Customer Experience Management Market Size, Share, and COVID-19 Impact Analysis, By Component (Solution and Services), By Deployment (On-Premises and Cloud), By Enterprise Size (Large Enterprises and SMEs), By Touchpoint (Call Center, Website, Mobile Applications, Email, Social Media, and Others), By End-user (BFSI, Retail and Consumer Goods, IT and Telecom, Healthcare, Automotive, Media and Entertainment, Government, and Others), and Regional Forecast 2023 – 2030

The global customer experience management market size was valued at USD 14.95 billion in 2022 and is projected to grow from USD 16.91 billion in 2023 to USD 52.54 billion by 2030, exhibiting a CAGR of 16.6% during the forecast period.

The report includes the solutions and services offered by companies, such as Oracle’s advertising and customer experience (CX), OpenText Corporation’s customer management solution, Sprinkler’s Unified Customer Experience Management (CEM) platform, and Verint Systems’ consumer experience software, among others. The rising adoption of Artificial Intelligence and Augmented Reality to develop consumer experience solutions will fuel the market growth in the upcoming years. These solutions enable enterprises to reduce customer churn rates and improve customer loyalty and strengthen their brand presence. Organizations are focusing on increasing their funding to cater to the growing demand for customer experience management solutions and accelerate the market’s growth.

• May 2021 – Airkit announced that it received USD 40 million in funding during the series B investment round. The company aimed to invest these funds in future-proof customer experience (CX) solutions.

Such activities are likely to propel the demand for CEM solutions during the forecast period.

COVID-19 IMPACT

Changing Consumer Behavior Boosted Demand for Innovative CEM Solutions During Pandemic

The impact of COVID-19 pandemic on this market was minimal due to the rising trend of online shopping. During this period, consumers’ shopping preferences and patterns changed drastically. Customers were more inclined toward digital channels than traditional shopping. Organizations were focusing on customer engagement, retention, and loyalty. The companies that adopted virtual assistants or bots to cater to customers’ changing expectations during this period are expected to create new market opportunities for CEM solution providers. The global market witnessed slight decline in 2020 as compared to 2019, owing to lower demand across developing nations for CEM solutions. However, increase in the online shopping trend and rising focus of consumers on adopting digital platforms have stabilized the demand for customer experience management solutions.

The emergence of digital payment applications, such as Google Pay, Amazon Pay, PayPal, and others improved customer experience during the pandemic. These applications reduced physical interactions and directed consumers toward contactless shopping and payments, thereby helping enterprises improve customer satisfaction.

Post the COVID-19 outbreak, businesses across retail, BFSI, and consumer electronics sectors are focusing on offering enhanced customer experience. These companies are adopting innovative solutions to keep pace with the changing customer requirements. For instance,

• January 2021: IBM Corporation collaborated with Audi U.K., an automotive manufacturing giant, to redesign the company's website to improve the digital experience of its customers. Due to COVID-19, the company’s online sale inquiries increased by 59% in 2020.

LATEST TRENDS

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Rising Integration of Virtual Assistants to Propel Market Growth

Virtual assistants help automate customer interactions using customer insights generated from historical data. Integration of virtual assistants including Amazon’s Alexa, Apple’s Siri, and others help redefine customer engagement by providing 24x7 customer support, multi-lingual support, and fast & accurate response. Similarly, virtual assistants can automate repetitive tasks, accelerate self-service resolutions, and compress organizational hierarchies that improve employee and customer experience. This factor is expected to foster the demand for CEM solutions.

Organizations, such as SAP SE, Salesforce, and Oracle Corporation are developing virtual assistants for their applications. These assistants or bots help organizations analyze customer sentiments and offer personalized recommendations to customers, which, in turn, will boost the demand for these solutions in the coming years.

Virtual assistants help enterprises establish personalized connections with customers and deliver better customer experiences effectively and rapidly. Organizations have incorporated bots or virtual assistants in their front-office services to automate routine tasks.

This rapid adoption of chatbots and virtual assistants across various industries is expected to boost the demand for CEM solutions in the coming years.

DRIVING FACTORS

Rising Adoption of Artificial Intelligence and Augmented Reality across Industries to Drive Market Growth

The rapid adoption of Artificial Intelligence (AI) and Augmented Reality (AR) across industries, such as retail, IT & telecom, BFSI, among others, has played a vital role in enhancing customer experience. Integration of AI and machine learning across consumer experience management solutions assists in predicting future customer behavior. Predictive analytics and AI-enabled solutions aid the extraction of meaningful insights from customer data. Thus, organizations focus on implementing advanced technologies to improve customer experience. For instance,

• December 2021: TPG launched Anna, an AI-based customer experience platform that evaluates 15,000% more interactions at high accuracy. The Anna chatbot can evaluate 100% of the customers’ interactions and provide sample-based evaluation of chat and voice communication with the customers.


• October 2021: Jio Haptik Technologies Limited, a subsidiary of Jio Platform Group, launched an advanced self-serving enterprise customer experience platform. The platform helps brands build intelligent virtual assistants for better customer experience.

Organizations adopt advanced AI applications, such as facial recognition, biometric measures, chatbots, and digital assistants to improve customer satisfaction. For instance, Facebook Messenger bots use AI and machine learning to help shoppers find what they are looking for by engaging in simple conversation. This factor helps enhance customers’ shopping experience and increase profitability.

The adoption of Augmented Reality across the retail sector will help improve the shopping experience of customers. For example, IKEA has used Augmented Reality to display its furniture in real-time, helping customers make a buying decision and reduce return rates. A report published by Capgemini in July 2020 states that 54% of customers engage in AI-enabled interactions such as virtual assistants, bots, and others daily. Along with this, 49% of customers find AI interactions secure and trustworthy. Thus, the rapid adoption of virtual assistants/bots may drive the consumer experience management market growth in the coming years.

AI-powered solutions help organizations provide tailored solutions, analyze customer conversations, and understand their grievances. Voice and text sentiment analysis assists in predicting customers’ emotions and sentiments. Thus, enterprises focus on offering advanced technology-based consumer experience services to provide customized solutions and improve customer experience.

Digital Transformation across Retail and Healthcare Sectors to Surge Demand for CEM Solutions

With the evolution of e-commerce and digital banking, customers have become more inclined toward digital channels. Retailers have shifted from physical stores to digital platforms. Along with this, they have adopted AI-enabled virtual trial rooms, chatbots, and surveillance to capture and analyze customers' behavior. Brands use multiple channels, such as social media, mobile applications, and websites to increase their visibility.

The rising proliferation of social media channels including Facebook, Instagram, YouTube, Twitter, and Pinterest, has increased brand awareness, marketing campaigns, and direct shopping trends. Various brands are setting up social media shops to ease their customers’ buying process. For instance, Facebook and Instagram shops help retailers acquire new customers and buy directly from social media platforms. Consumer experience solutions help retailers reduce customer churn rate, extend their lifetime value, and retain customers. Such changing consumer buying behaviors are predicted to boost the market.

Digitalization across healthcare has accelerated the adoption of e-health applications, telemedicine, smart health equipment, and wearable devices. Due to digitalization across this sector, customer expectations, such as 24x7 service and instant replies are also growing. Thus, organizations are adopting various strategies to improve customer experience.

RESTRAINING FACTORS

Rising Regulatory Compliance and Data Privacy Concerns to Restrict Market Growth

Increasing usage of digital platforms has raised concerns regarding data privacy and security. Rising cybercrimes and data thefts can negatively impact a customer’s experience.

Governments have introduced new regulations in response to rising data breaches and data protection issues. These government regulations strengthen virtual data protection and security. For example, General Data Protection Regulation introduced by the European Union in May 2018 offers data protection regulations and monitors a person’s behavior within the region. Similarly, the U.S. federal government introduced the California Consumer Privacy Act in January 2020 to provide customers access to or have control over their personal data.

Similarly, other government regulations, such as Payment Card Industry Data Security Standard (PCI), Health Insurance Portability and Accountability Act (HIPAA), Sarbanes-Oxley (SOX), Gramm-Leach-Bliley Act (GLBA), and the Family Educational Rights and Privacy Act of 1974 (FERPA), provide data protection rules to keep sensitive information about customers secure. Customer experience management solution providers need to address regulatory compliances while leveraging customer data. Such government regulations are likely to impede the market growth.

SEGMENTATION

By Component Analysis

Rising Usage of Mobile Applications to Boost Usage of CEM Solutions in Organizations

Based on component, the market is divided into solution and services. The services segment is further bifurcated into professional and managed. The solution segment held the largest market share in 2022. The rising adoption of mobile applications and an increasing number of call centers to improve customer experience will drive the demand for CEM solutions. These solutions support organizations in managing daily interactions with customers.

The services segment is anticipated to record the highest CAGR during the forecast period. Many organizations are providing professional and managed services to end-users, along with customer experience management solutions. Professional services are expected to capture the largest market share during the forecast period due to increasing customer satisfaction rates. Professional services provide expertise, specialized knowledge, and experience to enable customers to achieve growth in their businesses, thus driving the customer experience management market growth.

By Deployment Analysis

Rising Demand across SMEs for On-premises Deployment Models is Accelerating the Market Growth

Based on deployment, the market is bifurcated into cloud and on-premises. Key players in the market are providing cloud and on-premises solutions to their customers. However, the on-premises deployment model is expected to be the fastest-growing segment during 2023-2030. The on-premises customer experience management solutions provide data security with better management. The adoption of on-premises-based solutions is growing due to rising regulatory compliances, such as GDPR and CCPA.

The rising adoption of cloud technology by SMEs is predicted to fuel the adoption of cloud-based consumer experience solutions. The growing usage of these solutions across industry verticals, such as BFSI, healthcare, retail, government, and others is expected to boost their demand. The segment is also anticipated to register the highest CAGR during the forecast period.

By Enterprise Size Analysis

Huge Investments by Large Enterprises in Advanced Technologies to Boost Market Growth

Based on enterprise size, the market is divided into Small & Medium Enterprises (SMEs) and large enterprises. Among these, the large enterprises segment is expected to hold the largest market share over 2023-2030. These enterprises are making substantial investments in advanced technologies to increase customer satisfaction. Development of advanced customer services, investment in IT infrastructure, and large workforces will drive the segment’s growth.

Small & medium size enterprises (SMEs) are likely to showcase moderate growth over the projected timeframe. Due to smaller customer databases and limited IT infrastructure, SMEs are focusing on implementing cost-effective customer experience management solutions that are equipped with advanced technologies. Hence, SMEs are likely to be the potential customers of such solutions.

By Touchpoint Analysis

Rising Call Center Touchpoint Interactions by End-users to Flourish Market Growth

Based on touchpoint, the market is divided into call center, website, mobile applications, email, social media, and others (virtual assistants, loyalty programs, and others). The call center segment held the largest market share in 2022. Call centers are equipped with all the necessary infrastructure and automated processes required to immediately address client queries. These centers enable the service providers to manage, monitor, and route their customers’ phone calls and engage with them effectively. Call center software equipped with advanced call analytics, predictive dialing features, improved security tools, and other features are likely to contribute to the major share of the call center segment.

The mobile application segment is projected to display the highest CAGR during 2023-2030. Mobile applications are driving marketing automation across many industries, which is expected to pave the way for new revenue streams for CEM vendors. The rise in e-commerce and social media platforms is also responsible for the market growth.

By End-user Analysis

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BFSI to Dominate as it Uses CEM Solutions to Provide Better Customer Experience

Based on end-user, the market is divided into BFSI, retail & consumer goods, IT and telecom, healthcare, automotive, media and entertainment, government, and others (oil & gas, education, and others). Among these, the BFSI segment is expected to hold a significant market share in the forthcoming years. Rising customer interactions with various touchpoints, such as call centers, emails, online banking systems, and social media might foster the adoption of consumer experience management solutions across the BFSI segment. To offer a convenient, secure, and digital customer experience to customers across this sector, organizations are adopting advanced solutions.

Followed by BFSI, the retail and consumer goods sectors are likely to hold a major share of the market. The adoption of consumer experience solutions might boost the demand for retail and consumer goods as these solutions ensure optimized supply chains and offer engaging experiences that can boost customer loyalty.

However, other industries, such as government, automotive, IT & telecom, and media & entertainment are expected to showcase moderate growth over 2023-2030.

REGIONAL INSIGHTS

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Geographically, the market is fragmented into North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.

North America has registered the highest incremental growth in the market due to its rising investment in research and development activities and a vibrant start-up ecosystem. Also, the U.S. is one of the early adopters of advanced technologies such as AI, Big Data analytics, and cloud computing. The presence of prominent CEM vendors, such as Salesforce.com Inc., among others, and their strategic business activities, such as mergers & acquisitions, are likely to drive the North America customer experience management market share.

The Asia Pacific market is expected to exhibit a remarkable growth rate during the forecast period. Rapid adoption of e-commerce platforms has created unprecedented market opportunities for consumers and businesses. The market’s growth in the region is likely to be spearheaded by China. Seamless internet connectivity, proliferation of mobile devices, and increasing demand for digital payments have led e-commerce companies to adopt a unified data platform to target new consumers.

Furthermore, growing digitalization and adoption of Big Data and data analytics in Europe will boost investments in digital platforms. Rising government policies regarding customer data privacy have boosted the usage of digital platforms among advertisers and marketers. To capitalize on these trends, leading players are developing advanced customer experience management solutions. For instance, in April 2021, Dentsu launched an advanced platform in collaboration with Merkle Company in North Europe.

The Middle East & Africa market is projected to exhibit a significant CAGR during the forecast period. The social media penetration rate in the region shows that the adoption of mobile internet and number of social media users will continue to grow across the MEA. This factor is likely to create lucrative market opportunities for the key players.

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The Latin America market is anticipated to showcase moderate growth as many companies are headquartered in North America and Europe and offer software services in this region. IT & telecommunication, healthcare, manufacturing, and government are some of the sectors that have showcased high potential for technology-based investments across this region.

KEY INDUSTRY PLAYERS

Companies Focus on Relevant Mergers & Acquisitions and Partnerships to Gain Competitive Edge

The key players in the global market continuously engage in collaboration and acquisition strategies to position them better in the global market. These key players are utilizing this strategy to cater to the changing requirements of the users effectively.

List of Key Companies Profiled:

• Zendesk Inc. (U.S.)


• SAP SE (Germany)


• Oracle Corporation (U.S.)


• Adobe Inc. (U.S.)


• Medallia Inc. (U.S.)


• OpenText Corporation (Canada)


• Microsoft Corporation (U.S.)


• Salesforce.com, Inc. (U.S.)


• Genesys (U.S.)


• Freshworks Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• March 2023 - Q-nomy, a company specializing in customer journey management solutions, launched Cubu. Cubu combines customer flow management, appointment scheduling, and customer interaction management in one integrated solution.


• October, 2022 – ResultsCX, a Customer Experience Management service provider, expanded its geographic presence in the U.K. and Europe. The company completed this expansion by acquiring a Bulgarian CXM provider and establishing its European headquarters in London.


• May, 2022 - Zendesk, at its flagship conference, launched new solutions specifically designed to put conversations at the center of CRM. Along with this, the company also introduced a new employee experience solution to help businesses transform internal operations and create a better hybrid work experience.


• April, 2021 – NICE Ltd, a leading provider of on-premises and cloud enterprise software solutions, launched CXone, an advanced AI-based CEM solution. The CXone software provides personalized content for customers seeking self-service.


• February 2021 – Oracle Corporation rolled out new updates to its CEM platform. The latest update included new B2B selling capabilities, new B2C service capabilities, and new loyalty and marketing features. These new characteristics were expected to help organizations create a memorable and dynamic experience for customers.

REPORT COVERAGE

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The research report highlights leading regions across the world to offer users a better understanding of the market. Furthermore, the report provides insights into the latest industry trends and analyzes technologies deployed at a global level. It further highlights the driving factors, the market’s size, share, and restraints, helping the reader gain in-depth knowledge about the market.

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