To improve e-commerce profits, brands need to shift their e-commerce strategy from growth at any cost to one of sustainable revenue.
2022 was marked by global upheaval and ongoing supply chain disruption as retailers worked to recover from the pandemic. Two months into 2023, the economy is giving mixed signals. With a recession on the way (or already here), businesses must brace themselves for a rocky year ahead.
With so much instability, it’s more critical than ever for brands to understand 2023 consumer trends. Here are the top shopper expectations and preferences retailers need to keep up with this year.
- Consumer spending holds steady — so far
- Demand grows for payment options and convenient shopping
- Personalized customer service, 24/7
- Fast delivery, easy returns
- Social commerce trends up
- Gen Z drives sustainability
2023 consumer trends: Spending’s up…so are expectations
Despite uncertainty in the economy, consumer spending has remained steady. Collectively, the retail world held their breath for Black Friday and Cyber Monday results, but they needn’t have.
In the U.S., more 196 million people shopped from Thanksgiving Day through Cyber Monday, according to the National Retail Federation (NRF). The results shattered NFR’s expectations by more than 30 million.
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However, retail sales for the November-December holiday shopping season fell short of NRF’s forecast, growing 5.3% from 2021. NRF blamed historic inflation and high interest rates. In 2022 overall, sales grew 7%, in line with expectations.
“The pace of spending was choppy, and consumers may have pulled back more than we had hoped, but these numbers show that they navigated a challenging, inflation-driven environment reasonably well. The bottom line is that consumers are still engaged and shopping despite everything happening around them,” NRF President and CEO Matthew Shay said in a statement.
E-commerce remains strong as consumer continue to go online for their shopping needs. According to NRF, 0nline and other non-store sales were up 9.5% during the 2022 holiday season.
This is good news for retailers, but it’s not the full story. From flexible payments to around-the-clock customer service, consumers have high expectations as they look to stretch their dollars in a tough economy.
The brands with the best customer service in 2023 are great examples – but a down economy may lead to service cuts.
Convenient, flexible ways to pay and save
Consumers today expect flexible payment options, particularly Buy Now Pay Later (BNPL). And with 55% of abandoned carts caused by high pricing, BNPL is a great way to meet expectations and save the sale.
In fact, experts predict there will be 900 million BNPL users by 2027, an increase of 157%.
Consumers are hooked on convenience, especially Buy Online Pickup In-Store (BOPIS). According to a ICSC, 50% of adult shoppers in the U.S. used BOPIS even before the pandemic. And 67% of BOPIS shoppers end up adding more items to their carts than they otherwise would have.
Even as COVID restrictions have lifted, customer adoption of BOPIS, also called click-and-collect, has remained strong. Research and Markets expects the global BOPIS market to reach nearly $703.2 billion by 2027.
Consumers also expect convenience in ordering, increasingly using voice and virtual assistants for the task.
One survey found that 47% of online shoppers used a virtual assistant to purchase with a voice command. Respondents cited convenience and time savings as the biggest benefits.
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Consumer trend 2023: Personalized service, 24/7
Personalization and omnichannel have set a new bar for customer service. Shoppers have come to expect features like live chat, email support, WhatsApp, and chatbots — all proven to increase sales and improve customer trust (when done correctly).
Consumers expect service interactions to feel frictionless — and 73% say the first providers and subscriptions they’ll cut are the ones that offer the worst customer service and/or user experience.
When customers reach out for help after a purchase, they expect a service rep will know their purchase history and preferences. They don’t want to have to explain themselves or be handed off to other departments to get their questions answered or issues resolved.
More than pricing, and even the product itself, customer service is the biggest driver of customer loyalty. Discover all you need to know about customer service in this deep dive.
Fast delivery and effortless returns
In a recent webinar, Pivotree revealed that 90% of consumers expect two- to three-day shipping. Research also shows that 56% of U.S. and 41% of U.K. consumers are likely to never shop with a retailer again if their order is delayed.
Beyond fast delivery, consumers also expect detailed order and shipping updates, even down to the micro level, shared across digital channels, including email and text.
Easy returns have become something consumers expect, especially in e-commerce, where at least 30% of all products ordered are returned.
One study showed that consumers are increasingly basing their purchasing decisions on a retailer’s return policy, and prefer to return items to a store instead of boxing it up and mailing it.
And of course, they prefer the return process be free, although due to the high cost of online returns, some retailers are beginning to add return fees.
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Connecting with the brands they love on social media
Consumers want to feel a connection with their favorite brands. They seek out a curated experience, and often feel pride in purchasing directly from the source.
This trend is driving up direct-to-consumer (D2C) sales. According to eMarketer, U.S. D2C e-commerce sales will hit $213 billion in 2024 and make up nearly 17% of all online sales.
For D2C brands, social media channels play a key role in reaching consumers. In particular, millennials and Gen Z expect your business to be everywhere they are. So, if you’re not on social media, you’re likely to miss out.
Shopping on social media platforms is expected to increase three times as fast as traditional e-commerce, but brands need to build customer trust to boost adoption.
Sustainability becomes a top consumer trend in 2023
Sustainability has evolved from a “nice to have” to a non-negotiable for many consumers. This is especially true for younger generations.
In fact, 90% of Gen Z consumers would be willing to spend 10% more for sustainable products.
Gen Z’s buying power is growing. By implementing a sustainability strategy now—something that only 60% of companies have done—you can build toward stronger customer loyalty and a more conscientious company.
Sustainable retail has gone mainstream as younger generations become market forces. Going green not only helps the environment, but boosts profits.
Making 2023 a successful year
Many things will influence customer expectations this year, from lingering effects of the pandemic to recession fears and inflation. But despite those challenges, there are plenty of things businesses can do in 2023 to build strong customer relationships.
By keeping up with evolving consumer trends, retailers can foster growth for years to come.