The eCommerce industry has been growing at an unprecedented pace in recent years, and this trend is set to continue in 2023. With advancements in technology and a shift in consumer behavior, the eCommerce landscape is constantly evolving. In this blog, we will explore the trends that are likely to shape the future of eCommerce in 2023.
The global e-commerce market was valued at US $16.6 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowing down. Market specialists expect a compound annual growth rate (CAGR) of 27.43% from 2023 to 2028, which would take the e-com market to close to US $50 trillion. Experts are often wrong about the details but it’s hard to disagree that e-com will grow even more. With advancements in technology and a shift in consumer behavior, the eCommerce landscape is constantly evolving. In this blog, we will explore the trends that are likely to shape the future of eCommerce in 2023.
1. Mobile Commerce Will Continue to Grow
The importance of mobile devices in eCommerce is no secret, and this trend will continue to gain momentum in 2023. Consumers are increasingly using their smartphones and tablets to shop online, and mobile commerce is projected to make to huge profits in 2023. Shopify believes that Mobile commerce is fast becoming consumers’ preferred shopping channel. Some businesses have made mobile their sole focus while others have added mobile to their omnichannel strategy and focus on ensuring a seamless shopping experience for their customers.
So, what can you as a merchant do?
- Streamline the checkout process: The checkout process can be a significant source of friction for mobile users. By simplifying the checkout process and removing unnecessary steps, businesses can make it easier for customers to complete their purchases. Keep in mind that changing your checkout has positive implications like less friction for
your users but may also have drawbacks like higher potential for frauds and chargebacks. Despite the negatives, many merchants are actively working on the checkout process to make it more convenient for customers. Let us see how:
- Simplify the checkout process: Remove unnecessary steps and fields to make it easier and faster for customers to complete their purchases. For example, instead of asking for a separate billing and shipping address, businesses can provide an option to use the same address for both.
- Implement one-click checkout: One-click checkout allows customers to complete their purchases with a single click, eliminating the need to re-enter their information. This is especially useful for repeat.
- Offering guest checkout: This option allows customers to complete their purchase without having to create an account, which can save time and reduce friction.
Allbirds has streamlined their checkout process by implementing a one-page checkout that only asks for essential information. An Express checkout which includes Amazon Pay and PayPal, Shop Pay or credit card options to make the checkout process faster and more convenient.
- Personalize the shopping experience: In 2023, the personalization trend continues to grow. Personalizing the shopping experience for customers is becoming increasingly important for merchants to differentiate themselves from competitors and improve customer loyalty. By using data and technology, merchants can create a customized shopping experience that is tailored to the unique preferences and needs of each individual customer. Many brands are using tools like style quizzes, search filters, custom-size charts, as tools to personalize the customer experience and journey. Aside from improving CX, it also helps in highlighting the right products to the right customers, shaves friction, encourage upsell and can reduce the likelihood of returns.
Shopify Merchant and lingerie e-tailer, ThirdLove offer personalized product recommendations to their customers based on a fit quiz that customers take before making a purchase. This allows ThirdLove to recommend products that are tailored to the customer's unique size and style preferences. While not entirely about personalization, we loved reading about how ThirdLove focused on fit and changed the way that lingerie is sold today. In case you are interested, click here.
- Consider whether you should add a mobile app or a PWA to your store
Larger retailers in 2023 examining dedicated mobile applications or PWA’s to give their customer a better shopping experience on mobile and optimized for speed and performance. There are many mobile app builders that can help you create a mobile app. However not many know about PWAs. A PWA is a web application that offers many of the benefits of mobile apps without the upfront cost and time to develop. It can be installed on a user's home screen giving an app like experience and offline functionality, push notifications and app-like experiences. It allows users to install the app from your website without going to an app store.
Both options have their benefits and drawbacks, so it's important for merchants to carefully consider which option is right for their business. While mobile apps may offer a more mobile native experience, they can also be expensive to develop and require customers to download a new app. PWAs, on the other hand, are more accessible and cost-effective, but may not offer the same level of functionality as a mobile app.
2. Sustainability will be a key focus
As consumers become increasingly aware of the impact of their purchasing decisions on the environment, eCommerce businesses may need to prioritize sustainability in their operations. By doing so, businesses can attract customers who value sustainability and demonstrate their commitment to social responsibility. This may not fit all businesses and all consumers but there is no denying that customers who value sustainability and demonstrate their commitment to social responsibility are on the rise. The most impact can be seen by stores and brands that focus on sustainability as a brand value and who integrate their focus on sustainability into all parts of their business.
In the e-commerce sector, merchants are exploring a range of strategies to become more sustainable. This may include:
- Using eco-friendly materials: Merchants are increasingly using sustainable materials in their products, such as recycled plastics, organic cotton, and sustainable wood.
- Partnering with sustainable suppliers: Merchants are partnering with suppliers who prioritize sustainability and environmental responsibility in their operations.
Example: Patagonia is a leader in sustainable eCommerce. The company uses organic and recycled materials in its products, and it actively supports environmental causes through its activism program. Patagonia's commitment to sustainability has helped to build a loyal customer base that shares the company's values.
Many Shopify merchants have begun focusing on sustainability as a key part of their business strategy. A survey conducted by Shopify found that nearly 50% of consumers globally are choosing to buy from brands with a clear commitment to sustainability. Many customers are happy to invest in sustainable retailers, but going green is about more than just conserving energy or using longer-lasting light bulbs. Sustainability gives you an opportunity to better connect with your customers, and while having a zero net energy store might not be within grasp just yet, there are smaller steps you can take. Here are a few names of some ecommerce businesses on Shopify taking sustainability seriously: Know Your Origin, By Humankind, A Good Company, Unwrapped Life, Pela Case sells compostable cases for phones and AirPods, and the brand’s site boasts that the production of its products produces 30% fewer carbon emissions and uses 34% less water than conventional cases and Pangaia takes sustainability seriously. The activewear brand considers its impact throughout the entire supply chain of its comfy activewear line, from using innovative materials like recycled cotton.
3. Efficiency and automation will be a new focus
In an uncertain economic environment, most merchants are already thinking on how to control costs and do more with less. Renegotiating with suppliers, focusing on campaign RoIs, cutting unnecessary expenses and looking to automate or use technology or AI to reduce workloads are all on the rise. AI copywriters like Jasper and Copy, have been growing rapidly and bringing savings to merchants for a while but ChatGPT seems to have forever changed the trajectory of the use of AI. AI can now be used for all kinds of tasks, from writing blogs, generating product descriptions, images and even videos. This is a substantial saving in time and money.
Another tool we see growing is chatbots (expected to be a billion dollar industry soon). Imagine having an employee in your team who is available 24/7, never complains, and will do all the repetitive customer service tasks that your other team members may not like. While the intelligence of chatbots is still not ready to replace humans, we see merchants using them to automate replies to basic questions while escalating the more complex questions to humans. They also allow you to offer multilingual support, 24/7 support, can prevent and help recover abandoned carts, integrate on to social media and other channels.
4. Subscription-based models will continue to gain popularity.
Subscription-based models are not new to the eCommerce industry, but their popularity has skyrocketed in recent years. In fact, the global subscription e-commerce market size, according to Forbes, is expected to increase from $72.91 billion in 2021 to $120.04 billion in 2022 (and it is expected to reach $904.2 billion by 2026). For merchants, it provides a predictable stream of revenue and helps to build a loyal customer base but does come with more logistical complexity and lower margins (perhaps). For customers, it provides convenience and can often result in cost savings. There are several subscription apps available on the Shopify App Store that allow merchants to create and manage subscriptions.
Subscriptions are better suited for products that are consumed periodically. Switching to a subscription based model is not an easy decision. However, merchants should consider a hybrid approach where you offer the product on an outright sale basis and on a subscription sale. Successful businesses like Birchbox, and Harry's have found success with subscription-based models, providing convenience and cost savings for customers while building loyal customer bases and predictable revenue streams for merchants. Four Sigmatic is a brand that has switched to a hybrid option of selling outright or through subscriptions.
In conclusion, e-commerce is rapidly evolving, and new trends are emerging that will shape the industry in the years to come. Customizing mobile commerce, growth in PWAs or Mobile app, personalization, automation and efficiency and subscription-based models are a few points that have become increasingly important in 2023 . By adopting these emerging trends and leveraging new technologies, merchants can create more engaging and personalized shopping experiences for their customers and drive growth in the e-commerce industry.