[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/02\/how-to-improve-e-commerce-profits-2023\/#BlogPosting","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/02\/how-to-improve-e-commerce-profits-2023\/","headline":"How to up your e-commerce game for profitability in 2024","name":"How to up your e-commerce game for profitability in 2024","description":"To improve e-commerce profits, brands need to shift their e-commerce strategy from growth at any cost to one of sustainable revenue. ","datePublished":"2023-02-02","dateModified":"2024-01-10","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/contributor\/brent-cohler\/#Person","name":"Brent Cohler","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/brent-cohler\/","identifier":708,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/1c02ae1cfea07e3d8b231ea24acf12e03678bb86dfac902664d8c111978c7771?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/1c02ae1cfea07e3d8b231ea24acf12e03678bb86dfac902664d8c111978c7771?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"The Future of Commerce","logo":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","width":172,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/02\/How-to-improve-ecommerce-2023_FTR.jpeg","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/02\/How-to-improve-ecommerce-2023_FTR.jpeg","height":375,"width":1200},"url":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/02\/how-to-improve-e-commerce-profits-2023\/","video":[null,{"@type":"VideoObject","@id":"https:\/\/i.vimeocdn.com\/video\/1595847994-b7ef93cbd17552b93c613e3f31e50a6f7437bb7f40945bae18cf8bca4ad07521-d_295x166?region=us","name":"Top Commerce Trends for 2023 and Beyond","description":"Get ready for the future of commerce with our latest video, \"Top Commerce Trends for 2023 and Beyond.\" We've gathered insights from digital commerce experts, including our trusted partners and influencers, to provide you with a comprehensive overview of the trends, challenges, and changes you can expect in the coming years. From general trends to B2B and B2C topics, we've got you covered. Don't miss out on this valuable information to better prepare yourself for the ever-evolving world of commerce. Watch now and stay ahead of the game!","thumbnailUrl":"https:\/\/i.vimeocdn.com\/video\/1595847994-b7ef93cbd17552b93c613e3f31e50a6f7437bb7f40945bae18cf8bca4ad07521-d_295x166?region=us","uploadDate":"2023-01-25T18:48:27+00:00","duration":"P0DT0H6M9S"}],"about":[{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/","name":"Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Commerce","http:\/\/www.wikidata.org\/entity\/Q26643"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/commerce-general\/","name":"Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Commerce","http:\/\/www.wikidata.org\/entity\/Q26643"]},"Commerce Cloud",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/e-commerce\/","name":"E-Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/E-commerce","http:\/\/www.wikidata.org\/entity\/Q484847"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/e-commerce-solution\/","name":"E-Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/E-commerce","http:\/\/www.wikidata.org\/entity\/Q484847"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/e-commerce-solution\/e-commerce-general\/","name":"E-Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/E-commerce","http:\/\/www.wikidata.org\/entity\/Q484847"]},"Future of Grocery Retail","Retail Industry","Retail Trends, Data, News",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/sales\/revenue\/","name":"Revenue","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Revenue","http:\/\/www.wikidata.org\/entity\/Q850210"]}],"wordCount":829,"keywords":["2023 Trends","Commerce Experience","Digital Commerce","E-commerce Returns","E-commerce Trends","SAP Commerce Cloud"],"articleBody":"I’m guilty of \u201cbracketing.\u201d I bet you are too. I frequently go online and purchase the same item in multiple colors and sizes.When buying shoes for a fickle four-year-old, there’s no other option. Physical stores just don\u2019t carry enough inventory. Our search requires an online aisle of endless options.So every four to six months, we embark on an online journey to discover that unicorn pair of shoes that’s both fantastically fashionable and comfortably cozy. One will inevitably be too tight, and another, the wrong shade of pink. Therefore, we order multiple sizes and colors, knowing that the mountain of castoffs can easily be returned, for free.This type of behavior has become a nightmare for retailers and is one of many e-commerce phenomena that has led to an erosion of profitability.A 2022 survey by Narvar found that 63% of shoppers bracket their online purchases, leading to higher shipping costs (both outbound and inbound), a drain on labor, and product shrinkage when the returned items are never are resold.      How to increase profitability: 5 best strategies for growth                The best strategies to increase profitability include omnichannel experiences, keeping a handle on delivery and returns, and a connected CX.      The old game: Capture market share at any cost According to a McKinsey & Company report, \u201cGetting to breakeven in e-commerce has proved elusive for most companies because of its tremendous complexity: retailers must connect the dots between growth and cost levers and align incentives across the organization.”Looking back to the early days of e-commerce, today\u2019s challenges should be no surprise \u2013 brands need to focus on what it really takes to improve e-commerce profits in 2023.Brands initially rushed to gain their share of e-commerce commerce growth at any cost. Free shipping, low pricing, and easy returns became the norm.During this time, e-commerce technology was primarily focused on growing top-line revenue through front-end enhancements such as flashier user interfaces and smoother checkout flows.So, where do retailers go from here?      The high cost of e-commerce returns: A trillion dollar problem                Marketing metrics often overlook the high rate of e-commerce product returns, which is extremely costly to retailers. As global e-commerce continues to grow, the amount of returns is expected to cost retailers more than a trillion dollars a year.      The new game: Sustainable & profitable e-commerce\u00a0U.S. e-commerce sales now account for 15% of total retail sales, and companies can no longer afford to sacrifice margins associated with this increasingly important channel if they want to improve e-commerce profits.In fact, a recent Oxford study revealed that 63% of retail executives believe that increasing margins and profitability is a top strategic priority for their digital commerce business.This content is hosted by a third party ( vimeo.com ).To view the content, either update your cookie preferences or view it in a new browser window.Cookie PreferencesNew WindowNow, brands need a digital commerce platform that can help them deliver profitable revenue. However, it requires much more than just a great frontend shopping experience. When evaluating technology, brands must up level their expectations.Generating revenue at any cost is no longer acceptable. Generating profitable revenue is key to success.Re-imagining the shopping experience: How to improve e-commerce profitsLet\u2019s imagine how this new approach could revolutionize my shoe shopping experience, boosting my loyalty and customer lifetime value to the brand, while increasing the profitability of each transaction.Personalize the experience with enterprise-wide data \u2013 Based on past transactions, you know that I am a parent of two young kids, regularly outfitting two pairs of fast-growing feet. Don\u2019t make me search through your endless online aisle. Proactively come to me with informed options based on my past purchases and what’s currently in-stock or even better, available in store.Innovate beyond the UI to build new business models \u2013 Want to lock me in as a consistent customer with predictable revenue? You know I need a couple of pairs each month, so offer a subscription model to keep me from checking out the competition.Entice me to behave in a more sustainable and cost-efficient fashion \u2013 Whether picking up an order or making a return, give me a discount by doing so in store. Not only can this generate additional revenue, but it offers tremendous savings by avoiding shipping costs and gets acceptable merchandise back on the shelf faster.Keep in mind that this digital commerce experience must be scalable. As my kids grow from toddlers to teens and beyond, it\u2019s critical that the retailer facilitate this lifecycle \u2013 that’s how you improve e-commerce profits for the long-term.A unified commerce platform that scales to include all of a company\u2019s brands and geographies not only ensures that the entire organization benefits from complete data, but significantly lowers the total cost of ownership and complexity associated with multiple teams using disparate technologies.  Flexible. Agile. Future-proofed.The power of hybrid, composable commerce is real.Discover real-life examples of success HERE.\u00a0"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2023","item":"https:\/\/www.the-future-of-commerce.com\/2023\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"02","item":"https:\/\/www.the-future-of-commerce.com\/2023\/\/02\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"02","item":"https:\/\/www.the-future-of-commerce.com\/2023\/\/02\/\/02\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"How to up your e-commerce game for profitability in 2024","item":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/02\/how-to-improve-e-commerce-profits-2023\/#breadcrumbitem"}]}]