2021 is rapidly vanishing in the rear-view mirror, and it's been another challenging twelve months for retailers, characterized by disruption and transformation.

We've seen the growing complexity of customer journeys — to the point where more than half of customers engage with three to five channels during each journey — and, of course, the complex, ongoing impact of the global pandemic.

So, what does the road ahead hold? Making predictions is always a risky business, but it's worth it. In times like these, when change is rapid and constant, correctly anticipating the future can be a huge strategic advantage. Here's my take on what we can expect retail customer experiences to look like in 2022. Or, to put it another way, the trends and evolutions that should be on every retailer's radar.

1. Hyper-personalization will officially arrive

Retail brands have always been among the pioneers of personalized customer experiences. However, the very idea of "personalized" experiences really arrived in the public consciousness when retailers began tailoring product recommendations based on our browsing and purchase histories.

Today, retailers are getting better and better at collecting and applying customer and operational data — and in 2022, we're going to see that result in some truly hyper-personalized experiences.

Hyper-personalization goes way beyond saying, "We know you bought this band tee, so we think you'll like this sweater." Instead, it uses contextual data to anticipate customer needs and enable timely—and time-saving — interactions that can drive the propensity to purchase and create loyal customers. So when your customer returns to your online store and starts a chat, your virtual assistant can say, "Hi Mark, are you pleased with the shirt we just shipped? Let me know if you need to exchange or order another one in a different color." Just a 5% increase in customer retention produces more than a 25% increase in profit.

The AI needed to deliver such hyper-personalization already exists; the challenge for many retailers is still plugging in the data. In the next 12 months, we'll see more and more brands work to break down their remaining contact channel silos, aggregate, analyze, and leverage customer and engagement data, and take personalization to this exciting next level.

2. Retailers will embrace cloud-based digital contact centers

The trend toward cloud-based, digital contact centers is by no means exclusive to the retail industry. But as leading brands race to connect their engagement channels, and deliver smarter, hyper-personalized experiences at scale, many retailers will find it's the right strategic transformation at precisely the right time.

The process of transitioning to a cloud-based digital contact center will provide retail brands with a golden opportunity to rethink and reshape operations and customer journeys. It'll connect the dots between voice and digital engagement channels and between agent-led experiences and interactions with virtual assistants and IVRs. It will also and integrate with RPA (Robotic Process Automation) to complete end-to-end journeys without human intervention.

What's more, it'll bring a host of new customer engagement opportunities. Suddenly, retailers will find that adding new channels or expanding existing ones — for example, embracing asynchronous as well as synchronous messaging — is comparatively quick and easy, giving their customers the flexibility on how and when to communicate, putting the customer in control of the conversation.

Leading retailers will also seize the chance to integrate best-in-class AI directly into their digital contact center platforms, to supercharge everything from self-service channels to authentication processes, predictive analytics to agent coaching and support. On the subject of which...

3. Automation will transform agent experiences, not just customer ones

We all understand that great self-service — whether it's delivered through a virtual assistant on your storefront or app, or an IVR that front-ends your voice engagements — is great for agents as well as customers.

It allows agents to focus on helping customers with cases that genuinely require a human touch, and as such, makes their workday much less monotonous, and much more rewarding. The average churn rate for contact center agents is almost double most other industries at 30-45%.

In the next year, we'll see retailers step up their self-service channels to increase containment and customer satisfaction, using AI to create more human-like interactions, automate more sophisticated intents, and streamline hand-offs to live agents – all to create flexibility and simplicity for consumers. The result will be a better agent experience, too. Instead of changing yet another customer's order, they can, for example, help a customer understand what's covered by their product's warranty or expertly suggest add-ons and accessories that improve customer satisfaction and boost cross-sell revenue.

AI and automation will also impact the retail industry's service agents in ways that are much more direct. The benefits of using AI to support agents while they're interacting with customers are increasingly hard to ignore — whether AI is improving service consistency and CSAT by recommending next best actions, serving up the right customer information at the right time, or helping to automate and accelerate the tasks involved in post-call wrap-ups.

4. Retailers will step up fraud prevention, now that the CX cost has dropped

During the pandemic, e-commerce fraud, and fraud more generally, has surged. At the same time, customers now place an even higher value on trust when choosing between competing brands.

Until recently, the friction that stronger security checks would introduce into shopping journeys has left retailers reluctant to step up the fight against fraudulent activity targeting their brand and its customers.

But as we enter 2022, we've arrived at a time where the strongest methods of customer authentication and fraud prevention can be applied in essentially friction-free ways. By layering advanced biometrics with other risk factors, a retailer can now identify a trusted customer—or a known fraudster—in the background of an interaction with an agent, IVR, or virtual assistant. And because biometrics-based authentication can remove the need for passwords and security questions, it can also cut average handle times and boost contact center efficiency.

The 3D Secure 2.0 protocol also allows retailers to use biometrics when performing step-up checks on suspicious transactions. So again, biometrics helps retailers ensure a legitimate customer experience with minimal friction in their shopping journey while simultaneously making life much harder for the would-be criminals.

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