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It’s a time of massive change in ecommerce.
From supply chains to consumer behavior to social marketing strategies, playbooks are being rewritten with each passing year.
The constant shifting makes it difficult to know what’s coming next. Yet as we make plans, tune forecasts and build budgets, it’s necessary to write down the near future as we see it. In the margins of today, it’s possible to see where things are heading.
To get a sense for what we should be paying attention to next year, we posed a question to ecommerce leaders:
What's a trend or tactic that will shape ecommerce in 2023?
The responses provide a look at the movement taking place in the architecture of ecommerce, how brands and retailers reach customers and where they are focusing in what is expected to be a challenging economic year.Below are the replies in full. Once you’re finished reading, check out our look back at 2022 trends that surprised and inspired.
Timely, personal communication has always been – and will remain – the core of a good customer experience. One thing we know is that the patience that customers once had for long queues, hold times and emails to support addresses no longer exists. They want to get useful updates, relevant offers and deals, and answers to questions right within a messaging app. 2023 will be the year the U.S. businesses finally catch up to the rest of the world and embrace the opportunity of business messaging. We expect to see this for both small businesses and large enterprises, as it helps brands meet their customers where they already are, while allowing customers to communicate on their schedule in the same seamless way they chat with friends and family. In the year ahead, people and businesses will find that there’s no better way to get business done than right in a chat. And that’s especially true for retail-based businesses that have a huge opportunity to reach customers throughout their buying journey. By providing quick and convenient ways to browse products, ask questions and learn about promotions, messaging is primed to help drive sales.
–Matt Idema, VP of Business Messaging, Meta
Fricitionless phygital experiences
We’ve seen the retail revolution gain a head of steam and there are no signs of it slowing down into the near year. Businesses must continue to meet the consumer where they want to be met from a shopping and fulfillment standpoint. In 2023, creating the seamless omnichannel, phygital experience for consumers will be more important than ever; but that is only possible when retailers and all links in the supply chain have an increased level of visibility. The frictionless phygital experience requires retailers and their partners across the supply chain to leverage data standards, where products and locations are identified consistently and shared in an automated way. When supply chain data is digitized and by utilizing technologies like RFID, online retailers can achieve improved, accurate inventory visibility and can see and sell what’s in stock, down to the last item, across all channels and locations. This level of visibility allows for the retailer to fulfill the order how the customer prefers – BOPIS, home delivery, etc.
–Melanie Nuce, SVP of Innovation & Partnerships, GS1 US
The broader adoption of digital wallets is exciting. We see implementations of Google Pay and Apple Pay more frequently, with safely stored credit card details and the ability to swap multiple cards at a time with a simple fingerprint verification. Amazon announced a Venmo integration in Q4 and Revolut has been expanding its business division heavily later in 2022. Tapping into convenient systems available by default for tens of millions of users can streamline the shopping process and increase brand authority at the same time.
–Mario Peshev, CEO, DevriX
Shopping goes social
Social shopping will explode in 2023, predicted to reach $1.2 trillion globally by 2025, growing around 2.5 times faster than traditional ecommerce. Most mainstream social platforms are growing their shop offerings. Instagram created a designated shopping tab; Facebook offers the ability to create native store pages for businesses; TikTok introduced live shopping capabilities and functionality for catalog integration. 65% of consumers said they use social media for purchase inspiration, and 61% said they shop from branded content posted on social media. These offerings will only become more seamless and frictionless, and the bridge between social connectivity and shopping will narrow in 2023. To leverage this trend, merchants should embrace an omnichannel approach to increase reach and multiply their customer acquisition opportunities.
–Oren Inditzky, Vice President of Online Stores, Wix
Looking ahead, there will be a significant opportunity for ecommerce sellers to bring their product closer to the moment of inspiration by putting it in more places customers will be looking, such as social media, marketplaces and their own websites. And with that, sellers should also focus on day-definite delivery over fast shipping in 2023.
We continue to see more retailers become marketplaces and curation via influencers grow in popularity. But there is still more ground to cover—AI is poised to supplant search in the coming years, while AR is likely to move discovery from the online world to the real world. Once they’ve connected the customer with their product, the goal of ecommerce sellers should not be to deliver as fast as possible, but to tailor the delivery experience to their customer’s schedule. In fact, 62% of consumers say an accurate estimated delivery date is more important than fast shipping (Pitney Bowes BOXpoll).
–Gregg Zegras, Executive Vice President and President, Global Ecommerce, Pitney Bowes
First, I believe we’re going to continue to see the number of ecommerce businesses grow as more people look to supplement their income amid rising inflation. In fact, according to our latest Intuit QuickBooks New Business Insights Report, nearly half (46%) of respondents say they plan to start an ecommerce business driven by the rising cost of living. This surge in sellers will simultaneously spur an uptick in direct-to-consumer selling, especially in verticals like beauty and accessories, as small businesses look to maximize profits by cutting out the intermediary. Overall, we’ll see more businesses continuing to experiment with omnichannel sales – looking to maximize profits by selling across a variety of platforms to meet consumers where they are – and even embracing new sales models like D2C mentioned above, and wholesale.
–Shilpa Reddy, VP of QuickBooks Commerce, Intuit QuickBooks
Applied generative AI
Some trends will accelerate, like maturation of retail media networks and the tools to help use them (Skai), and recommerce (Recurate). But I don't see a huge solve for the DTC CAC problem yet. Rather, marketers are going to have to become ambidextrous across many, many channels of retail.
This logic leads me to my personal favorite trend to watch for '23 – applied generative AI for retail and ecommerce. We’re in the early days of GenAI, and most of the tools are single-use. ChatGPT3 is amazing, but it’s narrative. Stable Diffusion is amazing, but it’s visual. In '23, I expect we’ll experience the accelerated emergence of many solutions that combine tools and auto machine learning for industry-specific functionality. Just like if I want to build a table, I need a hammer, saw and a screwdriver. In digital commerce we'll see tools put together, like automated content creation + automated offer testing + automated channel/RMN management, etc.
Just look at early startups like GoCharlie, and you can see the first inklings of these AI/tools being stacked together. Merchants can generate written content for an image optimized for specific channels, or vice versa, an image for content – content that is optimized through automated continuous learning. Or, they could generate pricing and promotion to optimize for a goal revenue target across multiple RMNs. We are really on the precipice of changing the entire function and organization of digital retailing.
Now, having said all that, we won't do that all in '23. But I expect it to be quite an exciting year in Applied GenAI for ecommerce. It’s worth calling out: These tools are unlikely to come from or be managed by your legacy agency or consulting partner. The implications of this shift are going to be a lot of fun to watch!
–Al Sambar, general partner, XRC Labs
Rethinking pricing and packaging
With economic uncertainty a major factor leading into 2023, I believe that brands and online retailers will be encouraged to show flexibility in their pricing models in an effort to stimulate demand. We also may see a shift in offerings, too, as sellers double down on their strengths and reduce their exposure to products that do not perfectly suit their target customers. Moving forward, I think that we might also continue to see a noticeable change in the packaging associated with direct-to-consumer products.. As consumers continue to notice these massive volumes of packaging, there might be increasing pressure for brands and retailers to be really thoughtful about the packaging they use.”
–Ruslan Fazlyev, GM, ecommerce, Lightspeed
With a recession looming, 2023 will see brands focused on driving sustainable growth and profitability, rather than grow-at-all-costs strategies. To navigate the headwinds, brands must ensure that each dollar invested is optimized for maximum return on investment. Brands that started building a data asset in 2022 or before will be positioned to excel here, while brands that have yet to start this process will struggle out of the gate, as margins tighten and the consumer outlook on the economy dwindles.
–Jesse Leikin, cofounder and chief product officer, Tradeswell
We’re going to continue to see a need for retailers to be agile, which means it will be crucial to leverage tools that provide flexibility and the ability to pivot swiftly in order to meet new customer expectations. To do this, retailers will lean into headless commerce – the decoupling of the front-end user experience from the back-end ecommerce application. This architecture provides the autonomy brands need to differentiate their user experience on the front end without the advanced skills needed on the backend and enables them to provide an “always on” personalized customer experience easily, quickly and affordably. According to Salesforce's State of Commerce Report, 80% of retailers that don’t currently have headless commerce technology plan to implement it in the next two years. This momentum is a testament to the growing need to respond quickly to the ever-changing ecommerce environment.
–Scot Gillespie, GM and EVP of Commerce Cloud, Salesforce
After a year of excess inventory – and excess costs – in 2023, ecommerce retailers will be more selective about what they buy, which in turn, will make CPG companies more selective about what they make. At the same time, CPG companies tired of dealing with the rising costs of goods, will be more selective about what they produce, which will force retailers to restructure their assortments. This cycle of selective planning will no doubt trigger increased collaboration between retailers and producers, who must work together to continue to meet the needs of the consumer – whether that’s through joint forecasting, connected inventory planning, or increased use of supply chain digital twin capabilities.
–Bob Debicki, Sr. Director, Global CPG & Retail Industry Solutions, Anaplan
Making the most of supply chains
Supply chains are more than A2B or B2A. They are one of the most effective tools to leverage experience, profitability and more.
–Spencer Kieboom, CEO, Pollen Returns
Differentiated social marketing
AR/VR, subscriptions, personalizations, environment, gamification, voice search, omnichannel, 3D printing... a lot of technologies are candidates to start or surf global trends and each trend perhaps suits for different industries and customer segments.
However, I still think that most of them will not be mainstream in the coming year 2023. With a limited budget and for short term results, I would go where the consumers mostly go for relaxing and shopping: social media. Brands don't need to be there only but they must have a different approach to marketing and communication with quick videos, reviews, interactive content, on-platform checkout.
–Simone De Ruosi, co-founder and CEO, Go Global Ecommerce
Marketplaces go niche
Niche marketplaces will rise to the top. While Amazon is the largest retail platform, specific marketplaces are flourishing, with Shopify at the forefront of launching its own facility to help up-and-coming marketplaces to blossom. From sustainable marketplaces (Thrive Market, Meeschell), to subscription marketplaces (Cratejoy), and more, niche marketplaces will continue to blossom as retailers look to build consumer trust and loyalty, with generally less competition.
–Luke Amery, CEO, Codisto
Finance is crucial to success
Finance! The only way to build a great brand is to build a great business. The leaders who understand not only their margin structure but their cash conversion cycles, payback periods, repeat purchase mechanics and which customers and products are driving long term contribution profit (and which aren't) and then can incorporate that knowledge into their weekly and daily decisions are going to thrive in 2023 (and beyond).
–Ben Tregoe, CEO, Bainbridge Growth
Regular is back
The Return to Rigor. A pandemic and free money prompted the industry to act irrationally for two years. We saw things whiplash back in 2022. Next year it will be back to regular growth curves and regular business models, with extra scrutiny and rigor applied to operations—as it should be.
–Jason Murray, CEO, Shipium
The most successful companies in 2023 will invest in customer experience (CX) improvements and deliver personalized experiences. Not only are consumers expecting this from brands, but 48% would also pay more for supporting content that adds value to products (source: Coveo: Ecommerce Relevance Report 2022).
–Michael Scharff, CEO and cofounder, Evolv AI
A new era for Google Analytics
Google Analytics sunsetting its current version will dramatically change how analysis and reporting gets done. Merchants need to be designing and deploying tools that will map to this new reality with clean and accurate data to avoid another iOS hiccup in their analytics mix.
–Jake and Eulalie Cook, cofounders, Tadpull
Diversifying manufacturing beyond China
Between COVID and supply chain issues, U.S. brands have struggled since 2020 to get products delivered on time from Chinese manufacturers. In 2023, we will see a dramatically increasing number of brands opting for manufacturing partners in other countries – especially as China’s continued zero-tolerance COVID lockdowns show no sign of abatement. Some brands will still choose overseas options such as India, while others will find manufacturing partners in Mexico and the United States.
–Lesley Hensell, cofounder, Riverbend Consulting
Personalization and transparency
Expect personalization to go deeper in 2023. Many online retailers currently personalize in a superficial way, but in a market where customer acquisition is more expensive, and loyalty is prized, they will need to double down on these efforts in 2023. Transparency will be key in working with customer data: shoppers want to have some control over how their information is shared and used.
–Neil Saunders, managing director, GlobalData Retail
VR and social discovery
I foresee two very specific changes in consumer behavior going into 2023. One is the use of VR and bringing it to the mainstream. We will see companies roll out innovative technology to allow the masses to test products "virtually" before buying. Expect Amazon to be at the forefront on this.
Another is an explosion of product discovery via social media. 2022 was already a big year for this, but we might see Christmas gift hunting on social media hit 80% in the upcoming year. TikTok is obviously the big driver here but there are doubts about their viability long term. Sellers are positioning themselves to be everywhere in case TikTok is outlawed in the US.
–Jon Elder, Amazon seller consultant and founder, Black Label Advisor
(This story was updated at 3:12 p.m. on Thurs., Jan. 5.)
Trending in Economy
Computer vision and mobile deep linking are helping to connect content and commerce on the visual social platform.
Pinterest is aiming to make shopping a “core” of the product experience on the visual social platform in 2023, executives said.
On an earnings call to recap the fourth quarter of 2022 on Monday, CEO Bill Ready said 50% of users view Pinterest as a place to shop, and the platform wants to make it easier for them to do so by integrating more shoppable content into the platform's most-used areas.
“In our endeavor to make Pinterest the home of taste-based shopping, we're integrating shopping across our most trafficked surfaces, including home feed, search, and related pins, to show users products most relevant to them,” Ready said. “Over the long term, we also want to make every pin shoppable.”
This will include new technology. Pinterest plans to deploy computer vision to make products and videos shoppable.
It will also include changes to the experience. Pinterest wants to take users directly to a product detail page on a merchant’s app. One way it does this is through mobile deep linking on shopping ads. These helped lead to an 8% increase in visual search shopping relevance.
The approach is showing early results. During Black Friday-Cyber Monday, mobile deep linking accounted for 40% of shopping ads revenue. For the fourth quarter as a whole, shopping ads revenue grew 50% over the same period of 2021.
“I think that is an early indicator of just how much we can do, not only to make more of our content shoppable, but also our ability to drive that full-funnel engagement where we've historically been much stronger at the upper and mid-funnel,” Ready said.
When it comes to consumer categories, Pinterest is seeing particular shopping engagement around women’s fashion and apparel. Ready also sees immediate opportunities in weddings and home redesigns. People seek out Pinterest for ideas, and can end up making purchases.
“We feel like shopping is a broad-based opportunity, while there are some categories that we will lean into first,” Ready said.
The progress caps a year where Pinterest put a strategic focus on shopping with a series of hiring moves and feature upgrades designed for commerce. This included the hiring of Ready as CEO in June. He previously led commerce and payments at Google. Pinterest also acquired AI-powered shopping recommendation platform The Yes in June, and integrated the company’s team and technology. There were signs of shifts taking place recently in the team, as the Yes cofounder Julie Bornstein recently transitioned from chief shopping officer to an advisory role.
The platform pinned shopping in 2022. Look for commerce to become a more obvious part of the Pinterest experience in 2023. Interestingly, Pinterest does not seem to be setting up a “shop” section on the app. Rather, it is making shopping a part of the app sections where its 450 million global monthly active users are already spending time.
It points to an evolution of social commerce. Integrating shopping doesn’t have to mean creating a shop. Rather, it means making existing content shoppable.