Each month we bring you e-commerce trends, analysis, and resources so you can pilot your business to success. Check out our December edition here to stay up to date.
This month, we will identify the seven biggest e-commerce trends that will help your business over the next 12 months.
Seven Biggest E-Commerce Trends of 2023
2022 was a challenging year for e-commerce owners. Supply chain issues, high inflation, and a worsening stock market led to a volatile year for most brand owners. However, instead of focusing on the past, you should focus on how you will grow your e-commerce brand in 2023.
In this article, we identified the seven biggest e-commerce trends you should focus on in 2023.
1. Increased Reliance on Mobile
In 2021, 58% of all online traffic came from mobile devices. Luxury and cosmetic goods receive even more traffic from mobile, with 73% and 76%, respectively. With the continual advancements in smartphone technology, it should come as no surprise to expect the number of mobile visits to rise in 2023. Additionally, about 83% of all social media usage is on mobile devices.
Optimize your advertisements and online store for mobile users. With the vast majority of social media users scrolling with their phones, your advertisements and website will most likely be seen on mobile first. Therefore, you should expect poor conversions if your messaging looks bad on mobile.
2. Voice Search
Although Alexa was called a failure by top Amazon executives, a whopping 67% of smart speaker owners claim they use their smart speakers daily. Smart speakers are not only used to change the song, but can be used to change the song, but can be used to create shopping lists, order items, and conduct web searches. Data suggests that smart speakers will account for 75% of customers’ e-commerce buying decisions. With this data in mind, you should expect consumers to use more voice commands to order products online in the next few years.
It is time to optimize your advertisements and website for voice search. Also, voice search will likely provide opportunities to rank for unique long-tail keywords not available with traditional search.
3. Target Gen Z
80% of consumers aged 25 to 40 reported that they primarily shop online. Additionally, 65% of Gen Z said that they purchased something based on an influencer’s recommendations.
With the oldest members of Gen Z turning 27 in 2023, it is time to start targeting Gen Z and their newfound disposable income. In a previous e-commerce trends post, we mentioned that Gen Z is mostly hanging out on Instagram and TikTok. Therefore, a social media ad campaign focusing on Instagram and TikTok, along with influencer partnerships, will be a powerful combination to capture Gen Z’s attention.
4. Environmental Sustainability and Business Values
Millennials and Gen Z are more likely to buy from brands that share their values and make them feel impactful. In fact, 77% of Gen Z have reported taking action for a cause they believe in, and 23% have said they have boycotted a brand. Also, 73% of Gen Z have said they would pay more money for a more sustainable product.
Even though consuming a new product is not consistent with eco-conscious values, younger generations are still more likely to purchase from brands emphasizing sustainability and environmental awareness. Focus on positioning your products with keywords such as:
- Carbon neutral
- Fair Trade
- Sustainable, and
Environmental sustainability is a huge opportunity to capitalize on before the market gets too crowded
5. Video Ads
When analyzing Facebook ads, video ads were found to convert 20-30% better than ads that just used an image. Also, adding videos of your product in action to your landing page increases conversion by 86%!!
Yes, video ads are harder and more expensive to create. However, the increase in your conversion rates will more than pay for itself. You need to analyze advertisement spending in terms of return on investment (ROI). Since video ads are proven to have a better ROI than traditional ads, it is a no-brainer that you need to invest in them in 2023.
If you need help figuring out where to start, you can find affordable but quality professional help on Fiverr and Upwork.
6. Introduce Subscriptions
In this economy, recurring revenue is more important than ever. Recurring revenue will not only help you survive economic downturns, but it will also increase the value of your business should you ever decide to sell.
A subscription model offers your customers a hassle-free option for frequently consumed content and products. Subscription models are standard practice if you sell digital products like software, courses, and blog/newsletter content. It is more challenging with physical products, but there is proof it has worked for consumables like supplements, coffee, razor blades, and even clothing.
Since the investment in offering a subscription service can be small, we think every e-commerce store should offer a subscription option in 2023. For example, suppose you sell consumable products like cosmetics and protein powder. In that case, you should offer an option to get replacement products delivered each month automatically.
Now suppose you are selling one-off products like jewelry and clothing. In that case, you should offer a subscription that sends jewelry or clothing each month for a flat monthly fee. You can even create separate pricing tiers that differentiate the amount and quality of the products you send each month.
7. Buy Now Pay Later (BNPL)
Buy Now Pay Later allows consumers to get a product immediately without paying for it upfront. Instead, they pay off the product through installments over 6 to 12 months. You may have seen the two most popular, Affirm and Afterpay, while online shopping. During Black Friday and Cyber Monday, the use of BNPL services jumped 68%!
Your e-commerce brand will never be at risk of customers defaulting on their BNPL loans. Instead, you get paid immediately, and Affirm or Afterpay takes all of the risk of default. Especially with the usage surge of BNPL services, there is absolutely no reason not to integrate these payment options into your store. You are only losing out on sales if you do not.
If you address each of the seven trends we discussed, your business will grow faster than your competitors. Addressing these trends requires neither a large monetary investment nor a large time investment. However, they require you to assess where you are deficient so you can capitalize on these trends.
At Windstone Financial, we specialize in helping e-commerce brands grow their businesses through actionable advice and up-to-date financial metrics. If you are looking for a virtual CFO to help grow your business, click the button below to speak with a CPA today!