The shifting landscape of today’s retail economy has seen in-store shopping shift to digital commerce. So what e-commerce trends can online retailers expect in 2023?
While Mena shoppers are returning to brick-and-mortar stores, e-commerce habits are now deep-set. Majid Al Futtaim reported this week the continued sharp rise of retail e-commerce, with sales forecasted to increase by 22 per cent this year, exceeding $6bn and putting the market on course to reach $9.2bn by 2026.
Online retailers must double down on trends that took off during the pandemic, while keeping an eye on evolving consumer expectations and preferences.
Overview: top online trends and influences
The top 2023 e-commerce trends and influences retailers must account for are:
- Omnichannel
- Mobile shopping
- Social commerce
- Customer service
- Inflation increase
- Sustainability
- Re-commerce
- Personalisation
- Subscription commerce
- Omnichannel
Although the e-commerce boom may be slowing down, customer expectations remain high. As shopping habits return to real-life and brick-and-mortar stores rebound, 2023 is the year brands must optimise omnichannel.
Hani Weiss, CEO of Majid Al Futtaim Retail, said: “Despite the recent e-commerce boom, we are witnessing transformations across retail’s physical stores. We’ve seen three times growth in our omnichannel customers, and the share of omni customers in our base vs. single-channel customers has increased by four times,” reports Fast Company Middle East.
Commenting on the Mena retail industry, Rodrigo Castelo, vice president MEA at OutSystems, said: “One of the ways retailers can provide more personalized experiences for customers is through developing apps or portals that create omnichannel experiences,” reports Fast Company Middle East.
Almost 75 per cent of buyers use multiple channels before purchasing, and 73 per cent of e-commerce consumers report using various channels during their customer journey, according to 99 Firms.
Shopping journeys don’t end – or often start – on a company or brand website.
Brands with both digital and physical locations should eliminate any friction as shoppers channel and platform-surf.
Fulfil 2023 e-commerce trends in omnichannel by:
- Providing flexible fulfilment and return options
- Enable in-store associates to access customer account details to provide better service
- Ensure in-store inventory is reflected in real-time online
- Invest in AR and other immersive technologies to create a more natural shopping experience online
Brands that deliver effective, omnichannel shopping experiences will continue to thrive in 2023.
2. Mobile shopping
Mobile will be a massive driver of sales for e-commerce in 2023.
Enabling customers to shop via their mobile devices is now an expectation.
Seventy-two per cent of UAE in-store shoppers would use their smartphones to enhance their shopping experience, according to ‘The 2022 Global Shopping Index: UAE Edition’ survey by PYMNTS and Visa Cybersource.
Consumers pick m-commerce (mobile commerce) again and again as their preferred channel for shopping. By 2024, global retail m-commerce sales are expected to reach nearly $4.5 trillion to make up 69.9 per cent of total retail e-commerce sales.
Brands must design mobile-first experiences, offer phone-friendly payment options, such as Apple Pay and Google Pay, and make mobile checkout easy.
M-commerce is projected to accelerate in the next few years, as the UAE retail mobile-commerce market is expected to grow by 19 per cent by 2025.
3. Social commerce
Social commerce is the use of social media platforms to promote and sell products and services. It will play a massive role in 2023 e-commerce trends.
Consumers rely tremendously on their social feeds for shopping, suggestions, and simple e-commerce sales. According to a Q3 2022 Consumer Trends Report by Jungle Scout, 48 per cent of consumers are now likely to purchase directly from TikTok.
Gen Z, in particular, uses TikTok for search and product recommendations – more so than Google.
Whether or not you decide to sell directly through social, don’t skip these channels in your e-commerce strategy.
Social commerce is critical for brands to reach their target audiences, and is expected to generate $30.73b in sales in 2023, accounting for 20 per cent of global retail e-commerce sales.
4. Customer service
Since customer service is often a buyer’s only point of contact with an online business, retailers should make it a priority.
When customers want information about choosing a size, tracking a shipment, or requesting a refund, they want help – quickly. Brands must make it easy for them to find help on their preferred channel, whether over the phone, on social media, or live chat.
Chatbot technology is advancing fast, and some experts see them playing even bigger roles in the online shopping experience with more personalized service and product recommendations.
Twelve per cent of UAE consumers also want meaningful interactions with brands, reporting that entertainment and store surroundings add value to shopping experiences, according to the Shape of Retail 2022 Report by global services firm Alvarez & Marsal in partnership with market consultancy firm Retail Economics.
5. Inflation
Inflationary issues and cost of living concerns will likely last into 2023, meaning that tightened budgets will impact online spending.
Out of 2,200 shoppers surveyed in Saudi Arabia and the UAE, more than half are cutting back on their spending, according to a report by management consulting firm McKinsey last September.
When financial anxiety is high, shoppers need extra assurance.
The two best tools for assuaging consumer anxieties are flexible returns and budget-friendly options.
Although returns can be costly, having a flexible return policy means that shoppers will return products regardless of whether or not you make it easy. A strict or complicated process won’t stop them from returning their products, rather it will stop them from returning to your business.
Of regular shoppers in brick-and-mortar stores, 49 per cent selected reliable guarantees and return policies as found in Visa’s 2022 Stay Secure survey last August.
Alternatively, budget-conscious options are another way to keep bottom lines stable amidst financial insecurity.
Basic subscription packages (such as streaming services with ads) allow customers to continue engaging when they otherwise may have stopped completely. It also helps build goodwill that will ultimately foster long-term brand loyalty.
6. Sustainability
Green commerce is on the rise and sustainability sustains businesses. Even amidst financial fears, consumers are willing to spend more to buy from sustainable brands.
Fifty-two per cent of consumers say the pandemic made them value sustainability more.
On June 1, Abu Dhabi became the first GCC city to ban single-use plastic bags. In July, Dubai imposed a green-conscious policy, mandating a tariff of 25 fils for each plastic bag sold.
Sites that offer more eco-conscious shopping experiences (from products to their fulfilment practices) are gaining popularity.
Brands can embrace their greener sides by:
- Selling products made with more sustainable materials
- Investing in more environmentally-friendly packaging materials
- Allowing users to choose more sustainable shipping options (for instance, “Ship all items together in one package, rather than sending them as they become available”)
- Making it easy for people to recycle items or shop pre-owned items directly from your site
7. Re-commerce
By 2025, the global fashion and apparel industry is predicted to exceed $1 trillion according to data from Finaria.
Re-commerce (reverse commerce), the selling of pre-owned products, will play a much bigger role when it comes to 2023 e-commerce trends as sustainability becomes an essential element when it comes to deciding to purchase from a brand.
For instance, Cartlow, a technology platform operating in the UAE and KSA founded as a re-commerce platform. Cartlow’s main focus is sustainability and being 100 per cent environmentally-friendly by supporting the reduction of carbon emissions.
Future generations are making purpose-driven purchases, and having a world left to live in is a big motivating factor for them.
8. Personalisation
Personalisation is a deciding factor for brand loyalty.
Most consumers crave a brand that knows them well enough to personalise shopping experiences. In fact, a majority of people will pay more to businesses that offer personal touches that appeal to their specific tastes.
Companies that recognise each customer as a distinct individual with unique needs and accordingly customise their engagement with them are realising 40 per cent more revenues than those who do not.
Syed Rahim, senior director of customer success for Southern Europe and MEA at Algonomy, told Gulf News, “Ideally, brands should have a single view of the customer across multiple channels to generate behavioural data about their habits and preferences. What if a brand could serve uniquely personalised data into their mobile phones while they’re in a brick-and-mortar store shopping for groceries and clothing?”
Content should be personalised for the customer across all channels. This means engaging them on the channels they prefer and supporting customers throughout their entire journey with personalised offers.
9. Subscription commerce
Winning new customers can be expensive and time-consuming, yet the goal of any business is to maintain long-lasting customer relationships. 2023 e-commerce trends point toward subscription commerce gaining importance.
Digital sellers and online marketplaces using subscription models are driving up retention and a steady, predictable stream of income, benefitting their cash flow.
The global subscription e-commerce market is expected to exhibit a CAGR of 68.40 per cent between 2022 and 2027 according to a report published by IMARC Group.
The subscription commerce model eliminates manual ordering and delivery, making purchases seamless for customers that have favourite or repeat products.
With the right business and fulfilment models in a subscription commerce strategy, revenue will certainly grow.
