E-commerce Trends 2024 – Factors That Will Shape Your Business
2022 has passed and there were quite a few developments that, even though they didn’t necessarily change the game, certainly had a remarkable impact on the way online sellers handled their business. So, what now? Now is the time to look at these developments and see how they will form the E-commerce trends of 2023. The good news: we already did that for you and all that’s left for you to do is invest a few minutes into reading this article. Let’s go!
How E-Commerce Is Changing the Business World
Let’s take a quick look at how the sector has been doing in the past years and what awaits us in the future. Needless to say, the sector has been booming and continues to grow rapidly. We put together some key facts for sellers in Germany, the US and the global players.
In Germany, we have been seeing continuous and significant growth for a decade. Between 2013 and 2018, the Ecom market grew by 66% and by 2022 it surpassed the EUR 100 billion mark. Predictions by the IFH Cologne go so far as to say that by 2025, every fifth euro will be made through E-commerce, with a total revenue of EUR 139 billion nationwide.
The E-commerce growth statistics for the United States are more sizable than their European counterparts, which was to be expected, seeing that the largest platforms of the sector stem from the US. In the time period between 2018 and 2021, the revenue made through E-commerce went from $501.75 billion to $1.3 trillion. Yes, with a ‘T’. The number is expected to rise to $1.5 trillion in 2025 and is an indicator as to why E-commerce is the future.
The global forecasts are even more impressive: a survey by Statista puts potential sales in 2025 at EUR 2.9 trillion – an increase of around 80 percent compared to 2021.
Before that backdrop, we have to take into account that the amount of revenue made is only one important facet in e-commerce growth. Another very important factor to take into account is the question which E-commerce platform is best when it comes to selling online successfully.
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What Role Amazon Plays in E-Commerce
When looking towards the E-commerce trends for 2023, selling on Amazon is without a doubt a key factor in this regard. According to Amazon’s latest financial reports the company’s current revenue is $502.19 billion. In 2021 the company made $469.82 billion and in 2020 the company clocked in at $386.06 billion. On a global scale, Amazon alone accounts for 37.8% of the E-commerce market in the US. Due to its enormously large product range and its complementary services, the online company has been able to expand its market share globally and also remains the undisputed leader worldwide.
All this information however only offers a partial view of what you as a seller really need to be successful. While keeping revenue predictions, relevant platforms and popular product groups in mind, it is also vital nowadays to be able to provide an excellent customer experience for your target group. This is where our trends for 2023 kick in that will give you an indicator of how to grow your business.
E-Commerce Trends 2023 – As Customer-centric As Ever
We have put together four essential points for the upcoming year that will pay into your company’s customer experience and, in the long run, enable you to grow your business sustainably. First off, Omnichannel and D2C will play a key role for online retailers in the coming year. The right payment mix will increasingly become a success criterion and, last but not least, the future of e-commerce will be shaped by – you guessed it – mobile devices.
The Shift to Multi- And Omnichannel Is Real and So Is D2C
Is E-commerce growing only in one sector, or does it make sense to branch out via multi- or omnichannel? Let’s take a look at our own behavioral structure for this. For example, when was the last time you went online shopping in only one online store, looking for a specific product? The thing is, even if you find said article in your favorite online store, chances are you will still continue to search on other E-commerce platforms to see if you can either find a better deal, a faster delivery option, a better warranty, the list goes on. Most customers don’t even stop at one platform but directly scan as many as they can. As a seller, you can accommodate this trend by either selling omni- or multichannel.
The difference between the two lies in the interlinking of the sales channels. In multichannel commerce, products are offered on different marketplaces and in the company’s own online store, but there is no interlinking of the various channels. Omnichannel commerce is different. Here, all channels interact with each other. In addition, retailers often circumvent the whole commerce vs E-commerce dilemma by integrating brick-and-mortar retailing alongside online retailing if they operate retail stores.
This is nothing new to experienced sellers, so why are we addressing it here? Multi and omni-channel are part of the E-Commerce Trends 2023 because your customers are becoming more demanding. They expect the comfort of interlinked sales channels, as well as a large number of potential sales locations in online and stationary retail. All in all, if you are planning to expand your channels anyway, now is the time to do it.
In addition, the topic of D2C commerce is gaining more traction this year as well. Many manufacturers are increasingly approaching the customer directly and cutting out the middlemen (you). Retailers now have to ask themselves more and more how to bring value to the table. Viable options are providing a service, selling on marketplace like Amazon, going Private label or pursuing mixed model. Classic retail is however an unviable option for those who want to remain successful. Some experts, like Timo Weltner, founder and CEO of NETFORMIC, even go so far as to say that the classic retail model will no longer exist in a few years. A bold, but not unthinkable statement as far as new E-commerce trends go for 2023.
Flexible Payment Options Are King
The way in which customers can pay in an online store has a significant influence on the conversion rate. This has been repeatedly confirmed by various studies, most notably the ECC-Payment Study Vol. 25 by the IFH Cologne. Around one third of the questioned consumers stated that they would cancel their purchase in the online store if the top three payment methods – purchase on account, PayPal and direct debit – were not offered.
Important to note: favorite payment methods are highly dependent on the target group. If you want to optimize the offer for your online store, be sure to do your research first in regard to how your target group prefers to pay. This trend towards a broad range of payment options is not new, but will continue to be one of the most relevant in 2023 and should definitely factor into your personal E-commerce growth projections.
Mobile E-commerce Is Gaining Influence
This is not a new trend but certainly a trend that will continue to gain influence in 2023. According to various reports and studies, a significant portion of online shopping in the US is conducted through mobile devices, such as smartphones and tablets.
In fact, it’s estimated that around 69% of all E-commerce sales in the US are made through mobile devices. The trend of mobile shopping has been steadily increasing in recent years and shows no signs of slowing down.
Looking at our E-commerce trends for 2023, it’s worth noting that the exact number of people who shop using their phones in the US may also depend on various factors such as age, income, and geographic location. However, it’s safe to say that mobile shopping has become a popular and convenient option for many consumers in the US.
Making it Personal
While companies like Amazon or Shopify are doing a great job in attracting droves of customers to their platforms, it is your job to make sure they stay on your product detail page and don’t simply hop on to the next option. As far as E-commerce trends go, 2023 will require you to
- Write more detailed product descriptions. You can do that by e.g. adding in what further scenarios, apart from the one intended, your customers can use your product (a coffee mill for camping).
- Include features into your store page that make it as interactive as possible. Advanced customization options are always a great way to make your customers stick to your page. Apart from that, many sellers on Amazon are also using 3D videos or augmented reality videos to provide their customers with a better shopping experience
- Say more about yourself. Another way to add a human touch to your product detail page, especially on the huge platforms, is to include a picture and a few words explaining your vision. Especially small businesses have a lot to gain from marketing that aspect of their companies, as it is something many buyers would rather support than faceless corporations .
The Rise of Social Media Selling
With the increasing number of people using social media platforms, businesses have realized the potential of these platforms as a marketing and sales channel. Social media allows companies to reach a large and diverse audience, build relationships with customers, and drive sales through targeted advertisements and influencer marketing. With that in mind, can you blame these businesses for investing more resources into their social media selling efforts? Not really. The only question is, should you be doing the same?
PS: You should be. You definitely should.
Profitability Beats “Growth Above All”
Many companies had to close down during or in the wake of the Corona pandemic. The ones that survived took along the important lesson that we have incorporated into our E-commerce trends for 2023. Sustainable profitability may not be the sexiest element on your 2023 roadmap, but it is the one which will most likely assure that your company will be creating a roadmap for 2024 as well. This year and the following years will be driven by keywords closer to “cost analysis” and “margin optimization,” rather than “endless scalability” and “growth investment.”
For European Amazon Sellers: Second Buy Box in The EU
After the EU-Commission ruling which demanded that Amazon level the playing field for sellers, the online giant is now launching a second Buy Box in Europe. Amazon has agreed to prominently display a second competing offer through a second Buy Box to their European customers, as long as the second offer is “significantly different” from the one initially featured in the Buy Box. Once a customer selects the second offer, this offer will move into the main Buy Box. While Amazon has assured that this is only planned for Europe, the Commission’s ruling does offer a blueprint for the American Department of Justice and Federal Trade Commission (FTC). And Lina Khan, head of the FTC, is notoriously known for opposing Big Tech, as was Margrete Vestager, when she was still head of the EU-Commission.
What does this mean for Amazon sellers and what effect does this potentially have on their E-commerce growth trends? All in all, it is good news for European sellers because it opens up new opportunities for their online store to flourish, not lastly because it significantly reduces the chance of Amazon favoring their own services and products on their platform, something they have vehemently denied, but were accused of by the EU-Commission.
Final Thoughts on E-commerce Trends 2023
When looking at the E-commerce trends of 2023 in the area of strategies, flexibility will be more important than ever this year. Both in terms of sales channels and payments. When it comes to shopping, customers want to be able to choose the platform on which they make their purchases. Be it an online store, an online marketplace, via a company app or, in the case of hybrid retailers, also brick-and-mortar stores.
When it comes to payment, the relevant E-commerce insights to remember are that customers expect a wide range of payment options that are always adapted to current needs and technical possibilities. Last but not least, mobile first also applies to our E-commerce strategies and payment in online retailing. Taking these aspects into account within your strategies, will keep you well positioned for the future and give you pointers on how to grow our E-commerce business in 2023.
E-commerce (electronic commerce) refers to the buying and selling of goods and services over the internet. It encompasses a wide range of online business activities, including online retail (B2C), business-to-business (B2B), and the sale of digital products and services.
There is absolutely no doubt that E-commerce is growing. Indicators have been the increasing revenue numbers of the past years, the surge in E-commerce due to the Corona pandemic, but also the growing number. The increasing adoption of mobile devices, the availability of high-speed internet, and the convenience of online shopping are contributing to the continued growth of E-commerce.
With companies constantly being created and others closing down, it is near impossible to provide a concrete number. There are however hundreds of thousands of Ecom companies, from startups to enterprises, operating globally.
This is difficult to assess, because you have to factor in elements like the total amount of revenue generated by e-commerce, as this can vary greatly depending on the size of the business, the products or services offered, and the region in which it operates. However in the United States, E-commerce sales represented a significant portion of total retail sales in 2021, estimated at around 22.9%. Globally, E-commerce revenue clocked in at approximately $4.9 trillion in 2021, and it is estimated to reach $6.5 trillion by 2023.
Image credits: © Dilok – stock.adobe.com