The e-commerce industry growth is expected to accelerate in 2023, driven by the increasing number of online shoppers and the continued rise of digital payments.
According to various reports, 20.8% of retail purchases are expected to take place online in 2023, and e-commerce sales are expected to grow 10.4%.
The global e-commerce market is expected to reach $6.3 trillion, and the U.S. e-commerce market will reach over $1.1 trillion in sales in 2023.
The fast growth leads to a rise in competition among e-commerce companies, with many investing in technology, logistics, and marketing to differentiate themselves and attract customers.
Sustainable vs Fast E-commerce
In 2023, sustainable commerce is finally going to beat fast commerce! Attitudes towards a more sustainable living have changed dramatically in the past years, but it is still not considered a top priority for consumers — only 8% would take action by cancelling an order if green delivery was unavailable.
The European Green Deal has forced companies to take action and amongst others invest in green shipping options and sustainable packaging. Next year, we can expect both carriers and merchants to play a key role in sustainable behavioural change amongst consumers.
By increasingly pointing out sustainable options on product pages and in the checkout, we can encourage consumers to make green rather than fast decisions.
Increased Efficiency of Data Labeling for Machine Learning
Personalizing a customer’s online shopping experience is crucial to increasing online sales and bolstering e-commerce success. Machine learning is used to enhance customer experience through improved search, tailored recommendations, and more. However, few know that ML in e-commerce is only as good as the data it’s trained on.
Any ML product requires three components: hardware, algorithms, and data. While the first two are readily available and generally present no obstacles, gathering high-quality data to train ML models remains a challenge. Data labeling powered by human insight is one way that companies may use to better train ML applications.
Increased Adoption of Augmented Reality
Experts estimate that implementing augmented reality (AR) in an online store can increase sales by up to 71%. Because this experience is similar to what a customer can have in a physical store, this technology allows for more interaction with the consumer as well as a unique and satisfying experience.
The augmented reality market is estimated to reach $78 billion by 2028. A large driver of this predicted growth is the adoption of AR by both online and brick-and-mortar retailers to improve upon the shopping experience.
More Short-form Video Content
TikTok and Instagram reels changed the way we consume short form video content and now many apps are launching features allowing e-commerce sellers to have Stories as part of their website.
As these platforms continue to push such videos – e-commerce brands can utilize this trend to easily increase brand awareness and reach.
Getting down with UGC
User-generated content (UGC) is content about a brand that’s created by its users, rather than the brand itself. It’s a potent content marketing technique, particularly with the recent surge in virtual shopping.
Trust matters. And when it comes to trust in e-commerce, consumers have more faith in organic user content, more than branded content. So user-generated content (UGC) like customer photos, videos, and reviews offer fantastic social proof and build credibility for brands looking to sell online.
The Rise of Social Commerce
Social media platforms are becoming an increasingly important part of the e-commerce landscape as consumers use them for discovery, research, and even purchasing. Companies will need to incorporate social media into their e-commerce strategies to reach and engage with consumers.
Global sales via social media platforms were estimated at 992 billion U.S. dollars in 2022, and forecasts suggest that social commerce sales will reach around 2.9 trillion U.S. dollars by 2026.
Social commerce is critical for brands to reach their target audiences, and is expected to generate $30.73 billion in sales in 2023, accounting for 20% of global retail e-commerce sales.
Expanding Omnichannel Capabilities
Being multichannel means businesses must be able to sell to and communicate with customers through multiple channels at any given moment. This may look like having a website, Facebook shop, and an Instagram account. Omnichannel is the next level up—and it’s the future of e-commerce. Currently, 52% of e-commerce sites have omnichannel capabilities.
Building omnichannel capabilities into an e-commerce site requires an intimate understanding of the consumer audiences. Creating a seamless experience is what often causes a customer to return. In fact, companies that have robust omnichannel strategy, retain almost 89% of their customers. However, the reverse is also true. Companies with weak omnichannel strategies have a 33% customer retention rate.
Expectations of brands grow as consumer behavior changes
Consumers have more options than ever, and in today’s economic climate, they’re ready to exercise that freedom of choice. More than seven in 10 consumers bought from the competitor of their go-to brand between May 2021 and May 2022.
And, if spending power decreases as expected in 2023, consumers will continue to shop around for better deals.
But shoppers aren’t just aware of the price tag. Environmental, social, and governance concerns influence about half of global consumers.
Buyers want to support more ethical businesses with more sustainable supply chains—even though consistency in freight, distribution, and especially fulfillment are nearly impossible for many businesses to control.
That’s why product shortages motivate nearly half of all brand switching: 46% of consumers move to competitors who have the products they want in stock.
Discovering new brands to try is also easier for consumers—and most are ready to buy.
More than seven out of 10 like the convenience of instantly purchasing products where they’re browsing.
Consumers want their shopping to be personal, instant, and responsive—and they want that high-value experience anywhere.