7 key factors driving the rapid evolution of eCommerce in 2023
24 / 01 / 2023
Keep up or get surpassed: Prepare your business strategy and operations for eCommerce’s rapid evolution by learning about its seven critical drivers for 2023, identified by Worldline. So here are 7 key factors driving the rapid evolution of eCommerce in 2023.
There is no denying that the digital world has gradually outpaced traditional shopping 'on the high street' for the best part of two decades. But this paradigm shift in consumers' shopping behaviour has significantly accelerated over the past three years as the effects of the Covid-19 pandemic forced shoppers to shift their spending online.
We adapted to the 'new normal,' and ambitious retailers rushed to demonstrate their innovative spirit as they launched new products and services to satisfy rapidly changing customer expectations and differentiate themselves from their competitors. Dynamism and a willingness to disrupt previously accepted norms of the sector, whether in established or emerging markets, have never been more critical to ensure business continuity in such a highly competitive landscape.
At a macro level, the fast-changing face of retail has presented merchants with the opportunity to access niche consumers worldwide, regardless of physical borders. Research from eMarketer and Statista suggests that online retail sales will reach $6.51 trillion by 2023, with eCommerce websites accounting for 22.3% of total retail sales. Taking this all into account, increasingly competitive and complex retail landscape challenges traditional sales and marketing approaches – but one which presents the ideal environment for growth.
In this context, we have identified seven key factors that will shape the retail eCommerce sector while driving change and opportunities even further in 2023 and beyond.
One of the most significant elements is that Cross-Border eCommerce has become a necessity. Online retailers are now facing fierce competition from direct-to-consumer (DTC) brands that are often already well-established within target markets, plus the rise in re-sellers. To capitalize on this opportunity, merchants must be prepared to adapt their strategies accordingly by utilizing a wide range of cross-border solutions such as foreign currency settlement, acquiring intelligent transaction routing, or leveraging local payment methods. Additionally, providing optimised user experiences is essential for success in this space — something that can only be achieved by working with a well-established payment partner with comprehensive localization solutions.
The rise of marketplaces and super apps has also impacted the global retail eCommerce market. While marketplaces offer merchants access to massive customer bases from around the world, super apps are becoming increasingly popular due to their seamless integration of multiple services into one platform — allowing customers to shop at numerous stores from one app. The two leading Chinese super apps, Alipay and WeChat, are among the most well-known. They offer a wide range of services, including instant messaging, social media, mobile payments, e-commerce, and more, all within a single app, and have become a one-stop shop or "super-app" for many users. Due to its popularity and ease of use, a super app has the potential to replace multiple competing apps, cementing, in this case, the position of Alipay and WeChat as the dominant players in the Chinese digital market.
The proliferation of new payment methods has also been instrumental in driving growth within the global retail eCommerce market. In addition to traditional payment methods such as debit & credit cards, digital wallets like Apple Pay and Google Pay, more alternative forms of payment are becoming popular such as Account-to-Account Payment, QR codes or biometric authentication systems, which offer increased ease and convenience for customers while increasing security for merchants.
Looking into 2023, rising customer expectations and the shift in consumer behaviour have led many retailers to create more personalized experiences. One trend that has gained significant traction in Western regions is the adoption of Live Shopping, which allows customers to interact with the seller and make purchases in real time through a live event or stream. Another emerging trend is metaverse commerce, enabling customers to shop in immersive virtual environments and providing a new level of interactivity and personalization. To keep ahead of competitors, brands must invest heavily in future data collection strategies, using insights from online and offline sources to provide tailored CX.
Data security is also paramount when building customer trust, especially with regulations like GDPR in Europe, requiring companies operating across multiple geographies to comply with various data privacy laws. As such, retailers must ensure they have secured systems that protect customer data while allowing them to access any relevant information quickly & efficiently when needed.
Open banking, for example, has the potential to revolutionize data security, it can provide unprecedented protection for customers in this digital age. Its safety measures are usually controlled by countries' financial regulations, which help to reduce data security concerns.
Finally, sustainability and recommerce trends will continue strong throughout 2023. Driven by rising environmental consciousness, particularly among Gen-Z consumers, brands and retailers alike are making conscious efforts towards reducing their carbon footprints through initiatives like implementing zero waste policies or offering repair services instead of replacements for products where possible. DTC brands are already embracing these ideals by focusing heavily on sustainability practices and recycling materials, setting themselves apart from traditional retail giants who have yet to make substantial strides toward these goals. The recommerce market is expanding faster than most other retail segments, making this an interesting trend to follow in 2023.
Looking to the future, the global retail eCommerce market is projected to exceed seven trillion U.S. dollars by 2025, according to Statista. That's a compound annual growth rate of 11%. If you want your business to stay ahead of the curve and capitalize on this growth, it's essential to partner with a payment provider that understands the unique needs of the eCommerce space. At Worldline, our team of experts has years of experience helping businesses take advantage of new opportunities and scale their operations. Let's connect if you want to discover how we can transform the way you handle payments. Click on the 'Get in Touch' button in the top-right corner and fill in a few details and we'll get right back to you.
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