As the Danish proverb goes, “it’s difficult to make predictions, especially about the future”. Future-forecasting is particularly challenging in e-commerce, where rapid change is a constant. When you are in the eye of the storm, how can you possibly see the blue sky ahead?
Nevertheless, zoom out and a bigger picture emerges of five key trends in what VMLY&R COMMERCE has dubbed the year of the “Creative Commerce Revolution”. Like all revolutions, there are opportunities and rewards to be seized by fast-movers and creative thinkers. According to Statista, worldwide retail e-commerce sales will soar from about USD $5 trillion in 2021 to just over USD $8 trillion in 2026.
So, what should you be watching out for, in the coming year and beyond?
The Shop Window Will Get Smaller: M is the New E-commerce
– The expectation for mobile commerce is growing day by day. Consumers pick m-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 and make up 69.9% of total retail e-commerce sales.
-Given that smartphones drove 50% of e-commerce sales on several key days during the recent US holiday season, that means designing mobile-first experiences.
-Mobiles are no longer for phoning people (!); they are for multi-screening, shopping, and ensuring connectivity 24/7. Brands that want to stay in the game need to embrace this mobile-first mentality.
-As part of this reality, brands need to bake in flexible fulfilment, in-store inventory, and VR/ AR alongside immersive technologies to build mobile creative commerce experiences that convert.
Social Will Be Far More than Media
-Social commerce is anticipated to grow at 30.8% per annum from 2022 to 2030 – rising from USD $724 billion to USD $6.2 trillion.
-Brands will increasingly use social commerce for mental, physical, and digital availability. Social commerce and apps like Instagram, TikTok, Snapchat, Spotify, and Facebook will offer more user-generated, peer-endorsed suggestions from influencers, as well as buying options that make it easy to purchase.
-Livestreaming on social will continue to rocket ahead in the East, and gradually take off in the West.
-It will be important to develop platform-specific commercial content – Facebook is a very different beast to TikTok, for instance.
-Consumers will rely even more on their social feeds for shopping, suggestions, and simple e-commerce sales. Over half of Gen Z and millennials already make purchases on social.
Brands Will Put the Retail Back Into Retail Media
-Retail media is the big story in media globally, accelerating at 82% growth year on year. In the “good old days”, retail media was part of the negotiation between product sales team and retail buyer. As we move into 2023, however, we have an incredibly fragmented ecosystem that includes thousands of “opportunities” for impact and purchase. Retailers are now media channels. And media channels are now retailers.
-It gets even more complex because retail media tends to exist within “walled gardens”, and beyond the walls, advertisers are preparing for a cookie-restricted future.
-Brands will need systems that automate processes and work at speed, and an open and unbiased platform that covers digital operations, digital shelf, and media. Brands require integrated teams from leadership to design to delivery, that obliterate the old lines between marketing, sales, agency, and retailer – and those teams need to have instant access to relevant data. And brands need partnerships in place, and a buying engine that can execute at scale and respond with agility.
-A helpful reframing of retail media in 2023 is to think about it not as media at all. Instead, brands should consider the experience of a placement or activation, and not just focus on a single moment, but points in a customer journey, which build towards a transaction.
Sustainability Will Be Central: it’s Good for the Planet and Profits
With the circular economy rising day by day, 52% of consumers say they are willing to spend more to buy from sustainable brands. In 2023, making a circularity strategy mission-critical to business will be good business, not only for the planet but also for profits.
In the Face of Recession, Barriers to Purchase Will Be Torn Down
With the world on the brink of an impending global recession and the impact of global inflation caused by the energy crisis, COVID and the ongoing war in Ukraine (sorry to be a downer), consumer discretionary spending will likely continue to fall throughout 2023 due to shoppers being ever more mindful about their purchases.
With 92% of consumers likely to purchase from a brand with an easy return process that has created good-will and long-term loyalty, it is critical for brands to think about building flexibility into the payment process and budget-friendly return options. Younger generations value flexibility for payment options including mobile wallets, and platforms such as PayPal will continue to revolutionize point-of-sale payments on new channels like social.
So that’s my forecast: cloudy but with some bright spots! No-one really knows what will happen, but I for one will be following Steve Jobs’ advice: “the best way to predict the future is to invent it”. That’s the beauty of a creative commerce approach. Brands that continue to embrace commerce channels as a space for creativity will win the day this year.
- Gemma Spence is Global VP Transformation at VMLY&R Commerce
Originally published in Brandberries