Top six eCommerce trends in 2023
09 Jan 2023
Rajeesh P
Business Analyst
The report, ‘Global Retail eCommerce Sales 2014-2026’, published by Stephanie Chevalier in September 2022, says, “Retail eCommerce sales amounted to nearly 5.2 trillion USD globally, in 2021. This figure is forecasted to grow by 56 percent over the next few years, reaching about 8.1 trillion dollars by 2026.” (Ref-1) Again, according to eMarketer, global ecommerce sales are projected to increase 12.2% year-over-year, to $6.3 trillion in 2023 itself.
While the growth in eCommerce is geography agnostic, Europe and USA continue to rule the roost. Among the European nations, UK, France and Germany continue to be the top three eCommerce markets with uniquely diverse features. The USA which is known for a diverse eCommerce market is reportedly witnessing a strong upwards trajectory. Notably, pure-play eCommerce giants like Amazon took 38% of US eCommerce market share in 2020. (Ref -2)
The listing of Alibaba on the New York Stock Exchange at the valuation of $231 billion in 2014 had for the first time brought global focus on the eCommerce market. Since then the eCommerce industry has continued to experience exponential growth in both developed and developing nations. While the emergence of non-banking players in the payments industry and innovative vertical specific start-ups greatly enabled the advancement of the global eCommerce market, the pandemic had actually fuelled an unprecedented growth for almost all online businesses.
Against this backdrop, it will be interesting to see the upcoming eCommerce trends in 2023 and beyond.
1. Impact of the pandemic on eCommerce is here to stay
Notably, an unprecedented increase in online retail spending was witnessed in 2020 due to the COVID-19 pandemic whereby online sales in US retail jumped 40 percent year over year in 2021. (Ref-3) Even as the pandemic abates, consumers across the globe are opting for the omnichannel path to purchase almost everything including electronics, medicines as well as groceries. Industry experts agree that the impact of the pandemic on eCommerce is here to stay as people will get comfortable with the convenience and the benefits of contactless payments. Thus a permanent behavioral shift toward digital purchases is certain.
2. Innovation in ways to reach consumers
Omnichannel fulfillment alternatives like home delivery from neighborhood shops, shipping at door steps, and click and collect options are gathering momentum. Another fast emerging alternative is social commerce, which sells through social media platforms. This mode of retail is predicted to get doubled from 2021 to 2025, accounting for nearly $80 billion in retail sales. This massive growth puts the USA second to China in social purchasing. In China, social commerce currently clocks more than 13 % of eCommerce market sales. (Ref-4)
3. Personalization will become a priority
The rise in online sales creates an overwhelming amount of data on how consumers shop or how they connect with brands. Moreover, companies now manage to get greater clarity into purchasing trajectories of customers. These include insights on cart abandonment, add-to-cart rates, browsing activities, along with time taken for purchase. By capturing these data, retailers will continue to create more personalized experiences in the upcoming years. On the other hand, consumers too will expect personalized, and relevant interactions from the brands.
4. Businesses to make necessary tweaking for the generation Alpha and Gen Z consumers
Let’s check these interesting data points-
As more of these generation Alpha and Gen Z consumers enter the eCommerce space, eCommerce businesses will have to make necessary tweaking to adjust to the buying preferences of these power-packed generations. The young buyers with unprecedented digital mastery expect brands to be as smart as them when it comes to online operations. Omnichannel that provides a connected shopping experience will be mandatory to woo them. Social commerce and apps like Instagram, TikTok, Snapchat, Spotify, and Twitter make online purchase easy for these customers as the platforms provide authentic and trusted suggestions from influencers. The fact that these customers are least patient, means they would quickly leave a site for another site, if expectations do not meet.
5. Augmented reality, AI, Metaverse to gather force
Augmented reality and virtual reality have been playing a critical role in eCommerce for quite some years now. Both the technologies are used extensively for the customers to understand products in a better way, and visualize them. AR on the other hand enables them to visualize the products in 3D. According to a report, shoppers engage with 3D images of products nearly 50% more than static ones. (Ref-8)
Add to that the emerging concept of metaverse. Here, the physical, augmented, and virtual reality, conflate to create a computer-generated environment enabling users to interact and purchase in the real world like experience. Experts identify fashion, beauty, and home goods as the top three retail categories which have great prospects in the metaverse in the coming years.
6. Payment options to be deciding factor for eCommerce in 2023
Difficulty in payment or check-out process is recognised as the major reason for shopping cart abandonment. According to Statista, digital wallets are the most sought after payment methods for online purchases. PayPal, which has more than 426 million users and allows simplified purchases across many currencies, is the top online payment gateway, with a whopping 60% of the market share. (Ref-9)
Experts feel mobile wallets will continue to revolutionize point of sale payments for eCommerce, direct selling via social media will grow and flexible financing options that make purchases affordable will see substantial rise.
It is quite clear that the future of eCommerce businesses is bright and the expected growth will come from mobile sites, social media analytics, omnichannels, and personalization. Armed with the interactions of social, mobility, analytics, cloud (SMAC), digital, 3D and virtualization, eCommerce industry is going to be an exciting place to build your brands. However, eCommerce growth strategies will not be a one-size-fits-all solution, as tactics may differ on market attractiveness, target customers, and risk taking capacity. However, implementing and strengthening the above metrics properly can be effective in driving your online business growth. If you are looking to build or expand your eCommerce business, Mozanta will be happy to share expertise and proven tech solutions for driving your business and revenue growth.