Combine digital experience with physical experience and you get "phygital" — it’s the new normal. And while the pandemic may be over, consumer shopping behaviors have been forever changed.

Rich Hein, editor in chief of CMSWire, shared these thoughts in CMSWire's DX Summit virtual conference last week. Hein served as emcee of the two-day event, highlighted by CMSWire’s release of its Annual State of Digital Customer Experience Report for 2023.

In the report, the majority of respondents — nearly 80% — agreed that digital customer experience is a top priority. Among the report’s other key takeaways, organizations with effective tools are using more advanced solutions and are six times more likely to have a Digital Experience Platform (DXP) in place than organizations who say their toolset needs work. In addition, 61% of organizations say DCX has gotten “significantly” or “slightly” better since the pandemic, and an increasing number of practitioners are also acknowledging significant changes to their CX strategy, team and budget.

Further, belief in the power of AI to be transformative or significant fell by 11%, while less than 1 in 12 organizations are regularly using AI to improve their DCX strategy. And as far as the metaverse, 42% are not paying any attention, with 39% keeping an eye on developments and just 7% developing a strategy.

CMSWire’s autumn conference was one of four offered this year. All are available on demand. CMSWire debuted the DX Summit in Chicago in 2015 and has held them every year, switching to virtual in 2020 due to the COVID-19 pandemic. The company goes back to in-person next May in Austin, Texas, at its newly-branded CMSWire Connect.

Here are some more takeaways from the August 2022 virtual DX Summit:

Extending the Possibilities of CX in Augmented Reality

Augmented Reality (AR), Virtual Reality (VR) and the metaverse are not about supplanting the human imagination or leaving the physical world behind — instead they’re about extending our human capacities and amplifying knowledge, connection and creativity.

That was the message from Dr. Helen Papagiannis, a member of the invitation-only World Economic Forum's Global Future Council on AR and VR and author of "Augmented Human." She delivered the opening keynote.

While AR was something intriguing brands were exploring pre-2020, Papagiannis (in featured image for this article) said the global pandemic thrust it front and center — making it an essential technology across multiple industries, from virtual try-ons and immersive 3D catalogs to AR chatbots and real-time remote support.

“During the pandemic many retailers had to close their physical doors but were still able to engage with customers in online shopping experiences through the power of AR,” she said. “The pandemic accelerated all things virtual and augmented reality showed how it really solved a pain point with try-on experiences.”

Further, she highlighted the future possibilities of blending the physical and digital customer experience through digital content that supplements our experience through the use of AR/VR mixed reality, AI and the metaverse.

“Let's be clear: the metaverse doesn't exist yet," Papagiannis said. "However, there is enormous potential and possibility, and we can think of the metaverse as an embodied intranet and an extension of the Internet as we know it today as a series of interconnected, immersive virtual worlds and experiences. When designing and developing augmented reality experiences, it's really key that we ask — what does augmented reality do well? And I believe that there are three things — they are visualization, annotation and storytelling.”

Some examples of visualization she shared included:

  • Microsoft HoloLens, for image-guided medical procedures
  • Magic Leap, used by people with autism to practice and prepare for job interviews
  • Google Glass Enterprise Edition, used by manufacturers to help with the assembly process
  • Epson Moverio, used in the entertainment industry and live theatre
  • Snapchat Spectacles, used by creators to develop and design new types of experiences for storytelling

In addition, she reviewed try-and-buy tech that allows consumers to try and preview virtual furniture, products and even enables shoppers to try on virtual clothes, makeup and more, in the privacy of their own home.

As for annotation, Papagiannis described it as “a step beyond visualization now providing notes and step-by-step instructions used to help guide you in performing a task or even offering further knowledge about a subject.”

For example, GE is using smart glasses to assist its technicians in assembling wind turbines, resulting in a 34% increase in productivity as opposed to using paper manuals. And Mercedes Benz is using the technology of "remote assist" with augmented reality across all their dealerships in North America. So rather than having an expert fly in from Germany or somewhere else in the world, they can connect with a person live who is able to get that customer's vehicle back on the road quickly and safely.

“And so, you can imagine how this can be applied to customers as well for maintenance and repair from complex machinery all the way to everyday appliances and products,” Papagiannis said. 

Finally, as a new communications medium, she said that AR is completely changing the way that we tell and share stories. She shared detailed examples from brands like Louis Vuitton Burberry, Snapchat and Jack Daniels.

“You can imagine wearing a pair of augmented reality glasses and engaging with different brands and different brand packaging and having everyday objects come to life with AR storytelling," Papagiannis said. “This idea of transforming an everyday object into something magical and living that can be conditioned and continually updated is very compelling.”

Related Article: 6 Takeaways From CMSWire’s DX Summit 2022 Summer Edition

Multi-Dimensional Experiences Changing the Branding Landscape

CMSWire Managing Editor Dom Nicastro led a talk on on the blending of physical and digital experiences underway in the “Phygital” world. Adam Cotgreave, chief customer and sustainability officer at Seasalt, and Marcus Wasdin, general manager at Par Data Central, joined in the discussion.

Between online, in-store and cross-channel shoppers, the latter is considered most valuable according Cotgreave. But they’re not the most profitable. Cotgreave estimates between 26-28% of their online purchases are returned as opposed to just 6-8% average in-store — where shoppers can try something on, feel the fabric and see how it drapes. Whereas online shoppers often buy two to three items to account for sizing issues and know at the time of purchase they’re only keeping one — making in-store shoppers their true profit center.

Pre-pandemic, 60% of Seasalt’s business revenue flowed directly from their brick-and-mortar stores, so the COVID-19 closures presented a real conundrum when Seasalt was forced to shutter its retail outlets for nine months and become a digital-only business.

“The big challenge for us was to try and influence behaviors, particularly for the customers whose preference was the physical store, to move to online,” he said. “The big thing was to just get back to what the brand meant — the brand's values — so things like loyalty, integrity, quality, value, honesty, all those really honest values that most customers can relate to. We did that instead of slashing prices and putting out promotions and offers because all you're really going to do then is damage your bottom line.”

Cotgreave said they found that when fans of the brand received targeted messaging that reminded them of the brand they loved, they took the chance to jump online. Post-COVID, Seasalt has flipped the percentages and now boasts 60% digital business, versus 40% physical retail. But Cotgreave said the key was not just accepting these stats as the "new normal" but to continue to learn and grow from them. Since that time, they’ve introduced a new virtual appointment program and other personalized digital experiences. In 2023 Seasalt plans to introduce a new widget that allows consumers to connect via video to a store representative.

“We're hoping that's going to bridge a little bit of the gap between digital and retail," Cotgreave said. "So, the service person on the end of the video can actually show how a fabric drapes, they can do a close-up on a textured fabric, or talk while they're holding it, which should give the consumer much more confidence to buy that one item instead of the three items to return, which in turn should reduce our return. With phygital experiences, I don't think anyone's nailed it…you can't go and get it out the box just yet. But I think lots of people like us are starting to experiment with what that future is going to look like.”

Empowering Employee Experience for Customer Experience

Wasdin said that while building customized immersive experiences using AR/VR for consumers, don’t overlook the digital experience for workers behind the scenes. In the restaurant world, customers want their food to be hot and ready when they arrive: they don’t want to wait, and they don’t want mistakes. And without efficient, productive workers, CX suffers.

Creating a digital experience for team members that provides drive-thru capabilities with cameras and introducing AI that enables the team to know when customers arrive, where they are, etc. helps everyone. 

“We focus a lot on gamifying or creating visual experiences for the end-consumer. But you know, there's also work to be done to create those original experiences for the team members that actually serve those consumers,” Wasdin said. “That's a lot of the focus area that we have, as well trying to bring that unified experience together across all of our tech stack and eliminate those pain points.”

Related Article: 6 Takeaways From CMSWire's DX Summit 2022 Spring Edition

Developing a Brand-Specific Chatbot Strategy

Michelle Hawley, senior editor at CMSWire, led a discussion on the steps to building an effective chatbot strategy with guests Erik Newton, VP of marketing at Milestone, and Phillip Moad, product manager at Westjet.

Leading off, Newton said for any marketing program to be successful it must incorporate “empathetic” marketing.

Learning Opportunities

“People don't really care how much you know, or what you have to talk about until they understand how much you care, and in a business sense how much you understand their use case, or the problem that they're trying to solve,” Newton said. “And some of the realities that we're going to be dealing with on the websites in the current era is that 81% of buyers do not want to fill out a form.”

Further he added that 72% of buyers would like to stay anonymous, but they'd also like to receive personalized service and content from the website. And 89% of people now prefer chat to establish contact with a company, particularly millennials and Gen Z.

His first step for creating an effective system is to collect the information that feeds the knowledge base, the bots and the humans that are going to be serving people on the website. He advised checking questions and comments on Google business and looking through internal logs and support tickets to find out what people are looking for.

“Another thing that's really obvious but often overlooked, is that you can talk to your SDRs because they're on the phone all day,” Newton said. “Hopefully they're connecting a couple times an hour with the audience, and they know who the audience is and what they are interested in.”

He discussed the fact that understanding your customer is the key to creating an effective chatbot — and that comes from collecting the right information, isolating and categorizing their problems, coming up with the best answers, and being ready with those answers in the content. Whether it’s a salesperson or a chatbot, having really good training and being attentive, responsive and proactive is crucial.

Moad addressed some of the challenges faced by brands when creating their strategy.

“I think a lot of businesses get caught up on the natural language understanding or the AI side of things, and I think it's really important to find the right partner that’s going to meet your needs,” he said. “But a lot of the vendors and a lot of the self-serve platforms are really going to be able to solve that natural language portion of a successful chatbot, and I think companies need to look at not only what they are trying to achieve when they launch their blog, but what are they going to be trying to achieve within their contact centers three to five years out.”

He also advised determining what the integration points are and what the customer profile platform is that your business either has — or needs to invest in — to make sure that you're going to have the right level of automation.

Among his other tips:

  • Align for the Future: Make sure you have the right alignment for future integration beyond the natural language portion or run the risk of ending up with just an advanced website search tool.
  • People Plan: Beyond planning for the human agents that are going to offer support when the bot either can't handle a question or there's a process that the bot isn't integrated in, also plan for the people that are going to support the bot on a day-to-day basis. Will you have an analytics team that can support you or are you going to rely on a partner?
  • Bringing the Brand to Life: Do you have UX writers who can really bring your brand to life within your chat platform? And do you have the technical subject matter experts to help a partner, or a self-serve platform along the way, to integrate with your CRM or the services that are going to complete the tasks on behalf of your guests?

The issue of transparency and trust was also discussed and Moad addressed some of the ways companies can tackle transparency in the AI learning process and chatbot applications.

Customers are often faced with a lot of unknowns when it comes to what information is being collected and what is done with it and he believes the best method is the honest and open approach — with companies offering a clear explanation of what is being done with the information collected.

“I think that guests are open to us utilizing some of their information or some of their conversation data to help make experiences better,” Moad said. “And I think that we're in this interesting time right now where people understand that AI isn't perfect yet and it's going to take some time to get there but I think a lot of people are willing to try it out as a first step.”

Related Article: Why People Are Reluctant About Chatbots and What You Can Do About It

AI and Behavioral Economics

In today’s world, companies must traverse numerous channels and interactions across mobile apps, websites, social media platforms and brick and mortar stores. Evolving consumer demands, disruption and proliferating channels highlight the need for organizations to create flexible and future-proof customer CX.

John List, award-winning economist, professor and chief economist for Walmart, led a discussion on AI and behavior economics, drawing from his own research as author of "The Voltage Effect" to reveal specific principles that predict whether an idea can achieve high voltage and succeed at scale — and how to embrace the use of Machine Learning (ML).

According to List, there are three major economic ways to use machine learning:

  • To identify how much “voltage” an idea has
  • To serve as an "architectural nudge"
  • To reveal how to personalize products and services for the “right” customers

And when it comes to scaling, List offered two “laws.”

The first he described as the “Voltage Effect” which is that benefit/cost efficacy changes when you move from the small to the big — and it’s the scaling up that enables ideas to move to many people and locations. The second law he shared is that scaling is an “Anna Karenina” problem — meaning that a fault in any one of a number of factors leads to failure and a success is found in a solution in which every possible deficiency has been avoided.

“Some people think about scaling as a best shot problem,” List said. “You know if the idea has just one really good element like a Lebron James or a Michael Jordan, that’s not how scaling ideas should be thought of.”

2022 CX Leader of the Year and IMPACT Award Nominees

On the last day of the DX Summit, CMSWire announced the 2022 Customer Experience Leader of the Year and IMPACT award honorees.

The Customer Experience Leader of the Year was awarded to Ashly Beverage, head of customer experience at Verisk. The finalists who received honorable mentions include David Mingle, vice president and global practice head, customer experience at Reputation and Adam Cotgreave, chief customer and sustainability officer at Seasalt.

New to this year’s program are awards that recognize departments or teams rather than just individual achievements. These awards include Customer Journey Innovation, Customer Service Excellence and CX Stack Impact. The 2022 honorees include, Rocket Software for Customer Journey Innovation, Milestone Inc. for Customer Service Excellence, and Westjet for CX Stack Impact.