It’s that time of the year! Once the dust settles after the holiday season, it is time to look forward to a new year of opportunities and, as we have seen this past year, challenges. An energy crisis and looming recession was not something that anyone hoped for 2022, yet here we all are trying our best to cope with the situation and develop our strategies and businesses accordingly. As Shopify released their own “Commerce Trends 2023”, we asked some of our eCommerce experts and specialists what they think about 2023 trends. Below, you can find our insights and best guesses about the upcoming year in eCommerce!
Matias Toukonen, D2C Strategist
- Profitability is the name of the game! Capital is no longer cheap and investors are more demanding than ever - it will put big pressure on e-commerce businesses to make sure they show green numbers. You’ll want to make sure you know your unit economics, what the data is telling you and take best possible care of your core customers. We may also see more mergers on the merchant side when competitors in niche sectors realize they’ll become profitable market leaders together.
- AI will also change how e-commerce is run. Other than the economic difficulties, the big topic of discussion the past few weeks has been AI and its implications. No predictions would be complete without it, since the buzz is enormous. During 2023, we’ll probably see how tools like OpenAI’s ChatGPT will be used in content creation, SEO, SEM and social media marketing more efficiently. Not to mention its implications for other areas of work and life or how it may rival Google.
- B2B e-commerce will take its biggest leap yet. As consumers become more careful with their spending habits making B2C harder to navigate, resources and efforts will increasingly go into B2B. The time is right with technology being ready for it and the B2B decision-makers demanding an e-commerce experience. Time to let go of legacy systems and old ways of B2B business!
Bonus prediction: As some social media platforms like TikTok is possibly facing a ban in the US and platforms like Twitter doing its own thing, the social media landscape looks like it will become more difficult to navigate. E-commerce merchants will want to keep an eye on developments as it could have big effects on marketing plans in different regions of the world.
Mikko Rekola, Chief Evangelist
- Growth, overall eCommerce will continue to grow, just growth will be more stable and D2C businesses need to pay more attention to profitability and forecasting the future. Most need help with forecasting and related services. Our Ellis can help the most D2C brands running on Shopify Plus.
- Shopify POS will break through big-time! This is happening more and more in Europe and I have a feeling even larger brands and chains will start to adopt Shopify POS and start enjoying a seamless shopping experience together with data under a single platform.
- Influencer marketing 2.0. Influencer marketing needs to be retaught by the most D2C brands. You can no longer look just for maximum exposure and maximum peak sales, but more profitability and long term relationships with influencers, who can drag in better customers in terms of CLV and low level returns.
Bonus prediction: Paid loyalty and other services will come into part of most D2C brands offering. To create a truly meaningful relationship once needs to sell much more than dull physical items. Events get packed together with physical offerings and after Netflix, Uber and Wolt, people are ready to pay monthly fees for helpful memberships.
Hanna Liimatainen, Head of Sustainability
- Looking at the online store data from the point of view of responsibility. Start there with what is already ready. The pain points of online shopping that have already been identified are also the pain points where responsibility should start in 2023. Inventory management and circulation, sales, logistics and returns, products that meet needs - all of these are just as sustainable, profitable business as the actual sources of e-commerce emissions. When these are filed as the most profitable from a business point of view, they also directly affect responsibility. The carbon footprint of online shopping decreases, communication with customers improves and choices inevitably lead to a more sustainable business. In this way, we quickly get to the biggest pain point of online stores, that manufacturing should meet buying and genuine needs in a resource-wise manner and with respect for human rights.
- Working on your return policy. Online store returns are an unsustainable entity. Woolman's data platform Ellis has accumulated information on returns over the course of a year, and their responsibility implications are enormous! The returns tell about the economics of online shopping as well as inventory management, logistics, but also about consumer behaviour. Behind the returns, we get to terms such as diversity, inclusivity, responsible online advertising, ethically sustainable payment methods, green payment, etc., but from there, a new way of segmenting customers into responsible and irresponsible customers is also built. The pioneers bring responsibility to customer segmentation and the bravest communicate about it. In the big picture, this leads the online store towards the fact that the purchase of products is considered and sustainable.
- More product-oriented communication. The claims of responsibility also extend to product cards and the provision of product information. More and more is required of product information: what are the effects of manufacturing the product and, on the other hand, how the product is ultimately recycled. Certificates are also becoming more common. The biggest challenge in 2023 is the lack of comparison points, there is no standard to compare with or how to help customers compare. B corp is growing in popularity, you should at least get to know it now! Transparency and openness have been talked about for the past few years, now 2023 may finally make it a reality.
Pinja Kuitunen, D2C & eCommerce Specialist
1. Brands that adapt user-generated content will win more often than those without.
Even though user-generated content is not a new concept it has not loose its power. In addition, with good UGC strategy you can save your content creation costs.
There are more and more technologies available to grab different content types to your online store: it is not only written reviews - today you can make product related photo and video galleries easily with only a few clicks which saves time and very often it has positive effect on your online store conversation rate. This same content you can easily use in other channels to improve your social commerce and brand story telling.
Roosa Hämäläinen, Growth Hacker
- The importance of TikTok is growing even more, also from the point of view of search engine optimization: TikTok has replaced Google as a search engine in certain age groups, and users prefer the app’s search features primarily for the purpose of searching for information: -> the user first searches for information about different products and features in TikTok, then enters a direct brand search into Google. Nowadays, Google indexes TikTok's content videos, (i.e. the videos appear on Google's search pages) -> if you use relevant keywords in your TikTok videos, you increase the discoverability and position of your brand online.
- Responsibility as part of online shopping and its communication: Consumers' awareness of themes related to responsibility is increasing. This is directly related to the company's responsibility communication and the way information is presented, e.g. in product cards. Through this, new more responsible operating models are also emphasised (e.g. second hand and repair services). This requires additional work also from the point of view of customer acquisition and retention, when consumers increasingly take into account the company's values and responsibility as part of the purchase decision. This forces many online retailers to consider their values, operating models and communication methods in order to keep growth and customer loyalty on the planned track.
- From a technological point of view, there will certainly be development. It is likely that AR and AI will increase as part of e-commerce and customers' purchase journey, blurring the line between physical and online shopping. At its simplest, this can be seen, for example, as 3D product images or the possibility to virtually fit products before making a purchase decision. Also live shopping and virtual showrooms will become more popular. It is interesting to monitor what kind of effect such development steps have on, for example, the return rate and the time spent considering a purchase decision.
Bonus from Aleksi Kauppinen, Digital Marketing Specialist:
Next year, the instability in world politics will probably level off a bit (hopefully). However, the raging recession limits/shapes the purchasing behavior of consumers. Price becomes an even bigger driver in making purchase decisions, which in turn increases price competition, especially in the context of online shopping, and thus reduces the company's margins. On the other hand, we are optimistic that the economy will be better next year than, say, compared to this fall. It will be interesting to see how the Omnibus act will affect this phenomenon, when it is no longer so easy to manipulate buying with offer prices. How, for example, responsibility and brand commitment will affect this equation depends entirely on the consumer's price flexibility. It is likely that when you divide by demographics, these differences will be more clearly visible from different groups
Ville Pietarinen, Senior UX Specialist
- In future AI will play a bigger role in the content creation of the ecommerce. AI might in future change the way of the how the content is created. Backend systems will be more capable of using AI for product descriptions, AI will be used for detecting different kind of product variant information such as detecting colors, materials, etc. from pictures and offering more detailed information automatically as a base of the product information. There will be better AI generated content such as recommendations for customers, etc. Other interesting fact will be how for example search engines will detect the AI generated content. Google for example has for example invested into AI for years to detect similarities in text, what will happen whan AI reading the content is competing with other AI to create it. While AI will make future work faster, it still doesn’t remove the fact that some manual work will still be needed.
- Omnibus directive will start affecting eCommerce at the beginning of the year 2023. There will be changes both in the price and sale price indication to customers and on the product reviews. Merchants are obliged to display prices and product reviews more precisely. The goal is to give more trust on product reviews (and other user generated content) and prices. Interesting to see what will be the effects of these regulations. Will the product prices increase or the sales campaigns end longer than before or do the merchants stop making sale campaigns because following the new regulations are so difficult and unclear. Will be the bigger players in ecommerce dominate the markets more than before, because the smaller ones just don’t have the time and money to implement the new regulations. Omnibus and price indication directive might also change the game what comes to marketing and campaigns and for example influencer marketing.
- Analytics and 1st party data. Analytics has been a part of eCommerce and in any website for years, but after the GDPR regulations all changed. It’s more and more difficult to collect the data. Countries such as France have already claimed for example Google Analytics to be illegal to use. On top of that the transition of traditional Universal Analytics to GA4 will change the way analytics work. Also browser vendors concentrate all the time more and more of privacy features making the use of 3rd party cookies harder than before. Because of that 1st party data will play a bigger role in the future.
- Markets and B2B on Shopify. Shopify has released a lot of features recently. Personally I see Shopify Markets and new improved B2B functionalities the best of those recent releases. They will make a big impact for Shopify as a platform in B2B sales and for international sales.
There you have it. Our biggest predictions and insights on the upcoming year of 2023. Do you agree with our predictions or is there something we missed? Lets see what the New Year brings.
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