Shopify just dropped their Commerce Trends 2023 report. And their outlook for ecommerce in 2023 is…complicated.
According to the report, over 70% of businesses around the world are preparing for a potential recession in 2023. But at the same time, ecommerce is experiencing growth.
In a nutshell, while global retail on the whole is looking a little less hopeful than we’d hoped (a small 4.8% projected growth rate), there are growth opportunities for brands who can anticipate their shoppers’ needs and find workarounds for headache-inducing logistical challenges like supply chain back-ups.
Some key takeaways related to returns from Shopify’s Commerce Trends 2023 Report:
- Customers will have more options and higher expectations when shopping online.
- Brands will need to better understand their inventory and supply chain needs.
- Brands will need to drastically reduce returns.
- Because customer acquisition costs (CAC) are high, shopper retention is key.
- Ecommerce is growing, changing the role of brick and mortar.
Read more: Navigating uncertain landscapes for D2C brands
Customers will have more options and higher expectations when shopping online
Shoppers want what they want, when they want it.
And because they’re feeling the effects of the highest inflation rates in over 40 years, they’re willing to shop around for lower prices. That’s bad news for merchants, who are facing higher-than-average customer acquisition costs and continued supply chain delays.
Shopify merchants will need to power through these challenges while providing top-notch customer experience for shoppers. Brands will need to think not only about customer experience before and during purchase, but also about how they’ll set themselves apart by providing a good post-purchase experience as well.
How merchants can use Loop features to prepare for 2023: We’re purpose-built exclusively for Shopify merchants. Meaning we can provide tailored return solutions (and options) that shoppers desire without breaking the bank. Plus, Loop integrates with many of Shopify’s top apps–making customization on both the digital and physical side of returns easy.
Brands will need to better understand their inventory and supply chain needs
To combat the existing supply chain delays, brands should try to streamline their inventory systems—or at least increase the amount of inventory they stock.
According to Shopify’s report and an article published by Insider Intelligence, 46% of customers are already willing to switch brands if it means they can find the product they want in stock. In 2023, brands will need to better anticipate inventory outages by digitizing supply chains and staying on top of product data.
How merchants can use Loop features to prepare for 2023: Part of understanding your inventory includes returns. How do product returns impact your inventory? How do supply chain troubles affect your returns? Loop helps Shopify merchants with the right return data they need to make sure their shoppers can trust the items they want to exchange are actually available to them.
Brands will need to drastically reduce returns
Returns are more costly than ever, thanks to inflation and rising shipping costs, which means brands will need to get creative about anticipating sizing issues before their shoppers make the purchase.
For these reasons, tools like augmented reality and virtual dressing rooms will grow in popularity this year. Better understanding the reasons that shoppers return specific items can also help brands order inventory more efficiently.
How merchants can use Loop features to prepare for 2023: This is another opportunity to leverage the return data Loop offers Shopify merchants. Is there a specific product giving you trouble? Is a shirt always returned because it’s the wrong size? Or are your product images misleading? Gaining access to your return data will allow you to proactively reduce returns–ultimately lowering costs across the board.
Because CAC is high, shopper retention is key
Keeping customers is going to be more important than ever before, since in 2023, both customers and merchants are coping with the high prices of inflation.
Shoppers are buying less often, and when they do buy something, they spend less. Attracting new customers therefore becomes harder (and more expensive). Loyal shoppers are 60-70% more likely to complete a purchase than a new shopper is, and the Shopify report and Modern Retail found that a loyal customer’s worth is almost 22x more than that of a new customer.
For these reasons, brands that focus on their existing shopper base with an aim to increase customer lifetime value (CLV), will perform better than those who do not.
How merchants can use Loop features to prepare for 2023: We’ve said it before, and we’ll see it again. Returns are not a loss. They’re an opportunity to retain your customers. When a shopper initiates a return, they aren’t unsatisfied with your brand. They’re just unsatisfied with your product. And if you only offer refunds, you’ll lose their loyalty. Instead, Loop helps Shopify merchants retain more shoppers by offering mutually beneficial return options, including exchanges and store credit.
Ecommerce is growing, changing the role of brick and mortar
The good news is that ecommerce itself continues to grow—according to Shopify’s report, 4 in 5 retail transactions will take place online in 2023.
But the ecommerce landscape is changing. More customers are shopping on social media channels, which means that influencer marketing and social commerce options are going to be key for merchants this year. With the growth of ecommerce comes another reality—shops with brick and mortar locations will need to rethink the in-person shopping experience, too.
Immersive, tech-forward in-store experiences, staffed by employees who are clearly happy and well taken care of, will help set brick and mortar retailers apart from the competition.
How merchants can use Loop features to prepare for 2023: This is another key area that Shopify merchants need to be considering. If you’re expanding to brick and mortar, how does that affect your returns? Are you going to offer at-home pickup? Box-less drop-off? Or in-store drop-offs? There’s a lot to consider, which is why we’re here to help.
Want to learn how Loop can help your shop turn 2023’s ecommerce challenges into opportunities? Sign up for a demo.
About The Author
