While we’ve all seen the shift happening, nothing catalyzed the world of e-commerce and e-commerce trends quite like the COVID-19 pandemic. Between social distancing keeping people home and stores closed, and manufacturers switching production from consumer goods to PPE, the world saw an unprecedented switch from in-person, physical shopping to online shopping across every industry.
With the world returning to a more normal pace, many expected the business and shopping landscape to shift back to a largely physical shopping model–but that just hasn’t happened. While in-person shopping is up compared to the height of COVID shutdowns, it is clear that e-commerce is here to stay.
With this in mind, we’ll cover some of the most critical e-commerce trends to pay attention to in 2023 to help set your brand up for success for years to come.
The Evolution of E-Commerce
While the COVID-19 pandemic may have been the most significant impetus to jump-starting many of the changes in the business landscape that we’re seeing today, the pandemic has largely faded from public view. However, the change it effected on our way of digital business persists with no signs of stopping.
In many ways, some of the changes were to the underlying business culture itself, forever changing the way many organizations needed to operate and scale themselves. The direct to consumer e-commerce spike of the pandemic followed by the rebound back to “normal” levels in 2022 had many speculating that the industry or sector as a whole was in decline. But the core of e-commerce–the drive, fluidity, and innovation that made it viable in the first place–remain alive and well.
Now businesses are focusing on bringing their unique branding and customer solutions to the various channels in which they operate, and pushing to leverage existing relationships offline and on to improve conversions.
The biggest overall challenge for all businesses in the coming years is going to be keeping up with the constant, rapid digitalization of the business landscape, and ensuring that they are giving the customer an experience they can’t get anywhere else. That is what’s going to drive sales, conversions, and ultimately, customer loyalty.
What to Expect in E-Commerce in 2023
One of the biggest themes for e-commerce in 2023 is going to be that of the metaverse, and the omnichannel approach that the most successful companies are taking that will position them to be at the forefront of customer visibility and access.
There is also going to be an increased reliance on customers getting what they want, when they want it, finding it in the metaverse, and using AI frameworks to make it all happen.
What’s Changing?
With the influence of inflation and other economic turbulence, fintech products and services are going to become even more popular in 2023 and beyond. People are going to want to hedge against economic disruption, inflation, and loss of value in other investments.
Artificial intelligence will also be gaining a ton of influence in the coming year or two. More consumers are using AI and digital assistant technology like Alexa and Siri to research and purchase products, which is creating a new search platform for marketers to target.
AI is also changing the way that many small businesses operate daily, as having complex neural nets implemented in things like scheduling software, product sourcing, and shipping logistics reshape the business world.
What’s Staying the Same?
One of the things that are going to stay the same from recent years is the customer base is still searching for the best ways to remain connected online, as many businesses continue to operate with a remote or hybrid team structure. This means that people are still leaning heavily on virtual meetings and are going to want the continued convenience of digital workspaces, digital shopping, and digital everything. More improvements to remote work platforms and similar infrastructure will be likely.
Another important piece of the e-commerce puzzle that is staying the same is the customer’s increased drive to find products and services that are highly personalized and tailored to them as individuals. The tendency for people to connect more deeply with a brand when it creates an emotional bond is powerful, and it can lead to lifelong customers and social content that can help your marketing reach the next level.
Top 10 E-Commerce Trends for 2023
The biggest trends in e-commerce for 2023 are going to revolve a great deal around cutting costs and streamlining operations to make them more resilient overall to changing economic climates. The biggest challenge for many organizations, however, is going to be managing this cost-cutting and streamlining while still providing the highly personalized, individual-level service that many consumers demand from their shopping experience.
1. Cost Cutting + Financial Driven Investing Rise as Consumer Spending Slows Post-Pandemic
One of the biggest trends, challenges, and overall best practices for 2023 and beyond will be ensuring marketing dollars are only flowing to the projects and campaigns with leading ROI (return on investment), CAC (customer acquisition cost), or ACoS (advertising cost of sales) metrics. Spending crucial advertising dollars on projects that aren’t going to provide the optimal return is wasting money and time–both of which have a huge influence on a brand’s success as e-commerce industry growth slows to single-digits.
Not only is it vital that advertising and marketing be driven by sound decision-making, but other departments are as well. The business’s overall goal is improved profitability, and if a decision doesn’t ultimately help drive the organization to that goal, it’s not a prudent decision. Being able to monitor and analyze data effectively can help drive more informed and effective decisions in an organization. This continuous improvement is going to be a consistent need by nearly every organization that hopes to stay viable in the coming years.
2. Brands Continue to Face Inventory Challenges
Countless retailers, both large and small, are facing a variety of inventory challenges. This all started with the initial supply chain shortages during the pandemic, but now it’s continuing with major macro shortages that are borne out of the natural response of the Fed to try and stop inflation with rate hikes.
The demand has rebounded, and now that it’s lower than it has been for quite some time, the surplus inventory is creating the opposite problem for many organizations. Brands are stuck with full shelves and warehouses, and are paying additional fees for warehousing, storage, transport, and more because inventory isn’t moving as fast as it was projected to before the supply chain problems were alleviated. It also doesn’t help that truck drivers, train companies, and other transport options continue to deal with workers threatening to or actually going on strike.
Many e-commerce trends will revolve around managing this inventory, or avoiding managing inventory entirely, such as dropshipping, FBA, or retail arbitrage. Dropshipping can get products directly from a manufacturer or supplier to your customer, and FBA lets one of the planet’s largest e-commerce platforms handle the warehousing and shipping for your products, widening your profit margins considerably.
3. Companies Prioritize Customer Retention through Repeat Purchases + Loyalty Programs
Winning new customers can take a lot of time and money. Businesses are cutting the time and expense of creating new buyers by focusing efforts and advertising dollars on re-marketing campaigns, customer retention, and up-sell opportunities.
One of the increasingly popular ways to do this is through a subscription model, where brands incentivize customers to authorize regular repeat purchases that are automatically billed and fulfilled on a set schedule. In addition to the predictable sales and brand loyalty, the subscription model creates an opportunity for brands to connect more meaningfully with their customers and cultivate an emotional bond. These customers will not only remain loyal but will often actively work to bring other customers over to your brand from competitors.
4. DTC Will Continue to be a Core E-Commerce Channel
The DTC and omnichannel wholesale integration will likely remain a critical focus for most businesses. The most successful organizations will end up taking a very holistic stance regarding performance assessment.
This means prioritizing first-purchase metrics, as well as favorable LTV:CAC metrics.
It also necessitates integrating knowledge of how the spending associated with DTC campaigns will impact non-DTC operations, like retail or wholesale operations. This diversification is going to be a key component in deciding the success of pivoting organizations.
5. Creators + Social Commerce Drive E-Commerce Performance
The creator economy is here and there is no going back. The entire universe of self-minted, self-published, or self-created content is growing at a record pace, and this is forcing massive ripples in advertising and more.
Companies have far more opportunities to get their content in front of niche audiences, but they can do it with such a personalized and seemingly close connection that it drives big conversion results.
The creator or influencer economy is especially valuable to brands in this era of increased data privacy and protection, as consumers increasingly decline or reject cookies and data tracking. Partnering with influencers and creators who have cultivated niche audiences is one of the few remaining ways to reliably target a group of people with specific interests.
6. Short Form Video Content and Placement Specific Creative Continues to be a Key Variable
“As the world of e-commerce evolves, the importance of providing engaging product representation only grows. Static photos of products aren’t enough anymore. Before committing to a purchase, consumers increasingly seem to want to explore a product in-depth. Providing videos, reviews and interactive content about a product can make it more marketable in the online world.”
Forbes Advisor, “2023 E-Commerce Trends”
Video is going to continue to be the most-consumed media type across all platforms. Additionally, as streaming platforms like Twitch gain wider use, video and streamed content across multiple platforms is going to become more popular in the coming years.
Twitch, TikTok, Instagram Reels, YouTube Shorts, Snapchat, and more offer countless opportunities for effective short-form video content. This includes opportunities for optimized in-platform/in-video ad placement, allowing consumers to click through and easily make a purchase without ever leaving their preferred platform.
7. Meta + Google Will Continue to be Core Channels, but Brands Will Also Continue To Diversify
Consumers are still in a very instant-gratification frame of mind when shopping on digital platforms. This means that companies that provide optimized, clickable ads on channels that invite impulsive activity (like TikTok and Snapchat) will see high conversion rates, as they capitalize on impulse shopping.
The big takeaway is diversification: Even when your brand seems to have a niche well-occupied, continue to work on expanding and finding new and profitable audience pools. Market changes are inevitable, and brands that want to be successful long-term never keep all their eggs in one basket.
8. First + Zero Party Data Become Increasingly Important
With the changes to consumer privacy laws that seem to happen each year, it’s getting harder and harder for companies to get the tracking data they once received from customers.
This is why the growth of, and increasing reliance on, first and zero-party data is going to be a big subject in 2023. Zero-party data is data the customer proactively and specifically shares with a company, while first-party data is data gleaned by a company directly from customer activity.
9. Cross-Channel Tracking and Attribution Continue to Increase in Importance
With the explosion in mobile device ordering, voice search and ordering, and shopping across all channels, being able to properly track and measure operations is essential. Google Analytics 4 was created to solve this data-tracking hurdle, allowing brands to track continued consumer activity across multiple platforms and devices, analyze detailed visitor behavior through events, and better gauge conversions and performance.
If your company hasn’t yet migrated to GA4, it’s important to note halfway through 2023 Universal Analytics will stop tracking data, and you’ll lose precious data insight. Click here to learn more about transitioning to Google Analytics 4.
10. Business Values + Environmental Impact Increasingly Impact Consumer Spending
As customer retention becomes a major focus for brands everywhere, companies are feeling the pressure to tap into the values of the communities they serve. More than ever before, consumers want to know what a brand values, how they impact their employees and the community around them, and how their business impacts the environment before making a purchase.
In this age of information, companies can no longer get away with “greenwashing” and similar practices around employee treatment and social impact. Practicing responsible environmental stewardship, supporting diversity, equity and inclusion, and bettering the communities around your business are going to be an increasingly important factor in 2023 and beyond as consumers use those matters as deciding factors before making a purchase.
E-Commerce Trends FAQs
Now that you know what some of the biggest and most influential trends are going to be in 2023, we’re going to take a little time to answer some of the most common questions we’re seeing related to e-Commerce.
What are the future trends of e-commerce?
The biggest trends that are going to be pushed in the coming years are the ever-expanding service-anywhere framework that creates a point of sale anywhere the customer might be standing with their mobile device, expansion across all social media platforms to capture niche audiences, and the massive drive to improve sustainability and environmentally-friendly business and manufacturing processes.
Is e-commerce still worth it in 2023?
E-commerce is just as viable in 2023 as it’s always been, if not more so. With increased offerings and ways to leverage automation, such as Amazon automation and FBA framework, Shopify drop-shipping and private label items, and even retail arbitrage, there are countless ways that someone can still break into e-commerce in 2023.
What products will be trending in 2023?
The most popular products in 2023 are going to continue to be mobile computing and personal digital tech. Smartphones are evolving faster than almost any other field of consumer tech out there, and that means that more companies are going to get involved and innovation is going to speed up even further.
What will be the share of e-commerce in the world in 2024?
Even though some consumers are happy to be able to start shopping at brick-and-mortar establishments again, that doesn’t mean e-commerce is going to slow down. In fact, over the next 2-3 years, e-commerce retail sales will fill the gap from $5T to more than $8T.
Set Your Brand Up for Success in 2023
While direct to consumer e-commerce is no longer at pandemic-level heights, it is still a healthy, growing industry, and well worth pursuing. To set your e-commerce brand up for success, focus on creating a great customer experience, keeping up with e-commerce trends, and maintaining a conservative fiscal approach.
At Markacy, we create and maintain our strategic, targeted marketing services with your brand’s bottom line as the most important factor. To see samples of our work, view our case studies and creative portfolio.
If you’re ready to work with a marketing agency that’s just as focused on your bottom line as you are, contact us today to learn more about how our finance-based marketing services can elevate your brand to the next level.
