3 E-Commerce Trends To Watch In 2023
Shopify’s Michael Keenan recently reported, “Two years ago, only 17.8% of sales were made from online purchases. That number is expected to reach 20.8% in 2023, a 2 percentage point increase in e-commerce market share. Growth is expected to continue, reaching 23% by 2025, which translates to a 5.2 percentage point increase in just five years.”
1. Increased Efficiency of Data Labeling for Machine Learning
Personalizing a customer’s online shopping experience is crucial to increasing online sales and bolstering e-commerce success. Machine learning is used to enhance customer experience through improved search, tailored recommendations, and more. However, few know that ML in e-commerce is only as good as the data it’s trained on.
Any ML product requires three components: hardware, algorithms, and data. While the first two are readily available and generally present no obstacles, gathering high-quality data to train ML models remains a challenge. Data labeling powered by human insight is one way that companies may use to better train ML applications.
“Search quality is one of the major trends we are seeing in e-commerce,” CEO at Toloka, Olga Megorskaya said. “Online marketplaces and retailers are discovering that up to 5% of gross merchandise volume depends on the quality of product search and recommendations.”
To improve search results, Megorskaya recommends companies train ranking algorithms and evaluate search quality compared to competitors. However, these complex machine learning processes rely on human judgments of search relevancy.
2. The Rise of Social Commerce
Social media platforms are becoming an increasingly important part of the e-commerce landscape as consumers use them for discovery, research, and even purchasing. Companies will need to incorporate social media into their e-commerce strategies to reach and engage with consumers.
According to The Future of Commerce, “Global sales via social media platforms were estimated at 992 billion U.S. dollars in 2022, and forecasts suggest that social commerce sales will reach around 2.9 trillion U.S. dollars by 2026. Social commerce is critical for brands to reach their target audiences, and is expected to generate $30.73 billion in sales in 2023, accounting for 20% of global retail e-commerce sales.”The Future of Commerce also reports that Gen Z customers use TikTok more than Google to find product recommendations. For brands seeking to target these audiences, using TikTok is vital.
Incorporating an influencer marketing strategy is another way to leverage the benefits of social commerce. Working with an influencer allows businesses to engage with pre-qualified customers. This strategy can increase engagement and conversion rates. Social proof from social media influencer marketing campaigns often turns leads into sales.
3. Expanding Omnichannel Capabilities
Being multichannel means businesses must be able to sell to and communicate with customers through multiple channels at any given moment. This may look like having a website, Facebook shop, and an Instagram account. Omnichannel is the next level up—and it’s the future of e-commerce. Currently, 52% of e-commerce sites have omnichannel capabilities.
Building omnichannel capabilities into an e-commerce site requires an intimate understanding of the consumer audiences. Creating a seamless experience is what often causes a customer to return. In fact, companies that have robust omnichannel strategies retain almost 89% of their customers. However, the reverse is also true. Companies with weak omnichannel strategies have a 33% customer retention rate.
“The power of true omnichannel is understanding all the channels our customers use, and how they want to use them, throughout their entire journey,” said Ferguson Enterprises Chief Marketing Officer, Victoria Morrissey. “If you don’t understand what that journey is, you can’t provide the right information at the right time.”
Strong omnichannel strategies do more than enhance the experience of online shoppers. According to McKinsey, the more channels a sales company has, the more market shares a company gains.
Paying attention to these growing trends can help business’s bottom line, which is increasingly important in today’s competitive market. Staying aware of upcoming changes can also ensure you’re not left behind.
Courtesy of Forbes – full article here