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2023 Ecommerce Personalization Trends

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:

  • 71% of shoppers expect personalization; and 76% get frustrated when it doesn’t happen [McKinsey]
  • 49% of shoppers say they’ll become a repeat buyer after a personalized shopping experience with a brand [Twilio]
  • ​​73% of shoppers expect companies to understand their unique needs and expectations [Insider]
  • 83% of consumers are willing to share data with brands to receive personalized experiences [Accenture]
  • 89% of marketers are investing in some form of personalization [Forrester]

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. 

First-party data / Owned audiences

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:

  • 84% of consumers say being treated like a person, rather than a number, is very important to earning their business. [Salesforce]
  • 92% of marketers believe it’s critical to understand what consumers want by continually building a library of first-party data [Google]
  • More than 3 out of 5 shoppers expect personalization when they shop [Adweek]

Make it personal:

  • Offer real incentives for customers to proactively share data: Offer surveys or quizzes to tailor the site experience with custom content, images, or product suggestions.  
  • Leverage multiple channels for personalization: Make sure you’re offering a tailored experience beyond the website. Try sending personalized emails or text messages with product recommendations specific to each customer’s interests.
  • Let customers self-segment; give them the opportunity to choose what type of site experience they want. For example, RH, an upscale American home-furnishings company, has entire subsites dedicated to different decor styles; Benjamin Moore lets contractors, designers, and consumers experience unique sites, and so on. 
  • Try a chatbot: Offer customers a helping hand to find what they’re looking for, and use that data to tailor their site experience from there. 
  • Consider second-party data as another shortcut to personalization; team up with a trusted partner to share data (with consent) and build a better experience.

Social Shopping

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.

The numbers:

  • The global social commerce market is valued at $113B; this figure is expected to increase by 700% by 2027 [Retail Insider]
  • The apparel sector has the largest market share of 21.69% [Grand View Research]
  • 36% of online consumers are expected to make at least one social commerce purchase per year [Insider Intelligence]
  • In 2021, $37 billion in goods and services were purchased through social-commerce channels [McKinsey]

Make it personal:

  • Leverage influencer marketing to create personalized content that aligns with customer preferences
  • Use social media listening and monitoring tools to understand customer sentiment and engage in relevant conversations
  • Create personalized landing pages, microsites, or tailored site journeys based on shoppers arriving on your site from social media campaigns, channels, or events 
  • Provide 1:1 live shopping support over video on-demand or via appointment to drive more conversions 

Phygital

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.

The numbers:

  • 70% of shoppers say the ability to shop in-store is important [Google]
  • ​​The global smart retail technology market is expected to grow from $22.6 billion in 2021 to $68.8 billion by 2026, growing at a CAGR of 24.9% over this period [Mobindustry]
  • 37% of consumers state that they prefer technology to be integrated into their physical in-store journeys [Shopreme]
  • 48% of US internet users believe scan-and-go technology would make shopping easier. [Insider Intelligence]

Make it personal:

  • Create an omni-channel experience that leverages online customer data for a more personalized in-store experience, and vice versa; after a customer shops in-store, update their online preferences to reflect their latest purchases
  • Introduce kiosks or fitting room screens with QR code readers to recommend complementary products to an item a customer is interested in
  • Encourage customers to use their mobile devices while in-store to access information, make purchases, and get real-time recommendations
  • Use beacon technology to send personalized notifications and offers to a customer based on their location within a store

Retail Media Networks

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.

The numbers:

  • In 2021, more than 23,000 businesses have spent more than $3 billion on retail media [MediaRadar]
  • 62% of CPG brands’ main motivation to work with retail media networks was to gain access to a retailer’s first-party data. [Loyal Guru]
  • The margins on retail media are 70-90%; significantly higher than actual product sales [BCG]

Make it personal:

  • Use data from retail media networks to tailor the site experience based on what ads a customer engages with
  • Build more relevant campaigns using first-party data collected from retail media networks
  • Connect with retailers that offer retail media networks to consider a co-branded initiative 

Sustainability

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.

The numbers:

  • 53% of companies identified sustainability as a top priority in 2022, including improving the manufacturing process and using more sustainable packaging [Shopify]
  • 72% of respondents said they buy more environmentally friendly products than five years ago, and 81% said they expected to purchase more over the next five years [Rock Technolabs]
  • There has been a 71% rise in online searches for sustainable goods globally over the past five years [WWF]
  • 42% of online shoppers would choose brands depending on sustainable packaging they might offer [Statista]
  • 66% of consumers would pay more for sustainable products [Goodcarts]

Make it personal:

  • Segment customers showing an interest in sustainability and present tailored content and products with a green focus
  • Retarget green-minded customers with sustainability-focused advertising
  • Create a collection of green products and spotlight it as a featured collection throughout the site 

Gen A

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.

The numbers:

  • One in five (18%) children aged 6-16 surveyed said specifically they would prefer to buy products from sustainable sources that weren’t made from or packaged in plastic [Wunderman Thompson]
  • $500+ billion in purchases are influenced by children under the age of 12 [Spectra]
  • Generation A’s average expected delivery time (2.23 days) is a good 25% lower than the 2.93 days expected on average by adults. One in five under-16s say they will never buy from an online source that can’t deliver the next day [Wunderman Thompson]
  • 46% of US and UK kids under 16 have direct access to an Amazon Prime account, and it’s their favourite place to spend money [Spectra]

Make it personal:

  • Consider customized content or a tailored site experience for generation A; put content, facts, and missions regarding sustainability and inclusivity front and center
  • Meet Generation A where they are; offer targeted products, messaging, and opportunities to shop your brand on popular platforms frequented by this group
  • Look at voice commerce; a popular medium with children, and present tailored offers or new products a customer might be interested in 
  • Stay on top of new social channels and experiment with personalized advertising for young people that are typically the first to flock to new mediums

The metaverse

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.

The numbers: 

  • 56% of consumers are aware of the metaverse; just 8% have tapped into it [KPMG]
  • Estimates suggest 75% of the global population will use AR frequently for shopping by 2025 [Whiplash]
  • The ecommerce metaverse market is projected to grow at a 39% CAGR between now and 2027 [Technavio]

Make it personal:

  • Sync game data with inventory to suggest products most relevant to those customers
  • If producing a collection of virtual products, recommend specific products based on the customer’s demographics
  • Consider in-game or in-metaverse advertising; don’t think of pop-ups, but instead, integrated targeted advertising that suits the atmosphere of where the user is (ex: branded posters on the wall of a virtual space) 
  • Join in the fun - the metaverse follows some of the same tenets of Reddit; the more integrated you are, the more likely your messaging and offer will resonate. Set up profiles and interact with metaverse communities to drive better results
  • NFTs are indeed part of the metaverse stack; if you’re going to offer them, find ways to make them personal to the customer base buying them

Conclusion

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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