new capabilities to unify and optimize omnichannel customer engagement. While implementing any DXP comes with challenges, the benefits of consistent, personalized experiences and increased agility are immense. Brands must weigh the all-in-one simplicity of modern DXPs vs the flexibility of composable DXPs to find the right fit. Leveraging these platforms is essential for brands to deliver seamless experiences tailored to each moment in the customer journey.