Study: Engagement is the key to digital transformation

As consumers continue to overhaul their routines and businesses invest hundreds of billions of dollars in new digital systems, the transformation we’ve embarked on hums along, but it’s far from over.

To measure gains made and identify new areas of opportunity being created, PYMNTS’ Benchmarking The World’s Digital Transformation, The ConnectedEconomy™ Index Q1 2022, created in collaboration with Stripe, is a groundbreaking study of consumer engagement in 40 key activities and the 10 categories we call “pillars of the connected economy”.

Looking at data from over 15,100 respondents in 11 countries combined between January 13 and February 16, 2022, we conclude that while these countries generate 50% of global GDP and represent a bloc of 700 million consumers with smartphones and access to the web, their economies are still in the early stages of digital transformation.

Calculating an average CE Index score of 27.1 out of a possible 100 across the 11 countries, we found that “these countries are collectively just over a quarter of the way to complete digital transformation and a fully connected world”.

Considering engagement as a key indicator of digital shift, it is highest in digital-focused activities where tools and solutions are designed for the digital economy and not grafted onto legacy methods. For example, 61% and 56% of the population in the 11 countries surveyed engage in digital-centric activities, such as streaming entertainment, and 31% and 25%, respectively, do so daily.

This is also seen in mobile and online banking, where 59% of consumers in the 11 countries are engaging. Singapore, Spain and the UK stand out because “the availability of attractive mobile banking alternatives to physical banking – coupled with the widespread availability of smartphones – is driving both adoption and usage”, and higher CE index rankings.

Conversely, the use of services such as telehealth and online grocery subscriptions are seeing digital dual adoption, but still lag behind digital-first alternatives due to strong ties to the physical.

Table 1

Read the study: Benchmarking global digital transformation, The ConnectedEconomy™ Index Q1 2022

Pleasure, banking and communication dominate

People are drawn to fun and we’re seeing it in new data, with engagement currently highest in the “having fun” pillar of the connected economy and related activities.

Overall, 61% of respondents in the 11 countries surveyed “frequently go online for fun, especially to stream music and videos”, while 59% frequently use digital banking services.

Somewhat surprisingly, communication via social media and apps is less than 44%.

Digital demographics are also changing.

Benchmarking The World’s Digital Transformation notes that regions such as Singapore and Spain “see higher levels of digital engagement among all age groups, including baby boomers and seniors,” while in the United States In the United States and Japan, baby boomers and seniors “are significantly less digitally engaged in any of the 40 activities than Millennials and Gen Z.”

Index scores will increase as more people engage as each digital activity overlaps with another. These “inherent synergies” act as a powerful driver of engagement and transformation.

We found that for every 10% increase in the number of consumers using digital channels to engage socially, the CE Index score in these 11 countries could increase by 5.4%.

Figure 2

To see: Benchmarking global digital transformation, The ConnectedEconomy™ Index Q1 2022

Make transformation pay

Monetizing the opportunities created by digital transformation is a priority in all regions, although transactions need to become more attractive to consumers for this to happen.

“Consumers are 40% more engaged in digital activities that don’t involve a purchase,” the study reports, “like streaming videos and hanging out with friends on social media, than those that only involve transactions, such as shopping and paying bills.

A clear takeaway here is that in-app payments can unlock the business potential of high-engagement activities and make them less painful. Broadening the demographic appeal of digital will also be a big contributor, as we have found that the most digitally engaged nations are independent of age.

For example, “One of the reasons why Singapore’s progress is so much higher than that of other countries is that more of its baby boomers and Gen Xers are engaging in digital activities than those other countries in our study.

Similarly, 70% of highly digitally engaged people in the “store” (retail) pillar rank as highly digitally engaged in the “eat” pillar, showing how a pillar can be a driver for a other.

“For many categories, like buying highly regarded purchases like cars or jewelry or buying items that shoppers want to hand-pick, like groceries, today’s consumers prefer always a physical store experience,” the study says, adding “this will change over time.” as digital experiences and consumer confidence in those digital experiences improve.

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Get the study: Benchmarking global digital transformation, The ConnectedEconomy™ Index Q1 2022

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NEW PYMNTS DATA: THE FUTURE OF BUSINESS SUPPLIER INNOVATION STUDY – APRIL 2022

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On: While more than half of SMBs believe an all-in-one payment platform can save them time and improve cash flow visibility, 56% believe the solution could be difficult to integrate with AP systems and existing ARs. The Future Of Business Payables innovation report, a collaboration between PYMNTS and Plastiq, surveyed 500 SMBs with revenues between $500,000 and $100 million to explore how all-in-one solutions can exceed customer expectations. SMEs and help sustain their activities.

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