Customer Experience as a Service (CXaaS) Market Size, Share & COVID-19 Impact Analysis, By Service Type (Campaign Development, Cross Channel Marketing, Omni Channel Engagement, and Others), By Enterprise Size (Small and Medium Enterprise, Large Enterprise), By Industry (BFSI, IT and Telecom, Government, Retail and Consumer Packaged Goods, Manufacturing, Healthcare and Life Sciences, Media and Entertainment, and Others), and Regional Forecast, 2021-2028

The global customer experience as a service (CXaaS) market size was USD 1.45 billion in 2020. The market is projected to grow from USD 1.64 billion in 2021 to USD 4.17 billion in 2028 at a CAGR of 14.2% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with the CXaaS platform witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant growth of 13.2% in 2020 as compared to year-on-year growth during 2017-2019. The steady rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The growth of global market is mainly driven by increasing adoption of digitization among various industry verticals, rapid integration of multichannel touchpoints, and a growing need for customer data analysis to drive business growth. Brands increasingly depend on customer experience management solutions to boost customer experience solutions, determine customer requirements, and manage customer interactions. The key players operating in the market enter into strategic partnerships and collaborations to integrate the customer experience as a service platform with several critical components and enhance their solutions. For instance,

• In January 2021, Hexaware Technologies Ltd. announced a partnership with Active.AI, headquartered in Singapore. The partnership aims to provide next-generation Digital Customer Experiences for the Banking and Insurance Industries. The collaboration will enable omnichannel banking experiences powered by innovation for a better customer experience.

Such initiatives by key players are likely to propel the adoption of customer experience as a service among businesses.

COVID-19 Impact

Growth of Global Retail and E-commerce Industry to Boost Adoption of Customer Experience as a Service Platforms Amid COVID-19

The COVID-19 pandemic has a moderate impact on this market. COVID-19 has had a major influence on several core industries, such as manufacturing, logistics and transportation. On the other hand, due to a sudden increase in consumers, end-users such as retail, e-commerce, healthcare, and the public sector rapidly implemented Customer Experience Management (CEM) solutions during the pandemic.

For handling extensive customer data and satisfying consumer expectations, businesses are turning to customer experience services. E-commerce, logistics, online learning, food delivery, and online business collaboration are all seeing significant growth, putting pressure on their customer-facing applications and forcing them to adopt effective customer experience platforms. Key players operating in the market are taking key initiatives to offer companies end-to-end personalized experience services. This factor is expected to boost the demand for customer experience as a service during the spread of Covid-19. For instance,

• In April 2021, TTEC Holdings, Inc., a leading CX technology and services company, acquired Avtex, an IT managed services company. This acquisition will complement TTEC’s CX-as-a-Service (CXaaS) technology and services platform. With this acquisition, TTEC plans to expand its global footprints in the CX services and technology industry.

Due to the increasing desire for a single customer view and decreased attrition rates during the COVID-19 crisis, there is a rise in demand for customer experience platforms. The adoption of sophisticated technology to provide a better customer experience is projected to expand exponentially, fueling the market's growth. The COVID-19 epidemic is reshaping the industry and has altered all company strategies in recent times.

LATEST TRENDS

Artificial Intelligence (AI) will Transform the Market by Unleashing Value Across Customer Experience Channels

AI is ushering in a new era of consumer experience (CX) strategy, design, and development. Leading businesses sort through AI trends and invest in sophisticated technology to support their customer experience initiatives. Artificial intelligence may be used to offer a smart, convenient, and informed customer experience at each step in the customer journey. This factor will result in reimagined customer experiences and personalized end-to-end customer journeys that seem more natural to customers. According to a study conducted by Microsoft Corporation, 95% of all customer interactions will be through AI-based communication channels by 2025.

Every customer interaction with a brand across various communication channels generates a trail of data that may be utilized to develop intelligence and determine the types of services to be provided. AI has enabled businesses to examine enormous amounts of data and manage any client history. AI-enhanced customer experience is being used in various areas, including improving customer support and service interactions, increasing returns, identifying issues, and improving website experience, message, and personalized offerings. This trend will result in reimagined customer experience and end-to-end customer journeys that are more personalized to customers.

DRIVING FACTORS

Increasing Need for a Comprehensive Customer Experience Service Platform to Aid Growth

Brands increasingly rely on customer experience services to discover consumer needs and ensure that customer demands and corporate offerings are in line. Businesses are also integrating cloud-based technology, advanced analytics, and automation to offer highly tailored customer experiences, decrease churn rate, and promote brand loyalty. Companies are always focusing on adopting CX offerings that allow successful customer experience to stay competitive in the market. Throughout the customer experience industry, companies create partnerships and co-operate with other major players to provide customized services based on customer outcomes and data interpretation. For instance,

• In May 2021, Tata Consultancy Services (TCS), a global leader in IT and consulting services, launched a cloud-based Subscription solution that leverages SAP business technology platform to help media companies to transform the customer experience.


• In June 2018, Zendesk Inc. launched new collaboration and workflow tools to help organizations deliver better customer experience services. These tools are designed to help large organizations respond to customers' needs easily and quickly, deliver better customer needs, and help customer agents to collaborate with business professionals to solve customer issues.

These efforts by major players are assisting businesses in transforming their digital portfolios, eliminating friction in interactions, and establishing a culture of continual innovation that will enable them to make more fundamental organizational changes and enhance customer experience.

RESTRAINING FACTORS

Difficulties in Receiving Constant Customer Feedback Through all Channels to Impede Market Progress

The customer interactions with enterprises matter for delivering effective customer experience suites and consistency throughout the customer journey. Businesses amass vast amounts of data through a number of channels to better understand consumer preferences, requirements, and purchase habits, among other attributes. With the constant expansion and complexity of touchpoints in the customer feedback process, businesses must enhance the speed of integration. Data is acquired from many touchpoints that are distinct from one another, and organizations must categorize the information depending on consumer needs and expectations. Due to the data set differentiation between different touchpoints, businesses and customer experience management teams find it difficult to structure it differently. To examine a huge number of structured and unstructured datasets, companies need to invest in resources.

Additionally, the companies must follow consumer protection policies such as General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) to comply with security legislation. In data thefts or security breaches, businesses may be subject to legal proceedings against consumers' data. This factor causes difficulties that hinder customer experience as a service from providing the best Return on Investment (ROI).

SEGMENTATION

By Service Type Analysis

Cross Channel Marketing to Capture High market Share

The global market has been segmented into campaign development, cross-channel marketing, Omnichannel engagement, and others based on service type.

The cross-channel marketing segment captured the largest market share in 2020. The growing use of customer experience services to create an integrated, uniform experience across brands drives this segment's growth. Cross-channel marketing is a systematic, customer-focused digital marketing technique used by marketers worldwide to provide customers with a consistent experience while interacting with their brand across several digital channels.

The campaign development segment is expected to grow considerable CAGR over the forecast period. Adoption of campaign development techniques has increased as organizations strive for better success in the ever-changing digital revolution. For businesses, creating and tracking the progress of a yearly production plan has become critical. Companies have been able to tap into hidden growth factors, extend market perspectives, reach out to potential consumers, and achieve longer-term goals by developing campaigns based on customer expectations.

By Enterprise Size Analysis

Large Enterprises to Showcase Strong Improvement in Customer Experience as a Services Adoption

Based on enterprise size, the market is segmented into small and medium enterprise and large enterprise.

Large businesses are more likely to use customer experience as a service platform. Major-scale economics and resources are available for large companies to implement CXaaS platform. Large organizations are increasingly turning to customer experience as a service model to achieve customer-centricity across operations and stand out in today's competitive market.

The growth of customer experience as a services in SMEs will be driven by the increasing demand for customer experience and management platforms. Understanding customer behavior and preferences have become increasingly important for SMEs, prompting them to use customer experience services to provide the greatest service performance in real-time.

By Industry Analysis

Retail and Consumer Packaged Goods Industry is Projected to Experience a Healthy Growth Rate

Based on industry, the market is categorized into BFSI, IT and telecom, government, retail and consumer packaged goods, manufacturing, healthcare and life sciences, media and entertainment, and others.

The adoption of customer experience as a services platform will be high in the BFSI industry segment. The growing usage of CX technologies in the industry has been aided by mobile and online banking expansion. Banks and financial institutions focus more on customizing client experiences to earn public trust and establish long-term consumer loyalty. Moreover, with rising competitiveness, businesses are looking for different solutions that will enable them to understand the needs and behavior of their targeted audience and optimize their service offerings.

The retail and consumer goods segment is expected to witness the highest CAGR over the forecast period. The segment's growth would occur because of intense competition in the industry and firms' growing attention on digital preparedness and enhancing front desk experience through the use of digital technologies to minimize marketing expenses. The requirement for efficient analytical tools for simplifying the contextual engagement process with customers and using the data obtained for pattern analysis is also anticipated to promote CXaaS growth.

REGIONAL INSIGHTS

Geographically, the market is segmented across five major regions, namely, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

North America is expected to dominate the global market in terms of revenue and is expected to gain momentum on account of increased technological spending and high-tech infrastructure. The growth of the regional market is mainly attributed to the continuous digital transformation across various industries such as healthcare, retail, IT & telecommunications, among others. Furthermore, U.S. and Canadian businesses' increased expenditures and budget allocations for digital platforms and marketing contribute to regional market growth.

Europe captured a significant market share in the global market. One of the major reasons driving market growth in Europe is the rising use of AI-driven advanced analytics tools to provide personalized services to B2B and B2C customers. The number of SMEs in countries like Germany and the U.K. is constantly increasing and are deploying CEM solutions as part of their attempts to grow their regional and worldwide companies.

Asia Pacific is expected to showcase strong growth over the forecast period. Digital transformation has opened up plenty of endless opportunities for contact centers, and the Asia-Pacific region is seeing widespread adoption of customer experience platforms across various sectors. Furthermore, the growing demand for client retention drives businesses to focus on delivering various products and services that provide end-user satisfaction and may help businesses establish customer loyalty.

Middle East & Africa, and South America are expected to witness significant adoption of customer experience as a service platform. The rising use of automated CEM solutions in the regional market is facilitated by increased digitization of processes or infrastructure in the corporate sector. Through digital experiences, companies may obtain a deeper knowledge of the underlying requirements of end-users. Also, the growth of the regional retail and e-commerce sector is expected to contribute to the market's growth.

KEY INDUSTRY PLAYERS

Key Players to Develop Effective Customer Experience as a Service Suites to Cater to Rising Demand among Consumers

Prominent companies operating in the market, such as TTEC Holdings, Inc., Oracle Corporation, Virtusa Corporation, Capgemini SE, among others, are focused on developing and offering efficient CX service suites. Also, the high competition in the market is forcing service providers to focus on acquisition strategies for strengthening their positions.

• February 2021: Cisco Systems, Inc., a leading technology company, acquired IMImobile PLC, a leading communication software provider. By integrating IMImobile solution functionality into Webex Contact Center, Cisco aims to offer robust CXaaS offerings.

LIST OF KEY COMPANIES PROFILED IN THE REPORT:

• NTT DATA, Inc. (Tokyo, Japan)


• Bain & Company, Inc. (Massachusetts, U.S.)


• Zendesk, Inc. (California, U.S.)


• TTEC Holdings, Inc. (Colorado, U.S.)


• Capgemini SE (Paris, France)


• IBM Corporation (New York, U.S.)


• Hexaware Technologies Limited (Mumbai, India)


• Oracle Corporation (Texas, U.S.)


• MASTECH INFOTRELLIS, INC. (Georgia, U.S.)


• Verint Systems (New York, U.S.)


• Sutherland (New York, U.S.)


• Adobe Inc. (California, U.S.)


• Avaya (North Carolina, U.S.)


• OpenText Corporation (Waterloo, Canada)

KEY INDUSTRY DEVELOPMENTS:

• June 2019 - Hexaware Technologies Limited., a leading customer experience company acquired Mobiquity Inc. With this acquisition, the company aims to accelerate customer experience offerings and improve digital transformation among businesses.


• March 2019 - Bain & Company, Inc. launched NPS Prism, a cloud-based CX service. This launch would help companies address business leaders' problems, such as progress against goals, a benchmark for gauging competitive performance, and a lack of reliable, high-quality net promoter score.

REPORT COVERAGE

The customer experience as a service (CXaaS) market research report provides an in-depth market analysis. It focuses on key aspects such as leading companies, product industry, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several key factors contributing to the market's growth over recent years.

Report Scope and Segmentation