Just as companies and consumers
felt comfortable placing the
pandemic in the rearview mirror,
a new economic threat emerged.
After enduring declining
revenues, workforce shortages,
supply chain issues, and other
challenges brought about by COVID-19, reports of high
inflation and low unemployment
have given rise to fears of a
While CapTech’s third Consumer-Driven Innovation
Survey confirms that consumers are, in fact, wary
of an economic downturn, a common thread from
2020 and 2021 carries over to 2022: companies
ahead of the technological curve stand a better
chance of weathering the storm. Even when staring
down a potential recession, our study found that
74% of consumers are likely or somewhat likely to purchase from a company invested in innovation.
In addition, consumers are still motivated by a
company’s commitment to social and ethical
At the heart of these findings is the fact that brand
loyalty is as fragile as it’s ever been. From modern
to emerging to bleeding-edge tech, consumers are
paying attention, and preferences and opinions —
though always evolving — ultimately become
behaviors. While modern conveniences like smart
device payments and online chat have respectively
reached an adoption tipping point, newer tech like
augmented and virtual reality (AR and VR), along
with the Metaverse, still has its skeptics — but for
how much longer?
Throughout our three years of research, we continue
to hear a common refrain. To get ahead, companies
need to invest in innovation. It’s arguably more
important now, as the pandemic spurred innovation in several industries. In healthcare, telehealth services have gained significant steam.
In retail, online grocery markets only added to the
e-commerce craze. And for Fintech, contactless
payments aren’t going away anytime soon.
Though consumers might have recession fears, their emotions haven’t materialized into action yet: the most recent estimates released by the U.S. Department of Commerce’s Bureau of Economic
Analysis state that personal income, disposable
personal income, and, most importantly, personal
consumption expenditures (PCEs), have all increased.
Companies that hope to capitalize can find
encouragement in these industry examples and
personal consumption stats.
Chat Shifts from Consumer Hesitation to Expectation
Over the past year, consumers have become increasingly comfortable using conversational technologies.
The numbers tell a clear story: 54% of survey respondents have used live chat in the past six months, 60% feel like it makes a company more accessible, and 38% prefer to utilize live chat over calling a company.
In last year’s survey, just 29% of respondents were very interested in continuing to communicate via online chat, so this year’s responses show that conversational technologies continue to enjoy a steady increase in adoption.
Based on our survey, 63% of respondents showed a strong preference to use live chat over a chatbot. However, when asked which activities they would choose to use a chatbot for, reaching out to customer service was a clear winner at 80%. All of these statistics coalesce to tell a clear story: consumers appreciate the convenience of chat, live or simulated, and are leveraging it instead of picking up the phone.
In a post-pandemic world, this is a logical
development; consumers’ expectations have
changed, and they expect 24/7 access to a
company. While it’s a preference for convenience,
it’s a win-win for companies since this can lead to
a significant return on investment when compared
to costly call centers.
While the other activities listed in Figure 1 lag behind reaching out to customer service, conversational tech’s role in the customer experience will only increase in importance. We don’t have a crystal ball, but if the numbers continue to track in the same direction, some of the lagging activities will surge in a short span of time. And companies that haven’t adopted chat as a critical channel will miss out on the consumers who have.
How consumers are using chatbots
AR Continues to Find Its Footing in Specific Industries
While AR has not quite reached the heights of popularity that chat has, the technology is
certainly making headway. Right now, our survey
indicates that consumers are mostly utilizing AR for
entertainment purposes or to inform purchasing
decisions (see Figure 2). Of the respondents who
have used AR in the past year, 43% have used it four
to nine times, while 19% have used it more than 10.
In our experience, many companies are hesitant to adopt AR, and they have valid reasons:
development can be costly and it can be difficult to deploy. Yet consumers are growing increasingly
comfortable with AR, and that’s why the application
matters so much.
Entertainment, such as live sports, gives companies
opportunities to engage with consumers in a novel
way. The ability to preview or evaluate products, such
as the IKEA Place app, gives consumers confidence
to make a purchase. Educational opportunities are
also increasing in prevalence; for instance, Lowe’s
has leveraged AR for an in-store navigation app that can lead consumers to specific products—and
highlight special promotions along the way.
To receive a solid return on your AR investment,
companies have to find that sweet spot, which will
vary based on their products or services. When
asked why they might be hesitant to use AR, 63%
of respondents simply noted that they didn’t feel the need to use it. To capture the hearts and
minds of those that haven’t yet adopted it—and
especially those who have fully embraced it—simply
means companies need to apply the technology
strategically, and creatively, to meet specific needs.
How respondents have used AR
VR Shows Potential, but Companies Must Address Cost
Our study indicated that VR is still primarily used for
gaming. However, there are signs of a future revenue
stream for companies: we saw an upward trend in the
number of consumers who are comfortable using VR.
As with AR, the technology has the potential to serve
as a new path to purchase.
Only a small contingent of our respondents own a
VR headset (14%) or used a VR headset device in the
past six months (13%). As far as reasons why some
respondents haven’t used VR, two reasons stood
out: they view it as expensive (42%) or don’t feel the
need to use it (62%). That latter statistic dovetails
with AR, which once again signals that the onus is on
companies to apply VR to the correct applications to
But the opportunities are there, even if this is still
an emerging technology. Our data (see Figure 3)
indicates that the respondents who use VR do so
similarly to AR; but the intriguing number lies in
the 71% who would be very or somewhat
comfortable making a purchase, and 50% of that
“very comfortable” number are between the ages
of 27 and 37.
Along with pairing the tech with the right product or
service, companies who would like to move into this
space need to think about cost feasibility. However,
with younger consumers more open to adoption,
companies need to think three to five years ahead. If VR tracks like chat has, it can be a valuable—and
Respondents who are very or somewhat comfortable completing a full transaction or experience in VR
If Businesses Build It, Gen Z Will Probably Come
While we’ve focused on specific technologies up until this point, our last section locks in on a
specific consumer segment. With increasing buying
power, Gen Z is quickly becoming a critical target
market for companies, especially in relation to the
As noted in Figure 4, this younger consumer block is
more likely to utilize chat, AR, and VR (and these Gen
Zers are most likely to be interested in the Metaverse,
too). These insights, combined with the knowledge
that Gen Z is motivated to purchase from social
media influencers, paint a clear picture that this is a
generation living more and more online.
Last year, Sara Wilson of Harvard Business Review
noted that younger audiences were shifting to
more intimate online platforms, which she dubbed
“digital campfires.” These tiny communities enjoy participating in shared experiences online.
Though many of these campfires are focused around
games or gaming platforms, the concept serves as a playbook for companies that want to attract this audience.
As the article notes, some brands are using gamified
approaches on popular platforms like Discord and
Switch; the NBA’s Sacramento Kings on the former,
and Pizza Hut on the latter. Tapping into these
audiences will take creativity and foresight. But if
companies only remain content with leveraging
established technologies, it’s obvious they’ll be
missing out on a significant demographic.
Gen Z survey highlights
The younger the consumer, the more
likely they are to be motivated by product
recommendations from people they know
and from social media influencers
78% of Gen Zers believe live chat makes a
company more accessible, higher than any
other age group
18 - to 26- year-olds represent the age
group that has used AR the most
Ages 18–37 are most likely to own a VR
Younger consumers are most likely to be
interested in the Metaverse
As Adoption Trends Upward, Companies Stand at a Crossroads
Much like in the investment world, past performance
doesn’t guarantee future results. But studying the trends in consumer behavior can give us a
roadmap to prepare for the next generation of
consumer innovation. Consumers continue to adopt
technologies for a variety of reasons, and these
reasons have proven powerful enough to shift brand
loyalties. If adoption numbers continue to trend
upward, more and more emerging technologies will
eventually become established ones. And ambitious
companies—the ones who stay the innovation
course—will win hearts and minds, and subsequently,
wallets, once this mainstream acceptance occurs.
Vinnie is a Principal at CapTech and plays a large role in helping define services,
forge partnerships, and lead innovation for our clients. As a thought leader, he
regularly helps clients solve their most complex business challenges.
Principal, CX Practice Area Lead
Bree leads our Customer Experience practice, creating digital strategies and solutions using modern technologies to deliver meaningful and measurable experiences for our customers. She has served as a Creative Director for many omnichannel experiences within the retail space, as well as for a number of other industries that CapTech serves.