The only constant in commerce is change, and the only way forward is to adapt. In the past year, our industry has seen millions of businesses display resilience in the face of the unexpected, contributing to more than $27 trillion of retail sales worldwide, according to research from Shopify. However, 64 percent of global businesses are still recovering from the negative impact of the pandemic.
Online shopping jumped 77 percent year over year just months into the pandemic, accelerating the innovation and adoption of digital commerce by half a decade. Shopping, working and socializing online became commonplace.
But after years of lockdowns and restrictions, people now crave meaningful connection across all facets of life — including commerce. As brands grapple with the challenges in 2023, they’ll need to respond by adding flexibility to their products, plans and policies. With a possible economic recession on the horizon, being agile has never been more important.
Economic Outlook
While commerce growth is slowing, total retail sales in 2022 have climbed 15 percent since 2020, and they’re projected to reach more than $31 trillion in 2025. But it will be a slow climb.
The World Trade Organization became less optimistic about trade growth volume as 2022 progressed. The organization’s estimate for 2023 was a growth rate of 3.4 percent in April. By October, the forecast for the year had plummeted to 1.0 percent.
Brand Expectations
Consumers have more options than ever, and in today’s economic climate, they’re ready to exercise that freedom of choice. More than seven in 10 consumers bought from the competitor of their go-to brand between May 2021 and May 2022. And, if spending power decreases as expected in 2023, consumers will continue to shop around for better deals.
But shoppers aren’t just aware of the price tag. Environmental, social and governance concerns influence about half of global consumers. Buyers want to support more ethical businesses with more sustainable supply chains. That’s why product shortages motivate nearly half of all brand switching: 46 percent of consumers move to competitors who have the products they want in stock.
Discovering new brands to try is also easier for consumers, and most are ready to buy. More than seven out of 10 enjoy the
convenience of instantly purchasing products where they’re browsing.
Unstable markets are pushing consumers to try new brands. During the pandemic, three out of four consumers tried a new brand, product or purchase method. Once lockdowns eased up and borders opened, 41 percent of buyers broke with brand loyalty in favor of new options.
Social Ecommerce
Ecommerce might be growing at a slower pace than during pandemic times, but it’s still taking an increasingly larger slice of total retail sales worldwide. By the end of 2023, one in every five retail sales will be made online, according to Shopify.
Although these numbers are significant, commerce has always been more than a transaction. Nine in 10 people buy from brands they follow on social media. Social commerce reduces friction between discovery and conversion, simplifying one-on-one engagement and potential sales. According to Shopify’s global survey results, using social channels for marketing and promotions is the most important customer acquisition and retention strategy.
In-Store Experience
The job market is in flux. Retaining staff has been a struggle for many employers, and 59 percent of brands attribute their challenges to human resources. Four in 10 workers around the globe say they might leave their jobs in the near future. Half say higher pay might persuade them to stay, but as brands tighten their belts under today’s financial pressures, layoffs are becoming more likely than pay raises.
Still, stores need teams ready to serve today’s customers who are used to blending multiple channels — and often expect retailers to do the same. Such expectations are changing the role of the retail worker, and the role of the retail store.
The commerce and technology landscape is in perpetual motion. The main takeaway: brands need to respond in real time to stay relevant.
