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Shop Circle recently hosted a video discussion exploring what’s happening in the world of e-commerce today, and what we can expect to see in 2023. Catch the full conversation: https://shopcircle.co/video/e-commerce-2023-looking-forward
While the pandemic accelerated a surge towards e-commerce spending, today’s return-to-near-normal, paired with economic fears has led to a consumer reluctance to part with dollars. And in a global marketplace more competitive than ever before, e-commerce brands and merchants are now challenged with how to win consumer hearts (and spend) while responding to changing tides in 2023.
In this comprehensive report you'll find diverse perspectives from a wide range of e-commerce leaders, partners, merchants, and brands as we look to key trends and considerations to help you not only stand out, but even scale in a 2023 e-commerce environment.
Throughout our conversations, clear patterns began to emerge across categories; retention, channel strategy, personalization, rising acquisition costs, and subscriptions to name a few.
Retention, retention, retention
Retention. I think retention's still going to continue to be something that people just drive into more and more. How do we retain not just acquiring new?
Kyle Dutka, Co-Founder, PB&J
“Brands may not realize it yet, but they have to dial back their spending on paid acquisition and they've got to start working on retention and building affinity and then retaining those customers. But I think retention marketing has kind of become this sort of catchphrase for email and SMS when it’s much more than that. It's about how do we retain our customers and turn our customers into fans?” (See second trend in Fundamentals)
Galen King, Founder & Strategic Director, Lucid
“The first is customer retention. I think that's something people are mentioning all the time—through upsells, loyalty programs, everything. Brands see that the cost of acquisition is going up. So they’re trying to diversify the way they are selling, and to actual customers they already have. I think that's where the strength of a future booming e-commerce business is.” (See second trend in Channel Strategy)
Rémi Drogoul, Head of Partnerships and Marketing, Opinew
“Personalized packaging, personalized CX + brand loyalty programs/perks.”
Bianca Egas, Channel Partner Acquisition Specialist, Aircall.io
“Dropping the obsession with conversion rate. The past two years have shown us that trying to thrive off new customers alone doesn't pay. It's too expensive, and ultimately, switching some of the funding for acquisition into retention is where the smart money is at.”
Adam Pearce, CEO, Blend Commerce
Retention stats
Shop Circle recently hosted a video discussion exploring what’s happening in the world of e-commerce today, and what we can expect to see in 2023. Catch the full conversation in E-commerce 2023: Looking forward.
More video
“I foresee and hope that video is more of a trend in 2023. A lot of merchants have the opportunity to add video to their content, their product pages, their home pages, to be more engaging for customers, because that's usually how they get to their website. And I think that making that experience more consistent is something we're going to be seeing more in 2023.”
Ademola Adelakun, Co-Founder, CEO, Made Digital
“Video is king (or queen!) pretty much everywhere in our lives. Social video platforms like TikTok can launch an artist, trend, movie, or meme into the stratosphere in a matter of days. Instagram is boosting Reels and expanding video in Stories. Pretty much everyone regularly spends time on video, every single day - on Zoom meetings, Facetime calls, or browsing /creating their own video content. It's time for e-commerce to catch up and put video - ideally, interactive video - front and center. Live streaming events, shoppable video, and one-to-one live video co-shopping should become the gold standard of an excellent online customer experience that mirrors how we interact with and use video in our daily lives.”
Brittany Rycroft, Head of Marketing, GhostRetail
"Video - hands down. In various forms but the big three I see gaining a lot of momentum are: In video shopping, video assisted shopping, live-event / live streaming video shopping."
Jay Myers, Co-Founder, Bold Commerce
“With consumers seeking new and more engaging ways to shop and brands becoming ever more present in the digital space, we predict that interactive commerce will gain even more traction in 2023. We expect to see more brands adopting shoppable videos and hosting live shopping events, as well as an increased focus on User-generated content (UGC) like unboxing videos and influencer campaigns on Tiktok.”
Laura Brisson, Head of Marketing & Partnerships, Fluorescent Design
Channel strategy
“We've been seeing an increasing number of the Shopify brands we work with testing out new acquisition and retention channels beyond your typical paid social media and OOH marketing mix. Relationship-building channels like direct mail, SMS, e-commerce apps, community and customer success have slowly been gaining traction this year, and we expect that momentum to accelerate into 2023.”
Juliana Casale, Head of Brand & Community, Wonderment
“...A second trend we'll probably see is channel diversification in terms of brands communicating to customers. If we think about how kind of busy it is and how brands are just messaging more and more with customers, there's going to an opportunity for brands to start connecting with customers, not just on channels like email or paid ads, but I think we'll start to see channels like SMS, social media platforms, WhatsApp, and maybe even returning to things like direct mail. Just as brands try and engage with customers on more channels and try and hone in on the channels that work best with each individual customer.”
Jordan Bourchier-Lee, Strategic Partnerships Manager, Klaviyo
“Two trends I think that'll be really important, will be personalization in shopping. So that experience through multiple channels or touchpoints, personalization is going to be huge. And owned marketing channels. I think we really want to look at how brands can connect with customers on a one to one level using their own channels and not relying on those rented channels that the ad space has grown on, so accustomed to.”
Tom Collver, Co-Founder, PB&J
“Diversification of the channel where you're acquiring new customers. With all the new social touchpoints, new techniques, it's becoming a bit of an ocean where you're swimming to find out the right acquisition channel for you and your brand. But I think that's also something brands are going to look into is, "How can we reduce customer acquisition costs by going through this channel or this channel?" So that's the second.
Rémi Drogoul, Head of Partnerships and Marketing, Opinew
“Phygital experiences – brands blending together digital and physical customer experiences to delight shoppers at every step of the journey.”
Mollie Woolnough-Rai, Senior Marketing Manager, Penny Black
The value add
Shop Circle recently hosted a video discussion exploring what’s happening in the world of e-commerce today, and what we can expect to see in 2023. Catch the full conversation in E-commerce 2023: Looking forward.
A focus on the fundamentals
“We're going to see a lot more focus on best practice, lean and nimble, flexible development, more on low code and no code. We're going to see brands worrying less about all the little details and more on the sort of fundamental first principles of e-commerce, so marketing and growth and all the stuff that moves the needle, and less on the stuff that doesn't matter that much like the color of the buttons, or whether to use drop down menus, all these things that they have traditionally had really strong opinions on when they really don't know what works best. We're going to see more developers and agencies leading brands with expertise and brands caring less about the details.”
Galen King, Founder & Strategic Director, Lucid
“One is the supply chain issues that had plagued everybody post pandemic. They're starting to see that supply actually come in. Some of our brands were expecting thousands of units of product back in May and June, and that caused issues for them to be able to supply what their customers needed. And now they're seeing what's called oversupply. I think you're going to hear oversupply throughout Q4 and into Q1 of 2023. And that's going to cause a lot of havoc for merchants. How are they going to be able to position their product so customers are going to want to be able to purchase at the volume they need to, to be able to clear their warehouse for more product that's going to inevitably be showing up."
Nihar Kulkarni, Managing Director, Roswell Studios
“As the global economy is slowing down, it has an inevitable effect on e-commerce too. Online buying will be a harder decision to make than a year ago. Because online shoppers will tend to save money on the things they want to buy to keep some for the things they need to buy. Therefore, to me, the biggest trend will be flexible payment options like ''buy now, pay later '' and some other variations of it. Offering flexibility on the payments will be the thing. Remember, the first rule of commerce is ''make it easy if you want me to buy your products''!”
Murat Kaya, Director of Growth Marketing & Partnerships, Shopney
“The reduction of CAC. People are going to be obsessed with CAC as we continue to move forward to a cookieless future.”
Rhian Beutler, CEO, Govalo
“And with that, actually prioritizing building integrations between apps… This was deprioritized at one point because it was really hard to balance building those integrations along with your core product. But lately I have seen a much bigger push for building these integrations again because there are so many brands that are asking for them. They need them in order to have data syncing seamlessly between their full tech stacks so that they can leverage it to create better customer experiences. We're shifting back towards seeing that push for integrations again. And along with that, these embedded iPaaS companies are coming up because it is difficult to balance integrations with expanding your core product features. Online brands are looking into third party tools in order to do that. That's what I see continuing to grow in the new year.”
Tina Donati, Content Marketing Lead, Alloy Automation
“Reducing costs, exploring new channels and doubling down on selling more to existing customers.”
Nathan Lomax, Co-Founder, Quickfire Digital
“I think marketplaces are bound to gain in popularity in 2023. I initially thought 2022 would be the year for it, but for some reason or another we weren't quite there yet. With a now well-established awareness that D2C brands will continue to struggle to gain awareness by themselves, it's now the time for marketplaces to shine and take that responsibility.”
Tim Masek, Director of Growth, Storetasker
“Optimizing for profitability in a recession.”
Kate Leadbeater, CMO, Flashfood
“Human-led experiences via SMS, video, audio.”
Lisa Popovici, Co-Founder & CMO, Cartloop
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“Scrollytelling - In general, storytelling is more and more important. We're seeing sites achieve this with animation on scroll to set the pace for the user's experience. This is a great way to add some life to your content and make it more engaging for users.”
Rachel Wyatt, Senior UX/UI Designer, We Make Websites
“2023 will see a continued rise in e-commerce growth, and a subsequent rise in cyberattacks (24% of cyberattacks target retailers). Therefore, 2023 will see retail stores becoming more vigilant with protecting their store data. This increase in cybercrime will also influence consumers; modern shoppers are increasingly conscious of what personal information they are willing to part with. Letting your customers choose if they want to save their credit card details or join your email list are two simple changes you can do to your site to show customers that you take their data privacy seriously.”
Alison Piel, Partner Marketing Manager, Rewind Software
“I think 2023 will really be about building community engagement from the ground up. Things have very much flipped from where they used to be with "Okay, take our product and enjoy it. Now there's more of an educated consumer now and they have expectations. And from there, they want to know who you are, what you're about, and then from that decide to make their purchase. Hopefully, if you’ve built engagement effectively, hopefully have increased average order values and customer longevity.”
Yannick James, Business Development and Strategic Partnerships, Bemeir
Reduction, subscription, speed
“In-store interactions are back. People now are inclining towards the brick and mortar store. So in 2023 Omni channel is going to be one of the top trends and something which online businesses should look at. People compare before they buy, and in such scenarios, having just a stand alone e-commerce store would leave you behind competitors.
Re-commerce as a concept has grown a lot over the past few quarters. With ideologies like reduction of carbon footprints and to reduce the buyers remorse, Re-commerce has emerged as an amazing idea. In 2023 this is certainly going to be in top trends.
Subscription commerce is another big thing which was introduced to the market way back, but still continues to be top trends as the adoption earlier was quite low. People now understand the importance of a Stable GMV and sustainability formula. In 2023 subscription will also play a very important role in the world of commerce.
In the world of fast commerce/quick commerce the delivery lead time is also going to be one of the most important aspects to look at as people now love getting stuff in a day or sometimes may be in hours so 2023 might see a change in the delivery behaviors.”
"I think sustainability in retail will continue to be important as we move into 2023. Consumers are switched onto it more than ever. It's increasingly important to people and they're becoming more savvy to 'greenwashing' - so retailers need to take the issue of sustainable business seriously and be able to demonstrate what steps they're taking across their entire operation: from supply chains and manufacturing, to delivery and returns."
Jason Stokes, CEO & Founder, Eastside Co
Shop Circle founder perspectives
“One of the problems most of the D2C brands are facing nowadays, it’s very difficult to be top of the mind of the customers, and it's very difficult to find them. There are 2.5 million brands selling on Shopify and this number is growing at 20% year on year. So we are seeing more and more of the trend of omnichannel. Brands are expanding from Shopify to Amazon as well. Because on Amazon it is easier to be discovered. You don't compete for your brand value and instead more on price and reviews. Additionally, brands that have been able to grow are expanding into Shopify to extend that reach.
It is also relatively difficult for brands to focus on retention, especially in a consumer recession environment. You have to convince the customer to come back to your website and buy more and more, so all the apps around loyalty programs, retention, subscription plans, are getting more and more popular. It will be a real trend. In a market where customer acquisition becomes more and more difficult, retaining existing ones is extremely important.
A third big trend will also be with increasing cost in the goods sold, raw material as well, going up the supply chain. Being on top of the supply chain and inventory will be increasingly more important for brands.”
Luca Cartechini, CEO and Co-Founder, Shop Circle
“The number one theme will be pricing. Why? Considering what's going on in the macro environment, customers are becoming more and more selective, picky, and careful on how much they pay for their products. So, really, pricing is going to become a huge theme, and merchants will have to become more and more sophisticated, do more research, and also leverage tools, to ultimately understand what's the right selection at what price to really feature for their customers.”
Gian Maria Gramondi, Co-Founder, Shop Circle
Shop Circle recently hosted a video discussion exploring what’s happening in the world of e-commerce today, and what we can expect to see in 2023. Catch the full conversation in E-commerce 2023: Looking forward.
Looking back: If you could go back in time, what advice would you give your previous self when it comes to e-commerce?
“To not be overly critical and go with what you have. Sometimes we get too caught in the details.”
Lily Harper, Founder, Lili Lou’s Aromas
“Focus on your pricing structure including shipping costs, invest in influencer marketing, launch and perfect it later.”
Sentrell Marsh, Founder, Sensual Candle Co.
“Do your homework before jumping in feet first.”
Jonathan Davies, Octoworksuk
“Learn to adapt quickly.”
Sarah Khaled, Founder, Urban Thrill
“Don't be afraid to partner up with other companies.”
Cheri Fennell, Business Owner, Humanity Organics Plus
“It takes progress, not perfection.”
Amy Draper, Inventory & Online Manager, She Science
“Don't stress so much, this is an ongoing process of growth.”
Paris Munn, Founder, Sensual Sinsations
Looking forward: What do you foresee being an e-commerce trend or theme in 2023?
“Tik tok and reels format videos to showcase products in fun ways, how to use in context, how to style etc.”
Rachel Lin, Co-Founder, Mori Official
“UGC, TikTok, Influencer/Affiliate programs especially with the launch of Shopify’s app.”
Sentrell Marsh, Founder, Sensual Candle Co.
“Streetwear.”
Jonathan Davies, Octoworksuk
“Sustainability.”
Sarah Khaled, Founder, Urban Thrill
“Even more mobile sales.”
Alan Alanso , Marketing and PR specialist, Clay Imports Tile
“Upcycled, recycled and other eco earth-friendly choices. Additionally, more personalized shopping experiences for the customer. Live shows, product videos...keep up with the media trends.”
Cheri Fennell, Business Owner, Humanity Organics Plus
“Virtual and augmented reality.”
Amy Draper, Inventory & Online Manager, She Science
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“For me it's anything that can utilize customer data to help create more personalized experiences.”
Paul Willson, Sales and Customer Success, Opinew
"A solid marketing automation platform like Klaviyo is a superb way of growing your customer base, and having meaningful, personalised dialogue with them to engage and sell more."
Jason Stokes, CEO & Founder, Eastside Co
“Integrating videos on e-commerce sites to showcase real life users, usages but yet not cause website speed to slow down. In Asian markets (we are Singapore-based), e-commerce marketplaces like Shopee and Lazada have normalized monthly sales promotions like 9.9, 10.10, 11.11, 12.12 making consumers on the look out for promotions for value for money. Ensure margins are healthy and run tactical promotional campaigns (could include free gift with minimum spend to increase average order value while putting a time period for sense of urgency).”
Rachel Lin, Co-Founder, Mori Official
“Focusing on sustainable growth and profitability will require brands to reframe what success looks like for them. And create new strategies that support them.”
JP Arnaud-Marquez, Manager, Content Marketing, Loop
“I'd say a full retinue of video shopping tools should be part of the mix - a livestream shopping platform, live one-to-one shopping tool, shoppable video tool, and social video tools.”
Brittany Rycroft, Head of Marketing, GhostRetail
“If passive churn (people canceling because their payment method stops working) fix that--there are several tools to support that. Also, it's so important to be able to track and understand customer lifetime value.”
Robbie Kellman Baxter, Founder, Peninsula Strategies, Award Winning Author, The Membership Economy
“Flexible payment options have the crown on top. After that, any tool that helps you get to know your customers better in and out with data will be very helpful. The tools like Klaviyo and Nosto will help you better understand your customers and take actions on autopilot to nurture and squeeze the most out of what you have.”
Murat Kaya, Director of Growth Marketing & Partnerships, Shopney
“AI tools that are able to do heavy lifting for cross sell on a large number of skus would be a nice-to-have, but everyone should have a strong analytics platform as a must.”
Laura-Lee Catleugh, Senior eCommerce Manager, Noble Corporation
“In addition to witnessing a growing demand for eco-friendly products, we’re also seeing consumers prioritize purchasing from retailers that are actively making an effort to reduce waste and eliminate their carbon footprint. Some approaches that merchants can take to highlight their commitment to these goals include using recyclable / compostable packaging, using apps that give consumers the option to make their order carbon neutral, and adding a Sustainability page that outlines your mission.”
Laura Brisson, Head of Marketing & Partnerships, Fluorescent Design
“Fraud doubled in ecommerce in the past year, look to leverage tools to minimize your risk.”
Paul do Forno, Managing Director, Commerce Practice, Deloitte Digital
“Figure out not just what will get your customer to "buy as much as possible this time" but rather "what is going to build long-term engagement and trust" such that they demonstrate preference for your store, and form habits. Subscriptions can be a helpful tool in building these forever transactions but aren't the only way.”
Robbie Kellman Baxter, Founder, Peninsula Strategies, Award Winning Author, The Membership Economy
“Experimentation doesn't have to be costly or scary. Partner with vendors in the video shopping space that are there to support your experiments with hands-on guidance, and leverage your existing resources to bring video shopping projects to life.”
Brittany Rycroft, Head of Marketing, GhostRetail
“My specific advice for Shopify Merchants preparing for a successful 2023 is to offer gift cards. Even if buyers have decreased spending power, they typically buy gifts. If your product can be construed as expensive, offering gift cards in smaller denominations can help the gift recipient bridge the gap. The benefit to the merchant is 1) a free new customer they can market to 2) increased AOV over the gift card amount when the gift card is redeemed.”
Rhian Beutler, CEO, Govalo
“Chasing sustainability is the first and foremost goal of any business, and this can only happen when we focus on retention and repeat purchase. Putting customers' empathy on top is the key to retention. Putting the right experience in place helps them connect with the brand's values and sentiments. Changing the way things are perceived is the other one. Just like growth, automations are a mindset. So focussing on the right things and automating the redundant keeps you aligned towards your growth.”
“Focus on customer experience. Your parcel is your only marketing channel with a 100% open rate. This starts with the basics - make the delivery experience as easy and repeatable as possible. Quick, convenient, low cost or free. Be on time, every time. Secondly, don’t be just another brown box - how do you make the unboxing experience memorable? Custom packaging, gift notes, free product samples - all low cost, and big impact when done right.”
Matt Clegg, Senior Marketing Manager, ShipBob
“Keep a close eye on Inventory/velocity management and planning, invest in community building and referrals.”
Amer Grozdanić, CEO, Praella
“To focus on sustainable growth and profitability. We can't say it enough. And Shopify merchants can do so by intentionally tapping into Shopify's top-notch partners to optimize every step of their customers' journey. Whether that be personalized marketing, automated customer service, or self-serve return and exchange experiences, every step matters.”
JP Arnaud-Marquez, Manager, Content Marketing, Loop
“Closely review costs and unit economics in order to ensure business sustainability in a fluctuating market. Review practices to minimize carbon footprint and environmental impact, to prioritize transparency on those items.”
Kate Leadbeater, CMO, Flashfood
“Look to convert in-person purchasers into subscribers on the spot via POS systems - subscription opt-in incentives.”
Ana Curcija, Technology Partnerships Manager, Recharge Payments
“Speed to market, get your store up and running to collect data on trends first before committing to development/features you think you need. Things are changing so fast, trust the data.”
Jingting Ma, Technical Program Manager, Fabric Commerce
“BFCM post-mortem. Once the peak season is over, it's time to evaluate your customers. We're not talking about a flimsy ICP, we're talking about a proper breakdown of who your best customers are, and who you need to focus on. You can do this through RFM segmentation of your data, and classify customers into groups based on their behaviour.”
Adam Pearce, CEO, Blend Commerce
“Shopify merchants want to leverage human-led text concierge to give customers a new direct line to shop and create a new highly profitable sales channel for their business. This creates a forcing function inside their organization leading to repeat purchases, higher retention, and stickiness. Consumers don’t want to have anxiety and make a decision just based on reviews. They do tons of research online but they still buy in stores. Text concierge enables brands to bring the brick-and-mortar experience online.”
Lisa Popovici, Co-Founder & CMO, Cartloop
“Review all apps and analyze ROI, look at building brand partnerships. Track your key metrics (conversion rate, average order value, repeat customer rate).”
Nathan Lomax, Co-Founder, Quickfire Digital
“Know who your user is, what they want and what they don't want. Relevance is everything, from search to merchandising to banners to promos.”
Laura-Lee Catleugh, Senior eCommerce Manager, Noble Corporation
“Double down on your brand throughout every single customer touchpoint and lean into your unique story; it's your competitor moat and the biggest advantage you have against bigger retailers.”
Juliana Casale, Head of Brand & Community, Wonderment
“It sounds so basic but I see it all the time, just walk through a sale as if you were a customer, right the way through and place and order. What felt or looked off? These things need fixing before any grand schemes take place!”
Paul Willson, Sales and Customer Success, Opinew
“The subscription business model is certainly not a new one, but it continues to gain popularity at an incredible pace. Introducing subscription products into your catalog means not only increased predictability for your business but also higher customer retention and a high level of brand loyalty. This will be a major focus for our themes in 2023, where we’ll look to offer more advanced integrations and template options to meet the changing needs of merchants offering subscription products.”
Laura Brisson, Head of Marketing & Partnerships, Fluorescent Design
“It will be another unpredictable year with all the global issues happening at the moment. This blurry atmosphere is a great opportunity for any Shopify merchant to strengthen the bonds with their existing customers. Because it's harder for everyone to reach out to new audiences.
Doubling down on what you do the best (what keeps your customers loyal) should be the first focus. Then, moving on to fixing the other sides, the experience you provide seems very legitimate to go for.”
Murat Kaya, Director of Growth Marketing & Partnerships, Shopney
The e-commerce trends presented here are meant to paint a clear picture of what 2023 may hold for e-commerce. Shop Circle’s advice: Stay agile while focusing on the trends that put the customer at the center of everything you do.
From offering retention strategies like loyalty incentives and subscriptions, to immersive video experiences, and personalized end-to-end shopping journeys, brands have been called to go deep if they want to win the hearts, and dollars of shoppers.
We hope that by sharing expertise and advice from some of the greatest innovators across the sector, we’ve given brands the insights they need to respond to current consumer expectations and shopping behaviors, along with a clearer path towards building the shopping experiences of tomorrow.
Shop Circle recently hosted a video discussion exploring what’s happening in the world of e-commerce today, and what we can expect to see in 2023. Catch the full conversation in E-commerce 2023: Looking forward.
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