Well, here we are in 2023. The 2022 holiday sales numbers have been out for a couple of weeks and while most of the major industry numbers reported are not a surprise, some of them are helping to paint a picture of what trends are going to grow in 2023. We can’t change the unpredictability of the macroeconomic environment and all of its current uncertainty, but as we enter the second full year of post-pandemic growth in e-commerce we can use this information to help understand how investments and budgets will move this year. So here are some of the major numbers and what we believe each indicates for the e-commerce world in 2023:
Overall Retail Sales Up 7.6% from 2021 Holiday Period
This growth percentage is essentially flat from the previous year. While that news might temper the excitement of a lot of retail suppliers, we believe that established brands and entrenched suppliers on the b2b side are going to continue to invest in e-commerce infrastructure and performance. No one wants a recession and everyone is afraid of rising prices digging into margins but given the uncertainty of macroeconomic factors established ecommerce merchants and brands know that they need to continue to invest in order to hold, protect and grow retail margins. We believe this means less investment in re-platforming and more investment in Experience, Performance, and Conversion Rate Optimization (CRO).
Holiday Online Sales Grew 10.6% Vs 11% in 2021
Flat is flat but growth is growth. Since it seems we’ve been watching online sales outgrow brick and mortar for decades now this isn’t a shock but here’s the thing: the line between online and retail sales is blurring. We know consumers still love in-person shopping experiences where they can see, touch, feel products they are buying, but physical stores and everything it takes to run them are expensive so merchants need to properly attribute how consumers are using combinations of in-store, online, and marketplaces to influence how and when they buy. Merchants will increasingly be investing in customer data platform (CDP) technology like Bloomreach, Marketplace and product feed integration technology like BigCommerce’s, Feedonomics and Product Information Management technology like Pimberly.
Merchants are going to have to strategically architect how to use these technologies and a host of other tools to grow the customers that they already have and manage the cost of acquiring new ones.
Cyber Monday Sales Rose 5.8% Vs 2021
Considering how many consumers took advantage of incentive-based pricing and offers starting earlier in the calendar year, this number represents a bit of a surprise to many analysts who thought this number would be completely flat. Despite a recessionary cloud and inflation hanging over the holiday season, merchants were successful at attracting holiday buying activity; even if at the cost of some margin-squeezing promotions.
Consumers were still clearly spending pandemic-acquired cash reserves and they spared no expense buying for kids as the numbers in the electronics and toy segments indicated. What does this mean? Regardless of what happens with the economy this year, merchants are going to learn to take the customer data that they have and continue to make the most out of traditional online shopping holidays. The big box brands are already able to capitalize on their data and usage of CDPs, but increasingly this year the mid-market will capitalize on using the tools they need to personalize the shopping experience across media, marketplaces and catalog.
In addition, e-commerce merchants will increasingly have to focus on speed and performance to monetize visitors and increase conversion rates. SaaS merchants are plugging in a ton of apps or going headless with rich content management systems should consider edge CDN and security products like Webscale’s CloudEdge platform — a part of our own Headless Collective framework.
The Bottom Line
Merchants will be investing in e-commerce customer data usage, data and overall experience upgrades like never before this year. From personalization to conversion rate optimization (CRO), this is the year merchants will be attentive to the layers of their e-commerce experience that can be improved without investing in redesigns. Larger platform migration and integration-related projects will focus on “lift and shift” approaches because of this focus.
While macroeconomic factors will continue to cast uncertainty across the e-commerce and digital landscape, the continued growth of e-commerce adoption and digital transformation will not be slowed.