E-Commerce is always changing. Businesses have always been looking for new ways to meet customers where they are, and this fact only gains importance as users look for more and more convenience in their shopping experiences. While the future of E-Commerce is a wide topic, in this part 2 of the Basics of eCommerce series, we’re going to discuss the top 3 E-Commerce trends that will have a big impact on businesses in 2023, so you and your team can stay ahead of the competition and drive your brand forward.
We have identified these top 3 E-Commerce trends for 2023:
- Keeping customers satisfied with personalization becomes the norm
- Social commerce is on the rise
- Environmental topics have become more important than ever
1. Keeping customers satisfied with personalization becomes the norm
Did you know 80% of shoppers are more likely to buy from a company that offers a personalized experience? And, according to McKinsey and Company, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen.
Personalization is the process of tailoring the shopping experience and marketing communications to individual customers based on the information and data a brand has on them. This can be applied in many channels, including but not limited to websites, emails, mobile apps, social media, live chats or even in-store interactions. Some examples of how personalization could look in practice are:
- Product recommendations: based on recent data on purchase history, brands suggest additional products and services customers might be interested in purchasing.
- Personalized rewards: brands tailor rewards, including discounts, to each customer’s preferences and interests.
- Mobile apps: brands personalize content for mobile push notifications to provide personal product suggestions.
- Subscriptions: brands send out curated personal subscription packages.
By strategically implementing personalization, you and your brands can boost repeated purchases and improve brand engagement. These can ultimately lead to higher conversion rates, average order value and increased customer loyalty. Take a look at this case study on how Niteco helped boost Electrolux’s web conversion rate with personalization. By using users’ browsing behaviors and interests, Niteco was able to create a more personalized user experience for Electrolux’s website. The result was an upturn of +186% in web conversions for new users and +36.3% in web conversions for returning users. This led to an improved overall customer journey and higher engagement.
However, that’s only the surface of personalization, as there are more trends when it comes to this topic. Some of the personalization trends that are expected to grow in the future are:
- Headless personalization: With this type of personalization, you can separate your front-end (presentation layer) and back-end (content and data) systems, allowing you to be more flexible in creating personalized customer experience. With headless personalization, you can use customer data from your back-end to personalize the user experience on your front-end system.
- AI-driven personalization: It has been around for a few years, but this is still one of the most exciting personalization trends up to date. As AI-driven predictive personalization strategies are becoming ever more sophisticated, this trend is sure to have a more significant impact on eCommerce in the years ahead.
- More personalized mobile experience: As global consumer mobile spending is expected to reach $728 billion by 2025, mobile shopping is a great if not crucial way to tap into your brand’s growth potential. Some of the benefits that a personalized mobile experience brings are increased user retention, better overall customer experience, higher levels of engagement and conversion rates as well as enabling mobile in-app purchases.
However, despite its multiple types, personalization always starts with data collection. Aside from website traffic, some critical data collection points you can start with are on-site interactions, emails, personal data, paid media, purchases as well as search history.
Though companies that grow faster drive 40% more of their revenue from personalization than their slower growing counterparts, data security is also a concern that businesses cannot ignore. With 48% of consumers saying they appreciate the convenience of personalization as long as their data is secure, consumers nowadays are more aware of how brands use their personal data and how their data is tracked across different platforms and mobile apps. Therefore, while customers expect personalization, brands also need to be careful when it comes to retrieving and securing customers’ personal information.
2. Social commerce is on the rise
Some stats about social/mobile commerce:
- 79% of smartphone users have made a purchase using their mobile devices.
- Gen Z and millennials are most likely to have made at least one purchase via a social media channel.
- 75% of users use social media to research products.
Social commerce is a fancy term that describes the use of social media platforms to market and sell products or services. This type of commerce has been trending since it lets customers shop directly via a social media channel without having to leave the platform.
With 4.59 billion people, or 57% of the global population, currently using social media, using social networks is a no-brainer when it comes to getting more eyes on your brand.
With social commerce, your business can reach a larger target audience, provide a frictionless shopping experience, receive customer feedback, and gather data on your audience. On the other hand, shoppers can have a more interactive and convenient shopping experience as the time spent on product research and purchases is reduced. Some of the apps that currently have built-in native commerce features are Facebook, Instagram, TikTok and Pinterest.
According to an eMarketer survey, about 71% of global Facebook users purchase something on Facebook at least sometimes. In fact, this social network was the most popular social media platform when it comes to purchases made in 2021. On Facebook, a potential customer can view available products and their specifications and directly ask questions to brands without leaving the platform. Instagram is also a popular shopping platform as 44% of people use this channel to shop weekly. Some of their shopping features include shopping tags, shop tabs, and shopping through DMs.
TikTok, on the other hand, is the new kid on the block. This video-sharing platform is predicted to hit 48.8 million US users by 2025, beating Instagram’s 48.2 million. It’s also reported that 39% of users are reported to have discovered a product or brand on TikTok that they didn’t hear of before, and almost half of them have purchased something they saw on the app.
This rise in shopping via social media is in part due to the increase in the usage of mobile devices to access social media. Did you know 122.3 million Facebook users accessed the platform exclusively from their mobile phones in 2021? One advantage of this is fast browsing and fast transactions. As time is money, social media shopping is definitely a faster way to trade products and services online.
Since the global value of social commerce is expected to reach $2.9 trillion by 2026, improving the user experience for mobile/social media customers is a huge opportunity for businesses to tap into. There’s no better time to boost your E-Commerce sales via social apps than now.
3. Environmental topics have become more important than ever
Did you know 85% of the globe is willing to take action to combat environmental and sustainability issues? In 2020, shipping accounted for 11% of total CO2 emissions in the transportation sector worldwide, making it the 3rd largest pollution source. With the topics of climate change and sustainability having taken the spotlight for a few years now, consumers, especially millennials and Gen Z, are more conscious than ever about where they purchase and the impact it has on the environment.
However, who says that E-Commerce cannot be sustainable? In E-Commerce, concepts for sustainability can vary, from business models to packaging. Some companies have been trying hard to ensure that their vendors, partners, and suppliers uphold ethical standards for environmental protection and worker conditions. Germany has passed the Supply Chain Due Diligence Act that will enforce the implementation of “greener” supply chain practices, which is going to take effect from the beginning of 2023.
With 80% of customers considering the sustainability of the product or brand when making purchases, changing the way your business is conducted via an ethical supply chain is a crucial aspect for business operation in the years to come. Certainly, consumers want a greener shopping experience than what businesses can currently offer. If businesses want to boost competitiveness in the E-Commerce landscape, they have to adapt to this large-scale shift in customer preferences and behaviors.