The Customer Experience Revolution: Spotting Winners in the CX Recovery

In an era where customer loyalty is eroding faster than ever, Forrester's 2025 CX Index reveals a stark divide between companies capitalizing on customer experience (CX) innovation and those clinging to outdated models. For investors, this report is a treasure map—highlighting undervalued brands poised to dominate as CX-driven recovery gains momentum, while warning against sectors in Asia Pacific (APAC) where neglect of customer-centric strategies is a liability. Let's dissect the trends and identify where to allocate capital.

CX as the New Competitive Moat

The global CX landscape is bifurcating. Forrester found that 21% of brands saw CX quality decline, while just 6% improved—a gap widening as customers grow skeptical of brands' promises. Yet, within this slump, pockets of excellence shine. Companies like Chewy (CHWY), HSBC (HSBC), and Zappos (ZZP) have not only maintained elite CX rankings but are outperforming peers by 15–20% in customer retention and wallet share growth. Their secret? A relentless focus on BX (Brand Experience), which Forrester now ties directly to revenue through its new Total Experience Score.

North America: The CX Elites to Watch

1. Chewy (CHWY): Pet Care's CX Pioneer
Chewy's repeat purchase rate of 92%—among the highest in retail—stems from its BX-driven loyalty. The company's “pet parents first” ethos is embedded in its 24/7 vet support, personalized recommendations, and same-day delivery. While its stock price has lagged due to market skepticism, shows a disconnect between valuation and fundamentals. A CX recovery could unlock its $10B revenue potential.

2. HSBC (HSBC): Banking's CX Comeback Kid
HSBC's Singapore branch, a rare APAC standout, improved its CX score by 18% since 2024. Its digital platform's AI-driven fraud alerts and personalized financial advice have reduced churn by 12%. Despite regional headwinds, HSBC's stock trades at a 30% discount to its peers, offering leverage if APAC's CX stagnation reverses.

3. Zappos (ZZP): The CX Culture Benchmark
Zappos' employee-first model (e.g., unlimited vacation, on-demand training) translates to a 25% premium in customer satisfaction scores over competitors. Investors should monitor as it expands into Europe.

Europe: Steady Gains in a Volatile World

While North America's CX quality declined across all three dimensions (effectiveness, ease, emotion), Europe's 7% improvement rate—led by banks like ING (INGA) and insurers like Allianz (AZSE)—hints at a more sustainable path. Key plays:

• ING (INGA): Its “no-fee” banking for small businesses and real-time fraud protection have boosted BX scores by 22% since 2024. A reveals its edge in customer trust.
• RBC Dominion Securities (RY.TO): Canada's elite CX brand, it uses AI to tailor retirement planning, driving a 30% higher customer acquisition rate than rivals.

APAC's CX Crisis: A Cautionary Tale

The Asia Pacific region's 37% brand decline rate—driven by weak employee engagement and poor tech adoption—should deter investors. Highlighted sectors to avoid:
- Australian Banking: The lowest CX scores since 2020, with only 2 out of 10 banks rated “good.”
- APAC Governments: All agencies in Forrester's study scored “poor” or worse, reflecting systemic neglect of public service innovation.
- Superannuation (Pension) Funds: Zero differentiation in CX, with top performers outscoring laggards by just 2.4 points—a warning for passive index funds.

Investment Strategy: CX as a Compass

1. Buy the CX Elites: Allocate to CHWY, HSBC (for its Singapore division), and ING, which are trading at valuation discounts despite superior metrics.
2. Avoid APAC Laggards: Steer clear of Australian banks (e.g., Westpac, CBA) and APAC insurers with low BX scores.
3. Monitor BX-CX Synergy: Brands like TD Wealth (TD.TO), with top BX scores, could outperform peers as the Total Experience Score gains traction.

Conclusion

The CX recovery is not a fad—it's a survival imperative. Investors who back brands with BX-CX alignment, employee-centric cultures, and tech-driven personalization will reap rewards as customer sentiment shifts from neutral to loyal. Meanwhile, APAC's CX underperformance is a red flag—a reminder that in the customer economy, neglecting experience is a guaranteed path to irrelevance.

Stay vigilant, and invest in the companies that truly listen.