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Meanwhile, discover strategies to boost conversion rates, transaction size, and customer engagement in our Idea Guide.
Meanwhile, discover strategies to boost conversion rates, transaction size, and customer engagement in our Idea Guide.
There are a million and one ecommerce trends guides for 2023. But how many of them are focused on ecommerce personalization trends?
Personalization is still paramount to creating an ideal online shopping experience, to the point where it’s not just something shoppers want, but expect. Take these recent stats for example:
All this investment in personalization isn’t for naught either; according to Google, 90% of marketers report that personalization has a significant impact on their profitability.
As experts in making a more personal experience that drives more conversions and bigger AOV a central part of the customer experience, we thought it was high time someone take a look not just at what’s trending for retailers and ecommerce brands, but how it’ll impact personalization.
Keep reading to discover some of the most impactful ecommerce trends for 2023 and ways to bring personalization to the forefront.
Trend to watch: Ecommerce merchants will increasingly move away from a reliance on third-party data and instead, focus on finding creative ways to acquire first-party data and leverage it for better personalization across all channels.
The breakdown: Third-party cookies are, in theory, still in the process of being phased out by the end of 2024, after a delay by Google to give advertisers more time to adapt and test out less intrusive ways of targeting customers.
Rather than hit a hard wall at the end of the next two years, many brands are already trying to amp up their focus on collecting and using first-party data to provide a more personalized experience.
First, a quick breakdown to understand the difference. Third-party data stitches together information from a range of sources to ‘sort’ customers into general buckets based on high level categorizations like gender or location. Ecommerce merchants have typically used this information to offer broad personalization, like serving up pink running shoes to a presumed young female shopper browsing an athleticwear store.
First-party data, in contrast, is information that shoppers actually directly provide to a merchant. By understanding exactly what each shopper wants or is interested in, brands are better able to provide tailored recommendations - the kind that drive more sales and higher baskets.
The numbers:
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Trend to watch: All signs point to social being the new medium to convert shoppers from consideration to purchasing that much quicker. With video becoming the predominant social content format (Instagram Reels, TikTok, YouTube, etc.), retailers will need to think of ways to increase video content or interactivity to shift attention from social back to their ecommerce experiences.
The breakdown:
What exactly is social shopping? Simply put, it refers to using social media platforms to research, discover, and ideally, purchase products. Social shopping involves the use of various social media features such as reviews, comments, and recommendations from friends, creators, and influencers, to inform purchasing decisions.
Platforms like Instagram, TikTok, Pinterest, and Facebook have led the charge in helping consumers discover new products, brands, and trends in an interactive way. Of course, social media influencers play a big role in social shopping, as they can showcase products in a relatable and authentic way, which ideally drives engagement and sales. Live streaming events with influencers or creators at the helm are a great way to tie actual results to influencer involvement.
Social commerce, such as Instagram Shopping, where ecommerce and social media features are integrated to enable consumers to purchase products directly from social media platforms, is also an important aspect of social shopping. This type of shopping is becoming increasingly popular as it allows consumers to shop in a more interactive, community-driven way, and allows brands to more personally connect with their customers.
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Trend to watch: Physical and digital spaces are colliding - bringing the convenience and opportunities of online shopping into the personal or tactical experience shoppers crave from visiting stores.
The breakdown:
Is phygital just another branch of omni-channel retail? Some would say yes. After all, it involves using digital technology to enhance the in-store shopping experience; or bringing together two channels in a creative new way.
But the best way to look at phygital isn’t to think of it as a ‘store of the future’ gimmick. Rather, it’s about overcoming areas of friction in the in-store shopping experience and looking to digital intervention to smooth over those speedbumps to faster conversion.
Technology such as augmented reality, virtual reality, and QR codes can create an immersive and interactive experience for customers. Merchants can also use technology to bridge the gap between the online and offline worlds by allowing customers to access online information and services while in-store. This can include online product reviews, virtual try-ons, and personalized recommendations.
Polish shoe brand Ebouwie, for example, actually created a shoe store with zero shoes on the shelves. Instead, customers could take up residence in the space’s lounge-like atmosphere and browse through thousands of styles on the brand’s site. A giant warehouse behind the retail space stored 100,000+ pairs that are promptly brought out to customers; and in the event a pair they want isn’t in stock, they can still order it for delivery on the spot.
Best Buy is another brand moving from big box locations to stores with a smaller footprint, which largely function as showrooms for select products, and a way to get guided support when browsing the brand’s vast online catalog.
Finally, phygital retailing also allows retailers to collect data on customer behavior and preferences, which can be used to improve the shopping experience and drive sales. By creating a phygital experience, retailers can provide customers with a more engaging, convenient, and personalized shopping experience.
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Trend to watch: Let’s face it: Your customers have a particular set of values and preferences that will make them more likely to shop at certain groups of stores. And if they’re not on your store, the next best thing is to target them at a like-retailer’s store. Enter retail media networks.
The breakdown:
What exactly is a retail media network? Essentially, they’re a form of advertising that allows brands to showcase their products and services to customers within a retail or digital store environment.
These networks may consist of digital displays, such as screens or kiosks located within a store or mall, or they may be digital advertising on a retailer’s site.
To use an example, shoppers on Sephora’s website may notice personalized ads at the bottom of every PDP, based on their browsing history. These ads have nothing to do with Sephora’s core product offering (beauty products), but instead, capitalize on Sephora’s massive web traffic (some 55M a month).
The biggest retail media networks, as you might expect, actually belong to the biggest ecommerce brands around - Amazon, Walmart, and Target boast some of the largest ad revenue with ad networks generating $1B+ in revenue, accounting for 25% of the total market [BCG]. In fact, more than half of top 15 U.S. ecommerce retailers have their own media networks, many of which launched during the Covid-19 pandemic.
These networks are managed by the retailer or mall owner, and brands can purchase ad space on the network to reach customers at the point of purchase. Retail media networks can be a highly effective form of advertising, as they allow shoppers to target customers at the moment when they are most likely to make a purchase.
Retailers with a retail media network also get to unlock a new revenue stream and a way to enhance the customer experience by providing useful and relevant information. Additionally, retailers can use the data collected through retail media networks to better understand their customers' behavior and preferences, and make more informed decisions about product assortment and merchandising.
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Trend to watch: It might not always be easy to be green, but it’s certainly pertinent. As younger consumers drive more economic spending, their priorities are coming to the forefront - and sustainability is at the top of that list.
The breakdown:
Sustainability in ecommerce has been on the rise in recent years, as more consumers become aware of the environmental and social impacts of their purchases. Ecommerce companies have responded by implementing sustainable practices such as using eco-friendly packaging materials, reducing carbon emissions from shipping, and sourcing products from socially and environmentally responsible manufacturers. Many brands are also transparently measuring, monitoring, and reporting on their environmental performance to identify opportunities for improvement and stay accountable to their shoppers.
It’s not just about what ecommerce companies are doing. It’s about the way they’re helping customers make a greener choice as well, by offering shoppers the option to purchase products made from sustainable materials, such as organic cotton or recycled plastic. With single-use plastics on the way out, stores are encouraging shoppers to adopt more sustainable behaviors, such as reusable shopping bags or recycling products.
The trend towards sustainability in ecommerce is expected to continue as consumers become more conscious of the impact of their shopping habits on the environment and society.
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Trend to watch: While plenty of attention is given to Gen Z and Millennials as digital consumers, Gen A is coming hot on their heels - and worth preparing for now.
The breakdown:
Generation A, also known as Generation Alpha, is known for being the most tech-savvy generation yet. Right now, Generation A is pretty young - it’s defined as those born after 2010, most of which have limited disposable income and generally need a parent to conduct any type of online shopping (unless of course, their parent has hooked up a credit card to their Roblox or Fortnite account).
But Gen A is still worth paying attention to, because their ways of shopping will directly impact their parents’ spending habits. First, recognize that Gen As are digital natives who have grown up with access to the internet and mobile devices, and as a result, are already comfortable with technology and have the highest expectations ever for both convenience and personalization.
Their shopping habits reflect this, as they heavily rely on technology and e-commerce platforms to research and purchase products. Today’s youths actively consume content on social media, like YouTube, to help guide their purchasing decisions - far more than traditional media like TV ads or flyers.
They are also known for being more conscious of sustainability and ethical considerations when shopping. The next generation is more likely to research products and brands before making a purchase (or at least, adding an item to a wish list), and are more likely to choose products that align with their values, such as environmentally-friendly or socially responsible products. Online reviews and recommendations from friends and influencers also play a significant role in their purchasing decisions. Additionally, Generation A is also more likely to engage in social commerce, where they shop through social media platforms and rely on their peers for recommendations.
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Trend to watch: Metaverse adoption will continue to grow in 2023, particularly as retailers look for new ways to connect with their customers on their terms.
The breakdown: 2022 was supposed to be the year of the metaverse, but the digital realm hasn’t quite taken off on a broad scale…yet. Let’s call this one a trend to watch, but maybe not double down on just yet.
So far, the majority of entrants into the metaverse (in particular, Roblox), have been limited to the biggest retail brands out there - like Gucci and Balenciaga. But there’s still room for ecommerce businesses of any size to start exploring the possibilities here, at relatively affordable costs.
How do you know if investing in the metaverse as a channel is worth it? Simple: Look to your audience. In general, metaverse adoption is primarily taking place with younger generations. If you have a tech savvy customer base - or ones interested in gaming (like Fortnite) - then you might just find this is the perfect channel to build exposure, and even revenue.
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While it can feel like what consumers want is a moving target, one that can be wildly influenced by a range of factors outside of any retailer’s control (hello inflation), we’d argue that what consumers want is actually pretty simple: To be treated well.
The best online customer experiences start with identifying what makes shoppers happy, and where you might be falling short. Parse through customer feedback and support queries. Look at customer searches. Review site heatmaps and behavior recordings to see where the stumbling blocks exist.
Most importantly, consider the value of a customer’s time. Attention spans and patience are short, and even the slightest hiccup or roadblock - a 404 page, slow load times, or irrelevant personalization - can be enough to send a shopper packing, possibly for good. Whenever it’s possible to make a shopper’s experience more efficient, the more likely they are to have a positive experience that’ll make them return.
Personalization, feeling like you’re paying a fair price, and easy, hassle-free policies are the three tenets of most online shopping experiences: We’ve got you covered on six ways to enhance the level of personalization based on current trends.
Stay tuned for more insights on how to personalize your site experience in 2023! Learn more about LimeSpot’s suite of personalization tools here.
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