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The customer engagement solutions market size is forecast to increase by USD 11.60 billion at a CAGR of 10.8% between 2022 and 2027. The growth of the market depends on several factors, including the increasing adoption of e-commerce business models, the increasing importance of customer services, and the integration of AI with customer engagement solutions.
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Increasing adoption of e-commerce business models is the key factor driving the growth of the market. To capitalize on the rising popularity of smartphones and related apps, new providers are turning to e-commerce business strategies. E-commerce giant like Amazon is expected to generate USD 367.19 billion in online sales in 2021, but traditional retailers such as Walmart and Macy's are struggling to keep up.
Moreover, to remain competitive, many offline stores are reducing their store count and concentrating on a smaller number of retail outlets. These merchants are leveraging internet business (e-commerce) platforms as a new source of revenue and building an omnichannel presence. Rising internet usage and increasing adoption of e-commerce are expected to drive the growth of the market during the forecast period.
Increasing smartphone and Internet usage is a primary trend in the market. Due to the growing number of smartphones and internet usage, customers will be able to find information about a wide range of products and services in more than one channel, e.g. on the Web, Social Media, or other applications. A key factor that encourages customers to maintain their brand loyalty, thus contributing to consistent revenues for businesses across different sectors is customer service.
Furthermore, the adoption is driven by an increased amount of customer information and data, as well as a lack of adequate storage capacity, which has allowed businesses to gain benefits like process alignment, business consistency, and cooperation across the enterprise. Therefore, such factors will fuel the growth of the global market during the forecast period.
The availability of free and open-source software is a challenge that affects the growth of the market. Due to the high cost of SaaS solutions, free and open-source software is becoming increasingly popular, particularly amongst small and medium-sized enterprises with a low IT budget. SMEs can adopt and configure software licensing and subscriptions in line with their business model by using the availability of open-source software.
In addition, open-source systems with customizable architectures are being deployed by SMEs. Open-source allows small and medium-sized enterprises to benefit from all the functionalities of a commercially available SaaS solution but at an affordable price. This enables SMEs to take open-source solutions for customer engagement, which is projected to impede the growth of the market during the forecast period.
Market Dynamic
The market have become imperative in the dynamic landscape of the BFSI industry. Leveraging AI (Artificial Intelligence) and digital transformation, these solutions optimize customer touchpoints across various channels. In the banking sector, including credit unions and traditional banks, organizations are embracing workforce optimization (WFO) and quality management to enhance employee engagement. Fintech markets are particularly keen on digital adoption, exploring e-payment technology, and contributing to the evolution toward a cashless economy.
Robust customer engagement software powered by conversational AI platforms ensures accurate interactions, reflecting positively on the brand's potential. With a focus on omnichannel marketing through websites, mobile apps, and social media feeds, these solutions elevate consumer experiences, catering to the diverse digital skills and preferences of internet users. Cloud technology further enhances back-end operations, making digital engagement platforms indispensable for organizations navigating the evolving landscape of the BFSI industry.
The market share growth by the solutions segment will be significant during the forecast period. The market is defined as the delivery of a variety of solutions that allow businesses to make better decisions, increasing their Net Promoter Score (NPS) and generating seamless, personalized, omnichannel communications and multi-channel communication on all media at any given moment, when supported by services and know-how.
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The solutions segments showed a gradual increase in the market share of USD 7.34 billion in 2017 and continued to grow by 2021. It can range from a live chat tool that enables customer communication tools that service channels to enterprise-level software for every single point of contact that users have had throughout their sales experience with the Company. The integration of analytics into customer loyalty solutions is a key factor driving the growth of solutions in the global customer loyalty solutions market during the forecast period.
The cloud-based segment is anticipated to rise significantly. Cloud-based solutions include regular payments instead of large one-time investments and recurring costs for maintenance and updates, as with on-premises software. Some hosted solution options may require a higher upfront cost followed by a lower annual support payment. In either case, there are always advantages to using a hosted solution instead of a locally installed solution. As a result, the benefits of cloud-based are expected to fuel the growth of the cloud segment of the global market during the forecast period.
The customer engagement solutions market is thriving with innovative tools and strategies designed to enhance interaction and satisfaction. From robust (Customer Relationship Management) CRM software to efficient customer feedback tools, businesses are leveraging various platforms to strengthen relationships with their clientele.
Loyalty programs and personalized marketing initiatives further enrich the customer experience, while social media engagement and email marketing platforms offer dynamic channels for communication. Live chat support and customer service automation streamline interactions, ensuring prompt responses to inquiries and concerns.
With customer satisfaction surveys and voice of customer analytics, organizations gain valuable insights into consumer preferences and behaviors, allowing for informed decision-making. Additionally, customer journey mapping and customer experience management enable businesses to tailor their offerings to meet evolving needs.
The industry's trajectory is shaped by dynamic market trends and comprehensive market analysis and reports, driving continuous market growth analysis and innovation in customer engagement solutions.
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North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional drivers market trends and analysis that shape the market during the forecast period. The availability of advanced technology infrastructure and the presence of multiple cloud service providers (CSPs) such as Microsoft, Salesforce, Oracle, and Adobe are driving the market growth in the region.
Furthermore, businesses in the region are investing in cloud services to deploy enterprise applications to streamline business processes. The SaaS solution provides access to all types of software, including ERP, and HRM, via a web browser using one-click functionality. Additionally, ease of virtualization and flexible scaling are driving the growth of cloud-based services, and business automation with cloud services is driving the adoption of cloud-based services solutions to interact with customers in the region. Hence, such factors are expected to drive market growth and forecasting in this region.
The Market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Customer Engagement Solutions Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.8% |
Market growth 2023-2027 |
USD 11.60 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
10.35 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 32% |
Key countries |
US, China, Japan, UK, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accenture Plc, Avaya LLC, Calabrio Inc., Crmnext, eGain Corp., Enghouse Systems Ltd., Freshworks Inc., Genesys Telecommunications Laboratories Inc., IFS World Operations AB, International Business Machines Corp., Microsoft Corp., NICE Ltd., Open Text Corp., Oracle Corp., Pegasystems Inc., Pitney Bowes Inc., Salesforce Inc., SAP SE, ServiceNow Inc., and Verint Systems Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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