2022 has proven that since the pandemic, in-store shopping has not “become a thing of the past.” Shoppers are back to shopping in stores and online, and consumer expectations are higher than ever. Amazon has made it standard to want free shipping, marketplaces have made it easy to find a different retailer with the item we want in stock, and social media has helped us find items we didn’t even know we needed – and could buy right through an ad.
According to Statisca, while we’re seeing total retail sales growth slowing, ecommerce continues to grow as a percentage of total retail sales worldwide. By the end of 2023, 1 out of 5 retail sales will be online. This is great news right?
It is, as long as brands keep up with consumer expectations and shopping behaviors. Online shoppers more than ever are seeking experiences that bring their offline and online shopping experiences together, with marketing that can reach them through any channel – social media, marketplaces, print, website, in-store, digital ads, email, SMS, chat, and more. That sounds like the prediction of every year… becoming more omnichannel.
2023 requires brands to be agile, as we embark on another year of uncertainty in our global economy.
Over the last two years, we saw CQL’s predicted trend of “Replatform and platform migrations” accelerate, as retailers looked to new technologies to cut high tech costs and reduce reliance on development, to focus time and budget on marketing and customer experience.
This year, consumers have more shopping options than ever and brands have high standards to provide a personalized end-to-end shopping journey anytime, anywhere.
And if brands aren’t ready for that?
Insider Intelligence shows that more than 70% of consumers bought from a competitor of a go-to brand from May 2021-May 2022. That’s huge – and eye opening! Even loyal shoppers have more options, setting high expectations for brands to offer competitive prices, loyalty programs, excellent customer service (in a variety of mediums), fast and free shipping, in-stock merchandise, personalization, sustainability, environmental friendliness, and more.
So what are the top 5 trends we’ll see in 2023? Here are my predictions:
- Customer Experience
This goes hand-in-hand with “omnichannel” experience. Ultimately, if you are creating a top-notch customer experience, it will be omnichannel. This is the one trend that comes back each year, as customer expectations are high, shopping options are unlimited, and technology continues to change.
Just think, there is always a new feature – BOPIS, social selling, AI tools like virtual fitting rooms, additional payment options, subscriptions, chatbots – that can be added to make the shopper experience even easier and more seamless. Customers will expect good customer service, easy returns, fast and free shipping, in-stock items, accounts that reflect online and in-store activity, ease of ordering from any channel or marketplace, and even sustainability from your brand. Implementing all of these customer experiences is the challenge, and the closer you get… the more technology changes again!
Following the pandemic, the Russia-Ukraine war created increased sanctions that further impacted trade. In 2022, we reached the highest inflation in 40 years. While inflation will decline, we’re still going to be faced with inflated prices in 2023, with a looming recession and high interest rates. We expect retailers will be careful in their investments and shoppers will be mindful about their spending due to financial uncertainty in the year ahead. This puts extra pressure on the mid-tier brands that aren’t low-cost/value based or high end luxury.
Note: It’s critical to be looking carefully at revenue and AOV, as these key metrics are inflated by rising prices (it doesn’t mean you’re selling more or business is better). Be sure to look at average orders per customer, average items per order, and other key metrics that focus on customer engagement.
- Growth of B2B & Resale
Two markets that we expect to see large increases in are B2B and resale.
B2B: Statista states that in 2023, an estimated 17% of B2B sales (1.8 trillion in North America) are expected to be generated digitally. Sana Commerce shows that 57% of B2B buyers purchase their products online. There is a lot of opportunity in 2023, and we are seeing many platform providers working to claim their market share in this space, with B2B and headless solutions.
Resale: According to OfferUp, 94% of Americans say inflation impacts their decision to buy secondhand goods. In an effort to save the planet and some money, we will see resale markets continue to expand with marketplace sites and companies like threadUP, Poshmark, Goodwill. Insider Intelligence predicts US fashion digital resale marketplace sales will hit nearly $20 billion this year and continue to grow by double digits through 2025.
- More Robust Supply Chains
Retailers will need to continue to transform their supply chains, as they have the past two years as a result of the pandemic and the Russia-Ukraine war. Slow and inconsistent supply chains will break brands and cause consumers to look at numerous other online options. Customer experience is driving retailers to ensure products fulfill on time, arrive on time, communicate delays, keep costs low, and make returns easy. The fact that 70% of consumers bought from a competitor in the last year makes this a key focus for retailers in 2023.
- Social Media Becomes Pivotal
According to The Future of Commerce, 97% of Gen Zers use social media as their top source of social inspiration. In 2023, TikTok will add nearly 10 million social buyers, nearly two times the combined increase for Facebook, Instagram, and Pinterest! Ensuring social media is tied to your customer experience is critical to capturing the attention of this mobile-first market, as well as offering buying options that facilitate fast purchases will open up new revenue streams. Marketing Dive confirms this saying 9 out of 10 people buy from brands they follow on social media. That’s a big opportunity.
There are many more trends we’ll see in 2023, but these will top the charts and lead to big risk/big reward for retailers. For other great 2023 predictions, please visit our partner reports at:
Happy New Year!