If you’ve ever seen ads for an item you mentioned in conversation pop up on your Internet browser minutes later or received a personalized offer from a brand ahead of your birthday, it’s not because Big Brother is watching.
Rather, it’s highly likely that a digital experience platform (DXP) was behind it. DXPs are designed to anticipate what customers want, detect purchase intent and deliver offers across multiple touchpoints at the precise moment customers are ready to make a decision.
DXPs also erase the friction of untargeted advertising. No one wants to get an email promoting a product they just purchased, or click the link in a promotional email only to be taken to an unrelated webpage. With third-party cookies on the way out, brands are forced to find new ways to offer personalized customer experiences.
Brands are also increasingly expected to personalize for an audience of one, rather than segmenting users based on behavioral similarities — an impossible feat without marketing automation and AI-assisted upselling/cross-selling.
In fact, DXPs help companies accelerate the digital transformation by providing the necessary architecture for delivering multichannel customer experiences and gathering customer insights. Meanwhile, digitally mature businesses can differentiate themselves by unleashing the power of DXPs.
During the first ecommerce wave beginning with Amazon’s founding in 1994, businesses relied on traditional content management systems (CMS) to set up online stores. But the digital landscape has grown far more sophisticated with the addition of new digital touchpoints including social media, messaging apps, voice-activated devices and in-store kiosks.
DXPs enable businesses to create, deliver and optimize the digital customer experience across all platforms.
A CMS is a low-code/no-code software application for building and managing desktop and mobile websites. Users can purchase templates and extensions for enhanced customizability instead of writing code.
However, CMS tools, many of which are open-source, don’t support data gathering. Businesses use them to create brochure-like static content and establish a web presence, but there is no personalization or sophisticated web analytics for lead generation.
Compared to a DXP, a CMS has a much simpler architecture as it focuses squarely on website content.
As the social web expanded with user-generated content and the rise of smartphones, the need for personalized digital commerce led to web experience management (WEM) solutions. Now, businesses needed not only a website but a presence across multiple channels — social media, email, mobile devices and messaging platforms. WEM enabled businesses to manage the overall experience across channels and gather customer insight data.
WEM uses advanced analytics to determine user behavior and serve content that meets users’ needs. Audience management, adaptive content and responsive design are all features of WEM solutions.
Compared to DXPs, WEM has limitations in terms of content personalization as it creates generalized audience types. Another problem is WEM systems were designed solely for marketing teams, making them hard to integrate with other software solutions such as CRM or ERP software. While marketing teams used WEMs to generate new leads, they had no way of automatically passing on qualified leads to the sales team.
DXPs are designed to overcome the pitfalls of WEM solutions. They serve as an all-encompassing platform for digital asset management across channels including websites, mobile apps, customer portals, IoT devices and social media. DXPs use AI and machine learning to personalize web pages, emails and more for an audience of one rather than grouping users into behavioral cohorts.
DXPs easily integrate with other software solutions, allowing organizations to achieve a 360-degree view of the customer by integrating their ecommerce data with analytics from their CRM, commerce systems, call center software and more.
DXPs can allow businesses to deliver more personalized experiences with uniform consistency across channels.
The omnichannel customer experience focuses on the overall quality of interaction between a customer and a brand rather than a specific exchange on a single channel. DXPs streamline every possible form of customer interaction — online and in-person — and eliminate data silos between channels.
For example, beauty retailer Sephora lets customers book makeover appointments on Facebook Messenger. When the customer logs into their account on the desktop website, they’ll see details of their appointment, and when they arrive at Sephora on the day of, retail associates can view the customer’s information on the store’s POS.
Data shows that delivering omnichannel experiences can increase customer retention by 90%.
APIs make it easy to connect a DXP with other software solutions in the organization’s technology ecosystem, including marketing, commerce and customer support platforms. Integration with other platforms provides a real-time, 360-degree view of each customer, intuitive dashboards and machine learning-powered insights.
Lean software architecture enables businesses to integrate new technologies as digital maturity increases or new technologies appear, rather than being stuck with outdated software.
DXPs are built on a MACH (Microservices, API-first, Cloud-native, Headless) platform, which makes it possible to combine and integrate microservices in virtually limitless ways. Microservice architecture arranges an application as a collection of loosely coupled services, rather than a monolithic application.
For example, shopping cart, checkout and logistics might be offered as separate microservices, unlike a software application that handles order fulfillment from end to end. Unbundling these services enables businesses to build more complex, highly customized applications while scaling quickly — thereby reducing dependency on a single platform.
DXP architecture consists of the following three layers:
DXPs automatically gather customer data across all contact channels — including browsing habits, purchases and responses to marketing campaigns. The platform’s built-in AI capabilities can discover information hidden deep in high-volume data. For example, what is the overall customer sentiment regarding a specific product line? What types of referral incentives are most/least effective? What types of gated content drive the most conversions?
These insights help DXP optimize the user experience at every customer touchpoint. A 2021 McKinsey report shows that “71% of consumers expect companies to deliver personalized interactions.”
AI not only automates the analysis, but it can also act on those insights without being prompted, such as creating customer segments, personalizing a webpage according to the user’s preferences and generating email lists for qualified leads.
Using pre-configured recommendation models, AI organizes content delivery based on individual customer journeys (eg: links clicked, websites visited and other browsing habits). This enables businesses to personalize content creation and product recommendations.
For example, if a customer inquires about a product in a WhatsApp chat, the next time they visit your website, they’ll see that item in their recommendations.
Finally, extensive monitoring capabilities allow you to assess how your content delivery models are performing and even see how much additional revenue your personalized content generates.
DXPs can automatically track the most important KPIs for your business by aggregating data from all customer channels. This allows businesses to see individualized data for each customer to better understand the user journey, or zoom out for a bird’s-eye view of overall campaign performance.
Businesses can also determine the ROI of each digital touchpoint and make data-driven decisions over which channels, products and customers bring the most value.
Different types of DXPs emerged over time to cater to different industry use cases. While some DXPs specialize in the pre-purchase journey, others hone in on after-sales care.
A CMS DXP builds upon the capabilities of a traditional CMS by providing analytics and persona-based segmentation. This type of DXP is best for customer acquisition, lead nurturing and delivering personalized promotions. Adobe Experience Manager and Sitecore Web Content Management are both examples of CMS DXPs.
Portal DXPs are uniquely suited to nurturing long-term customer relationships after the sale. Similar to microsites, portals aggregate personalized content to enable customers to self-service. They are highly useful for commerce experiences that require a user to login, such as mobile banking.
On the backend, portals provide analytics that help companies track customer loyalty, retention and customer engagement. Designed primarily for fintech and manufacturing businesses, these platforms calculate metrics like customer satisfaction (CSAT) and Net Promoter Score (NPS). Portal DXPs include backend features like CMS, mobile support, workflow automation and mobile support, while some focus mainly on frontend presentation.
“Composable” refers to a type of software architecture that allows users to assemble best-of-breed solutions from different vendors. It refers not to one product but an architecture that uses APIs to link microservices (highly specialized and independently deployable software packages) together.
This setup enables businesses to deliver content and digital experiences in a more agile and flexible way than a single monolithic platform by easily adding new capabilities such as voice search.
Commercial DXPs are primarily used by retail companies to manage services like shopping cart, checkout, online payments, order fulfillment and inventory management. However, they also provide product content delivery for ecommerce web interfaces.
The utility of a DXP depends on your business requirements and customer base. Here are characteristics of businesses that stand to gain the most from a DXP:
If you have both digital and in-store touchpoints, a DXP can provide a single interface for creating and distributing content that is automatically optimized for each platform (eg: build a single website interface rather than having to optimize for desktop and mobile).
DXPs are made for digital businesses regardless of whether or not they operate a physical store.
For businesses that cater to different customer personas/segments and offer products with varying lifecycles, personalization is of the essence. Also, do your customers use a variety of digital platforms? If so, a DXP is necessary to reach them via their preferred channels.
Organizations that have multiple backend systems that are not integrated with each other stand to gain the most from a DXP, which facilitates data sharing via custom APIs.
DXPs extend the prowess of digital marketing teams by providing marketing automation and digital experience management tools that enable humans to focus on what they do best: being creative.
Before you embark on a digital transformation using a DXP, build the best possible version of your ecommerce website. As one of your most active touchpoints, consider it the foundation for your DXP strategy.
Next, determine what type of DXP is best for your customers. Is it a CMS, portal or commercial DXP? This depends on factors such as budget, business objectives, existing digital channels and what pain points you’re hoping to solve using the technology. A more integrated platform may suit your needs but if you just need a simple CMS, then going with a headless CMS may not be right for you.
DXPs are built on lean architecture that is designed to evolve as technologies change. These emerging trends make DXPs even more of a necessity for digitally maturing businesses.
While voice commerce still lags far behind online shopping — only 0.58% of shoppers rely on smart speakers to close deals — nearly 75% of smartphone owners have tried using a voice search app.
However, voice assistants are fast becoming a handy tool for product discovery, even if purchases are generally finalized on a smartphone or desktop website. DXPs are essential to creating and managing customer experiences across a variety of touchpoints.
The death of third-party cookies and the passage of data privacy laws including the CCPA/CPRA (California’s version of the EU’s GDPR) have forced businesses to rethink personalization in ways that don’t necessarily involve ad retargeting.
The onus on businesses to personalize digital content for an audience of one rather than relying on customer segmentation makes automation a crucial component of delivering web pages, emails, chatbot greetings and app notifications that are tailored to the user.
The greatest test of business resilience is adaptability during times of change. DXPs enable businesses to add or remove microservices, integrate different software applications and take advantage of new technologies including AI, data management and voice technologies.
DXPs are emerging as a must-have for businesses that want to future-proof their operations, provide a memorable customer experience across digital channels and remain on the cutting-edge of new technologies.
Before selecting a DXP vendor, get clear on your business goals. Next, determine what KPIs you’ll need to track to measure those goals. Now you’re ready to define what technical functionality you’re looking for in a DXP.
Consider your organization’s existing technology stack — what integrations are non-negotiable? Which digital channels must you have a presence on? What type of analytics and reporting capabilities are you searching for?
Finally, define your non-technical considerations including pricing, timeline and stakeholder buy-in. Narrow down the solutions that will square with these needs. When comparing vendors, it may also help to consult software comparison tools such as the Gartner Magic Quadrant for Digital Experience Platforms or this 2022 report by Forrester.
A CMS is designed purely for web content management and generally lacks analytics capabilities. On the other hand, a DXP is a one-stop platform for creating and managing content across virtual and digital customer touchpoints. The system aggregates behavioral data from every digital channel and is equipped with AI-powered analytics.
Organizations that generate the most revenue from digital channels can benefit greatly from having a DXP. Those in highly competitive industries need software systems that can quickly evolve and scale in response to changing customer needs.