Customer Engagement Solutions Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The customer engagement solutions market is segmented by Component (Solution and Service), Deployment Type (Cloud and On-premise), Organization Size (Large Enterprise and Small & Medium-sized Enterprise), End-user Industry, and Geography.

Market Snapshot

Customer Engagement Solutions Market Size
Study Period: 2018 - 2026
Base Year: 2021
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 12.65 %

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Market Overview

The customer engagement solutions market was valued at USD 15.52 billion in 2020, and it is expected to reach USD 30.92 billion by 2026, with a CAGR of 12.65%, during the forecast period (2021 - 2026). According to Aspects Software's report, in 2018, 44% of consumers stopped doing business with a company due to bad service, which is a decrease as compared to 54% of consumers in 2017.

  • With the increasing smartphone and internet usage, customers can easily access information about different products and services across multiple channels, like the web, social media, and other applications. With an average time spent on mobile phones reaching around 5 hours per day and the availability of multiple customer touchpoints, like websites, social media, live chats, phone calls, apart from the in-person assistance, brands find ample opportunity to engage customers with their brand and generate more revenues.
  • Customer service is the main reason that empowers customers to exhibit brand loyalty, thus bringing continuous revenues to organizations across industries. As per the Aspects Software report, 66% of consumers did more business with at least one company because of good customer service. Moreover, in 2018, 56% of consumers used AI for their customer service interactions at least once a week.
  • Customer engagement software helps to manage customer communications and interactions throughout a variety of channels and touchpoints. For instance, the watchmaker, Titan Company, has adopted the IBM Watson Customer Engagement solution to design its marketing campaigns, targeted at individual customers.
  • Vendors in the market are offering individual solutions for each of the functionalities mentioned above and also a unified solution that addresses the customer engagement needs of an enterprise. For instance, Calabrio, a US-based customer engagement platform provider’s flagship offering, Calabrio ONE, is a unified workforce optimization (WFO) and employee engagement suite. The suite includes call recording feature, quality and workforce management, analytics based on voice-of-the-customer, and advanced-reporting capabilities.
  • In addition to the cloud-based solutions, the integration of AI is another trend that is becoming a standard offering by the vendors in the market. According to Pegasystems, a prominent vendor in the market, in 2018, 67% of customer experience leaders that embraced AI believed that it is not only a tool to make the customer experience more efficient, but also to create more meaningful relationships with consumers. However, Data security and privacy issues can hinder the growth of the customer engagement solutions market.

Scope of the Report

Customer engagement solutions are various customer engagement software that encompasses the full span of customer interactions, guiding current and potential customers through their journey.  It provides more than the right information to the right person at the right time, every time it consistently delivers value to the customer. Customer engagement software is broadly defined as software that manages customer communications and interactions throughout a variety of channels and touchpoints. Customer engagement software covers CRM systems, web chat, social media, marketing personalization, and customer self-service.

By Component
Omni Channel
Workforce Optimization
Others (Robotic Process Optimization, Self Service)
Managed Services
Professional Services
By Deployment Type
By Organization Size
Small and Medium Enterprises
Large Enterprises
By End-user Industry
Banking, Financial Services, and Insurance
Telecom and IT
Retail and Consumer Goods
Media and Entertainment
Other End-user Industries
North America
United States
United Kingdom
Rest of Europe
Rest of Asia-Pacific
Latin America
Rest of Latin America
Middle East & Africa
United Arab Emirates
Saudi Arabia
Rest of Middle-East & Africa

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Key Market Trends

Retail and Consumer Goods Industry Have the Significant Market Share

  • The retail industry was valued at USD 24.69 billion in 2018 and is estimated to register a CAGR of 7.24% over the forecast period. New players are emerging amid the longstanding established players in the retail market to leverage market growth.
  • New players are adopting e-commerce business model to benefit from the increasing smartphone usage. With e-commerce giants, like Amazon, making USD 71.84 billion in online sales, the brick and mortar retail giants, like Walmart, Macy’s, among others, are struggling to keep up. A few of the brick-and-mortar retailers are cutting store locations and focusing on a smaller number of stores for efficiency and flexibility, to sustain the competition. These retailers are also adopting the online business platform for new revenue streams and to create an omnichannel presence.
  • According to the study by Aspect Software, retail is among the top industries to have high customer churn rate, with the main reason for brand switching being poor customer experience. In such a competitive retail market, the need for new customer acquisition and retention of the existing customers become crucial for the retailers.
  • The growing number of use cases among the vendors in the market, which include furniture makers, to big-box retailers, indicate the significant market share of retail in the customer engagement solutions market.
Customer Engagement Solutions Market Trends

North America Holds the Largest Share in Customer Engagement Solutions Market

  • The North American region is projected to experience the largest growth in demand, during the forecast period (2019-2024), due to the early adoption of cloud-based technologies and IoT by the United States. However, benefits, such as improved agility and flexibility as well as being able to deploy new applications, also hold significance.
  • Additionally, the market for the Customer Engagement Solutions in North America is predominantly driven by the presence of market leaders, such as IBM Corporation, Microsoft Corporation, Nuance Communications, Oracle Corporation, and Inc.
  • Customer engagement solutions have gained universal acceptance in the United States, as the country was an early adopter of Social, Mobile, Analytics, and Cloud (SMAC) technologies. There have been a series of collaborations and mergers and acquisitions in North America to take advantage of this opportunity.
  • For instance, IBM Corporation has partnered with Performance Bicycle, the nation’s largest independent bicycle retailer, which is using Watson Customer Engagement solutions, running on the IBM Cloud, to help create personalized customer experiences that extend from online to each of its brick-and-mortar stores.
  • With these series of investments, communications, retail, healthcare, and manufacturing applications in North America are expected to witness a significant growth rate, over the forecast period.
Customer Engagement Solutions Industry Analysis

Competitive Landscape

The customer engagement solutions market is fragmented due to the market consists of various new and major vendors with a strong focus on the small and medium enterprises that compete in the large enterprise segment. Some of the major players are Avaya Inc., Aspect Software Inc., Calabrio Inc., Genesys, IBM Corporation, Verint Systems Inc, Nice Systems, Nuance Communications Inc., OpenText Corporation, Oracle Corporation, Pegasystems Inc., among others. 

  • June 2019 - Calabrio has acquired Teleopti, a workforce management software provider building the new global standard for the customer experience industry. The combination brings Teleopti’s workforce management (WFM) software together with Calabrio’s customer experience solutions to create the market-leading, true multi-tenant SaaS customer experience intelligence platform. Calabrio and Teleopti bring together customers from across the globe, including Best Buy, Rabobank, Shopify, Netflix, and GE Appliances, a Haier company.
  • May 2019 -  Verint Systems Inc. has launched the industry’s first comprehensive, enterprise-wide view of the voice of the customer, now a cornerstone of its expanding Voice of Customer (VoC) strategy. Tailored to serve the unique needs of CX leaders, Verint Unified VOC* provides a complete view of direct, indirect and inferred VoC from across key customer engagement channels with a powerful, automated analytics engine to deliver actionable insights. These insights empower organizations to prioritize and act upon the CX initiatives that deliver the most significant financial impact.

Table of Contents


    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Increasing Use of E-commerce and M-commerce Platforms

      2. 4.2.2 Increasing Focus on Delivering Enhanced Customer Engagement through Omnichannel

    3. 4.3 Market Restraints

      1. 4.3.1 Data Security and Privacy Concerns

    4. 4.4 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.4.1 Bargaining Power of Buyers/Consumers

      2. 4.4.2 Bargaining Power of Suppliers

      3. 4.4.3 Threat of New Entrants

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry


    1. 5.1 By Component

      1. 5.1.1 Solution

        1. Omni Channel

        2. Workforce Optimization

        3. Others (Robotic Process Optimization, Self Service)

      2. 5.1.2 Services

        1. Managed Services

        2. Professional Services

    2. 5.2 By Deployment Type

      1. 5.2.1 On-premise

      2. 5.2.2 Cloud

    3. 5.3 By Organization Size

      1. 5.3.1 Small and Medium Enterprises

      2. 5.3.2 Large Enterprises

    4. 5.4 By End-user Industry

      1. 5.4.1 Banking, Financial Services, and Insurance

      2. 5.4.2 Telecom and IT

      3. 5.4.3 Retail and Consumer Goods

      4. 5.4.4 Media and Entertainment

      5. 5.4.5 Other End-user Industries

    5. 5.5 Geography

      1. 5.5.1 North America

        1. United States

        2. Canada

      2. 5.5.2 Europe

        1. United Kingdom

        2. Germany

        3. France

        4. Rest of Europe

      3. 5.5.3 Asia-Pacific

        1. China

        2. India

        3. Japan

        4. Rest of Asia-Pacific

      4. 5.5.4 Latin America

        1. Mexico

        2. Brazil

        3. Rest of Latin America

      5. 5.5.5 Middle East & Africa

        1. United Arab Emirates

        2. Saudi Arabia

        3. Rest of Middle-East & Africa


    1. 6.1 Company Profiles

      1. 6.1.1 Avaya Inc.

      2. 6.1.2 Aspect Software Inc.

      3. 6.1.3 Calabrio Inc.

      4. 6.1.4 Genesys

      5. 6.1.5 IBM Corporation

      6. 6.1.6 Verint Systems Inc.

      7. 6.1.7 Nice Systems

      8. 6.1.8 Nuance Communications Inc.

      9. 6.1.9 OpenText Corporation

      10. 6.1.10 Oracle Corporation

      11. 6.1.11 Pegasystems Inc.

      12. 6.1.12 Inc.

      13. 6.1.13 SAP SE

    2. *List Not Exhaustive


**Subject to Availability

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Frequently Asked Questions

The Customer Engagement Solutions Market market is studied from 2018 - 2026.

The Customer Engagement Solutions Market is growing at a CAGR of 12.65% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

Aspect Software Inc., IBM Corporation, Oracle Corporation, Inc., Verint Systems Inc. are the major companies operating in Customer Engagement Solutions Market.

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