Looking to increase online sales from your e-commerce business? Or maybe start up a new e-commerce venture?
Then you need to be aware of the e-commerce trends for 2023, as they impact your current platform or plans to start a new online store.
The rapid pace of change is perhaps more apparent in e-commerce than anywhere else. Your business will be impacted by changes to user habits like shopping on mobile devices or using virtual reality to visualize the product, as well as the increased adoption of online shopping worldwide.
Why Is It Important to Understand E-commerce Trends
If you already run a successful brick-and-mortar store, you might wonder: Why do I need to know about e-commerce trends? While traditional stores are still used by many consumers, what’s called an “omni channel shopping experience” is becoming the new norm.
That’s because many consumers now use both brick-and-mortar stores and e-commerce shopping to reach their goals. So adding an online channel will help expand your sales.
If you’re starting a new venture, consider that an increasing number of consumers are making more purchases than ever online, using computers, smartphones and tablets. They also use online sites and mobile apps for the products and services they want, making it even more critical for businesses to have an online sales presence.”
So now you know why e-commerce trends are vital to your business. Here are the 8 e-commerce trends you need to know about.
1. The Boost Provided by the Pandemic Was Not Short Term
The Covid-19 pandemic was devastating, but it did lead to a boost in e-commerce. The initial surge in e-commerce globally was borne out of necessity. That’s because retail locations closed, and people stayed home around the world. As a result, global e-commerce rose from 15% of total retail sales in 2019 to 21% in 2021. In 2022, Financial services company Morgan Stanley reported that it now sits at an estimated 22% of sales.
Morgan Stanley also looked at whether that was a one-time boost, and its answer is no. The company states that in its view, “over the long term, the e-commerce market has plenty of room to grow and could increase from $3.3 trillion. That’s forecasted to grow to $5.4 trillion in 2026.”
Numbers in Canada also continue to grow. According to Statistics Canada, in March 2022, e-commerce sales amounted to approximately $2.34 billion USD. It is estimated that retail eCommerce sales will total $40.3 billion USD by 2025.
2. Online Shopping Isn’t Going Away
It’s clear that customers continue to embrace online shopping. E-commerce saw a boost in popularity during the global pandemic, when people stayed home and shopped online for everything from groceries to masks. The United States Census Bureau’s Annual Retail Trade Survey, which was last conducted in 2020, showed that e-commerce sales increased by $244.2 billion or 43% in 2020.
But the convenience of online shopping has made it a mainstay. In 2022, revenue from retail e-commerce in the United States was estimated at roughly $905 billion USD. That’s forecasted to grow in the U.S. to over $1.7 trillion USD by 2027. Worldwide, it’s forecasted to grow by 56 percent over the next number of years, reaching $8 trillion USD dollars by 2026.
Improvements to technology that supports online shopping, like better and more electronic payment options, will lead to increased sales along with improved transparency and security.
eCommerce and omnichannel experience is seeing significant growth in the telecom industry as more customers shop online and pick up at the store. Telcom, mobile and wireless dealers as well as retail stores for Telus, Bell, Rogers, AT&T, Verizon, and US Cellular now have the option to get orders online with eShopton.
3. E-commerce is Global
While many of the statistics gathered are for ecommerce in the United States, it’s a global phenomenon.
In Canada in 2022, there were over 27 million ecommerce users, accounting for 75% of the Canadian population. This number is expected to grow to 77.6% in 2025. Increased online shoppers means that retail eCommerce sales in Canada continue to climb.
Both consumer and business-to-business purchases in the Asia Pacific countries dwarf all other markets by comparison, largely driven by the sheer volume of the Chinese ecommerce market.
So it’s clear that ecommerce is and will continue to be a global trend. And your online store can attract customers from around the world.
4. M-commerce is the Next Big Thing
While e-commerce is clearly on the rise, there’s another star on the horizon: m-commerce.
E-commerce involves shopping online through your computer; “mcommerce” refers to shopping through a mobile device, typically a smartphone. Mobile device retail sales in the United States in 2022 are forecasted to surpass $430 billion USD, an almost two fold growth since 2019. By 2025, the forecast is for retail m-commerce sales in the United States alone to grow another twofold, amounting to approximately $710 billion USD.
As of late 2021, nearly one-third of internet users in the United States bought something online each week via a mobile phone, a rate slightly higher than the global average. Users in Malaysia and South Korea led the way at 44.6%.
Mobile devices are also used to research items before purchasing. And let’s not forget about the rise in popularity of mobile wallets and contactless credit cards, like Google Pay and Apple Pay.
Tablets are also contributing to the rise of mcommerce. Although not as popular as smartphones, it’s predicted that $64.06 billion USD will have been spent on tablets in 2022.
So your online store needs to be mobile responsive to take advantage.
5. Focus on Personalization with Artificial Intelligence – AI
Looking to make customers loyal to your products or services? Personalization with AI is what will build brand loyalty and significantly impact consumers’ shopping experiences. There are many areas where AI personalizes the shopping experience:
- Product Recommendations: AI algorithms can analyze a customer’s browsing and purchase history, as well as similar users’ data, to provide personalized product recommendations. By understanding a customer’s preferences and behavior patterns, AI can suggest relevant items, increasing the chances of a successful sale.
- Personalized Search Results: AI can enhance search functionality by considering a customer’s previous interactions, purchase history, and preferences. By tailoring search results to individual users, AI can ensure that customers find the most relevant products quickly and easily.
- Dynamic Pricing: AI-powered systems can optimize pricing based on various factors, such as customer behavior, demand, and inventory levels. By analyzing large amounts of data, AI can dynamically adjust prices in real-time, offering personalized discounts or promotions to individual customers.
- Sentiment Analysis: AI algorithms can analyze customer feedback, reviews, and social media data to gauge sentiment and identify patterns. This analysis can help e-commerce platforms understand customer preferences and tailor their offerings accordingly.
- Personalized Offers and Promotions: AI can segment customers based on their preferences, demographics, and buying behavior to deliver personalized offers and promotions. By tailoring discounts and recommendations to individual customers, e-commerce platforms can enhance customer loyalty and engagement.
One report from Segment states that 49% of consumers would “likely become a repeat buyer” if the retail provides a personalized experience.
6. Millennials are a Dominant Buying Group
Millennials, those typically born between the early 1980s to the mid-1990s—or those in their late 20s to early 40s—have become the dominant buyer group.
What does that mean for e-commerce? A lot.
The Millennial Shopping Habits: Trend Report found 80% of consumers aged 25 to 40 report shopping primarily online. That means businesses need to optimize their online sites to cater to the priorities and interests of younger shoppers and convert website traffic into paying customers.
It might also require better product representation, such as videos, reviews and interactive content about a product, to make it “more marketable in the online world.”
It could include more product marketing on social media platforms. It’s reported that around 68% of users made purchases through a social media platform and almost all intend to make such a purchase within the next year—which leads us to trend #7.
7. “Social Commerce” Will Continue to Grow
The Internet has changed the retail landscape forever, with the number of global internet users now approaching 5 billion. That led to e-retail sales of over $5.2 trillion USD worldwide in 2021. And as the world’s digital population grows, so does the reach and usage of social media. People are now spending up to at least an hour per day on social media, and it’s not just to stay in touch with friends and family.
Shopping on social media continues to grow, with sales through social media platforms estimated to be $992 billion USD in 2022. It’s forecasted that the value of what’s called “social commerce sales” will reach $2.9 trillion USD by 2026. It has also meant an increase in “influencer marketing,” a form of social media marketing involving endorsements from those seen as influential in their field. It had a market value in 2022 of a record $16.4 billion USD.
What does social commerce mean for ecommerce? You need to build a social media presence for your business and effectively market what you sell on those platforms. If you’re on social media, you need to make sure it’s working.
Facebook has added a Buy button and Instagram has Checkout; platforms like Shopify make it easy to link an ecommerce store to a social media site; and the The video-sharing app TikTok has incorporated ecommerce elements with its Shoppable Ads.
These tools make it easier than ever for social media to lead to social commerce, which only promises to grow into the future.
8. Virtual and Augmented Reality is the Next Shopping Transformation
Just as more and more of us get used to online shopping, virtual and augmented reality are creating another new overhaul of that experience.
Virtual reality or VR re-creates a full sensory experience, sometimes including sight, touch, hearing, smell, or even taste. As per a report from Statista, the industry is expected to grow from less than $12 billion USD in 2022 to more than $22 billion USD by 2025.
In the context of shopping, VR can recreate reality from the comfort of your home, allowing you to see a product in person, instead of having to guess what it looks like through a static online photograph. VR can allow shoppers to visualize how IKEA’s furniture will fit in a room, for instance, or even virtually try on earrings and see them dangling from their ears; drive a BMW and customize the colour before buying it; or try on L’Oreal’s makeup prior to purchasing.
Showcasing products using VR may change the way consumers visualize them and drive more sales. VR can help show how a product will meet the needs of a customer. And it can be used to recreate an in-person shopping experience, allowing you to reach more consumers from a much broader geographic base than with a brick and mortar store or online shopping alone.
Logging Off
The digital world continues to evolve, and e-commerce is no different. For your business to stay competitive, you need to stay in tune with ecommerce trends. Our 8 ecommerce trends for 2023 will help you make improvements to your business, drive sales and generate customer loyalty.
Contact Gentraf, Technology Advisor to discuss how eCommerce trends can help your business grow and evolve.