The ecommerce industry is constantly evolving, and businesses need to stay up-to-date with the latest trends and strategies to remain competitive. Here are some insights to empower ecommerce strategies in 2023:
Are we heading into a deeper recession?
As we move into 2023, there are concerns about the possibility of a US recession. A survey by Bloomberg conducted monthly revealed that there is a 70% chance of a recession in 2023, driven by a series of Federal Reserve interest rate hikes and fears of a stagnant economy. In addition, there are predictions of a rise in US unemployment, which is expected to cause more challenges in the labor market.
To remain competitive in this market, retailers are expected to lower their gross margins, which will increase the pressure on advertising spending. With consumers seeking cheaper products, retailers and advertisers are expected to offer low-priced products to gain market share. According to a report by UBS, there could be 50,000 store closures in the US over the next 5 years, and retailers such as Bed Bath & Beyond may face bankruptcy.
Based on our analysis of the economic trends in 2020 and 2022, retailers are likely to have unsold inventory that will need to be cleared during the 2023 November Holidays. Therefore, consumers can expect to see more sale ads and a drop in average pricing in shopping ads.
ng to a monthly survey conducted by Bloomberg, the likelihood of a US recession in 2023 jumped to a whopping 70% – as a series of Federal Reserve interest hikes drove fears of a stagnant economy. To make matters worse, a rise in US unemployment throughout the year has also been predicted to cause more pain in the labor market.
On the contrary, to remain competitive in the market, gross margin in retail is expected to go down. In this paradigm, pressure will rise on spending like advertising. Consumers will start scouting for cheaper products causing retailers and advertisers to provide low-priced products to win market share. Therefore, the road ahead for retailers is going to be bumpy. Per UBS analyst report, 50,000 store closures in the US is expected over the next 5 years. News of mega-stores like Bed Bath & Beyond potentially going to bankruptcy has emerged.
Based on our 2020 and 2022 economic analysis, retailers most likely will have unsold inventories to clear during the 2023 November Holidays. That said, consumers will see more SALE ads over special promotions, alongside noticing a drop in average pricing in shopping ads.
Tips for 2023 ecommerce strategies
Despite the bleak outlook, retailers utilizing marketing intelligence for their pricing, advertising, and promotions will most likely survive and gain an edge in 2023. Here are a few tips for retailers and advertisers to succeed in 2023 –
- Personalization: Personalization is all about tailoring the shopping experience to the individual customer. This includes using data and analytics to recommend products based on a customer’s browsing and purchase history, location, and other factors. Personalization can also include personalized email campaigns, personalized landing pages, and even personalized product bundles. The goal is to make the customer feel like the ecommerce business understands their needs and preferences, which can lead to increased loyalty and repeat business.
- Mobile Optimization: Mobile commerce is rapidly growing, with more and more consumers using their smartphones to make purchases. To optimize for mobile, ecommerce businesses should focus on creating responsive design that adjusts to different screen sizes, reducing page load times to prevent frustration, and simplifying checkout processes to make it easy for customers to complete a purchase on a mobile device.
- Voice Commerce: With the rise of voice assistants like Siri and Alexa, voice commerce is becoming more popular. Ecommerce businesses can optimize for voice by making sure their product descriptions and search terms are easy for voice assistants to understand, and by offering voice-enabled purchasing options.
- Artificial Intelligence: AI can be used in a variety of ways to optimize ecommerce strategies. For example, chatbots can be used to provide customer service and answer common questions, which can free up human customer service agents to handle more complex issues. AI can also be used to personalize product recommendations and optimize pricing strategies based on customer behavior.
- Augmented Reality: Augmented reality can provide an immersive shopping experience by allowing customers to see how products will look in their homes or on their bodies. For example, a furniture retailer could use AR to let customers see how a couch will look in their living room, or a clothing retailer could use AR to let customers try on outfits virtually.
- Sustainability: Sustainability is increasingly important to consumers, and ecommerce businesses need to prioritize sustainability in their operations. This can include using eco-friendly packaging, partnering with sustainable suppliers, and offering eco-friendly product options. Businesses that prioritize sustainability can build a loyal customer base that values their commitment to environmental responsibility.
- Social Commerce: Social media platforms are increasingly offering ecommerce features, such as product tagging and buy buttons. Ecommerce businesses can take advantage of social commerce by using social media to promote products, partnering with influencers to reach new audiences, and offering social media-exclusive discounts to drive sales. By using social media strategically, ecommerce businesses can reach new customers and build brand awareness.
By implementing these insights, ecommerce businesses can improve customer experiences, increase sales, and stay ahead of the competition in 2023.