Customers are increasingly prioritizing convenience and an easy shopping experience, and the eCommerce market is growing significantly as a result. Not only has this shift allowed companies to enhance purchasing efficiency and meet customers’ growing demand to shop with ease, but it has also opened a much wider customer market.
The global eCommerce market is approximately $6.3 trillion as of 2023, and the U.S. eCommerce market alone is projected to reach over $1.1 trillion in sales in 2023. A lot of this growth can be attributed to the pandemic and the widespread transition to a more hybrid workplace and lifestyle. Customers are working more from home, and the convenience of ordering products and services online caters to that change. It’s estimated that 16.4% of U.S. retail purchases are expected to take place online in 2023.
In this piece, we outline some of the key trends in the growing eCommerce market and how changing customer demands and expectations are coming into play for 2023 and into 2024.
2023 eCommerce Trends for Retailers
Trend #1: Balancing the Need for Personalization with Privacy Concerns
The use of eCommerce platforms offers retailers an opportunity for personalization. Retailers can provide a shopping experience that caters to individual wants and needs and that a customer can relate to. Customer demand for a personalized experience is growing as it establishes individualization, from product suggestions catered to the customer’s specific interests to brands, like ASOS diving into visual search capabilities, giving customers the ability to find style matches to clothes they may already own.
Personalization of a retail experience is no longer just a bonus; it’s an expectation, with 45% of customers saying that without personalization, they’ll most likely take their business elsewhere. Retailers must provide individualization to maintain their customer base, and customized eCommerce can aid in building brand loyalty.
However, a balance needs to be struck between achieving personalization and maintaining customer privacy. In tandem with growing expectation for personalization is the growing customer demand for data transparency and privacy. In a data privacy study, 80% of shoppers noted that protecting data and maintaining online privacy is “very important.” Many participants also mentioned that they will abandon online purchases when they have concerns about privacy. That said, customers aren’t fully opposed, however, to sharing data with retailers. In fact, many customers are willing to share a greater amount of personal information if sites allow customers to update their own information and better communicate what data was being collected.
Retailers should also keep in mind that a personalized shopping experience can still be provided without over-collecting customer data. For example, it’s usually unnecessary to collect personal identifiable information (PII) or track exactly what customers do on your site. Data that seeks to understand what the customer’s purpose is in visiting the retailer online, as well as what they want out of the company, is usually less invasive and still proves beneficial to personalization. Retailers can use this information to suggest products and provide special deals related to exactly what the individual customer desires. This can encourage customers to feel welcomed by the company and further develop brand loyalty.
As customers and retailers alike become more familiar with eCommerce, there’s an expectation of data safety and customer privacy. Simultaneously, there is an assumption that retailers will be able to anticipate needs and personalize products and offers at a greater rate. Striking the right balance will ensure that retailers stay in touch with their customer base in this growing market.
Trend #2: Improving and Pivoting Social Commerce Strategies
With the rise of eCommerce, as well as the growing usage of digital social media platforms, social commerce has become increasingly prominent as a means of accessing online retailers. Social commerce is the concept of using social media to purchase from eCommerce businesses from start to finish. Often this entails customers viewing product advertisements on social media and clicking a link that takes them directly to the purchasing page. This creates an incredibly convenient purchasing experience, as customers can discover and buy products without leaving the platform.
However, social commerce has been less successful in 2022 than projected. While the ability to purchase products on social media is convenient, customers often have less trust in purchases made off the original retailer’s site. As a result, major platforms such as Instagram, Facebook, and TikTok are reducing their investment in growing social commerce.
To improve existing social commerce strategies, companies will need to increase transparency with purchase elements, such as product refunds and replacements, order tracking, and reviews from other customers. 48% of surveyed customers were concerned that purchases made off social media wouldn’t be protected or refunded. An increase in transparency can help to prove the legitimacy of companies and orders as well as boost trust in the use of these platforms. Continue reading by downloading the full report below.
Read last year’s Consumer Products Trends Report here.
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Contributions by Sam Weitzel