Although 2022 was less of a banner year for e-commerce merchants than the previous two, a number of trends took hold and emerged as merchants in B2C and B2B e-commerce businesses began to deal with some softening of demand and flattening of revenue growth compared to the previous two pandemic-induced boom years.
Of course, a lot changed in consumer behavior with the return to leisure travel (a post-pandemic phenomenon that’s been called “revenge travel”) and all of the consumer shopping activities that accompany it, but the rising inflation and interest rates tempered a number of consumer sectors and B2B growth as well.
The unique combination of high employment and high interest rates along with the uncertainty of a recession is leading many e-commerce analysts to look forward with an “anything could happen” attitude about 2023. But e-commerce, digital marketing, and retail technology are still maturing so despite any economic storm clouds that may or may not be gathering, the Wasserman Digital Technology team feels like there are several key trends that will flourish this year, including the following:
Omnichannel Retail / Luxury Boom Times
The upper end of the economy is continuing to boom as travel continues to grow in a post-pandemic period of “make up” vacations. Travel and consumer retail spending tend to increase hand in hand so we may be moving to a period where consumers are going to spend on luxury goods even if they are no longer over-employed as they have been in the last few years. While the pandemic and its incentive-fueled spending on home goods, furniture and household merchandise has cooled off, luxury merchandise like luggage, leather goods, apparel, shoes and outdoor gear may all see another boom year associated with an increase in travel.
Prediction #1: The luxury goods segment of the economy surpasses last year’s growth despite a slowing economy.
PIM and CDP Shakeout in 2023
Customer data platforms and Product Info Management tools are plentiful right now but many of them were funded just prior to or during the pandemic. There’s going to be a shakeout as some merchants join forces and as the pace of growth with these technologies slows to a reasonable level. Look for CDPs that crossover into other marketing technologies (Bloomreach, Klaviyo) to succeed while others that are more industry-focused or niche in nature fail due to lack of second round funding.
On the PIM side, a number have scaled beyond their means and will either have to grow through acquisition or “rescue” themselves in a merger. Powerful, differentiated solutions like Pimberly will persevere but others that have tried to do too much across too many industries may well have to fold and cash in their chips.
Prediction #2: Most digital and e-commerce economy workers will be reading about consolidation or closure of recent PIM and CDP startups
The Headless Revolution Will Continue (for Enterprise)
The value of headless architectures is increasing – especially for enterprises or savvy startups that value the separation of content and commerce. But the value of the effort and cost is less valuable for smaller merchants that can still do a ton of content control with the back-end of their e-commerce platforms.
Headless is not for every e-commerce merchant and nor should it be. What type of e-commerce merchant is the perfect candidate to go headless in 2023? The enterprise with $50mm+ in e-commerce revenue, rich merchandising requirements and a very busy content publishing schedule, and that either is or has aspirations to be global with differing content requirements across the global regions that it serves.
Prediction #3: We will see some stellar headless implementations from merchants that match the above description this year. We will see decreasing adoption from small and mid-market merchants as they adopt the SaaS platform enhancements that negate the value of headless.
For more on Headless, check out our recent Podcast episodes.
Social Commerce Expansion
Brand merchandising through content creators and influencers will only grow more in 2023 and that will lead to a number of brands that conduct their business via social media, especially if their products are “niche” or specialized to a degree that doesn’t warrant a full-blown e-commerce strategy.
Facebook, Instagram, TikTok, Pinterest and other platforms that are popular with brands will enhance their e-commerce offerings and they might even be able to shut out platforms like Shopify from low end SaaS purchases. Some brands will augment their “traditional” e-commerce experiences with “social only” purchasing experiences that are more campaign-centric and episodic.
Prediction #4: One of the platforms mentioned above launches an end-to-end e-commerce platform in 2023.
Returning Share of Bigger Screen Time
Phone-based conversion rates have been lower than desktop for quite some time. Consumers like bigger screens and use their phones out of convenience or necessity. While all merchants will have to continue to focus their digital and e-commerce experience efforts on both the large and small screens, look for desktop, laptop and tablet conversion rates to grow versus mobile again this year.
Prediction #5: Tablets become relevant to e-commerce merchants again.
Shopify Launches a B2B Option
This has been discussed for some time among e-commerce industry analysts but it’s a recurring prediction that doesn’t seem to transpire. This year it will. There’s too much pressure on Shopify especially in 2023 as the growth of B2B e-commerce will outpace B2C. D2C e-commerce brands will go B2B where they can and those merchants on Shopify will facilitate that pressure and that growth. While BigCommerce has a significant lead in SaaS / B2B, Shopify will put pressure on. By year end there will be additional feature releases by BigCommerce that will keep it in front, but for Shopify merchants and for small business B2B, we think Shopify will provide a viable option in 2023.
Prediciton #6: Shopify launches B2B but BigCommerce remains the SaaS B2B leader.
The Bottom Line
2023 will be another year of growth despite recession signals being sent by macroeconomic factors like inflation and stabilizing consumer product demand. We think it will be a banner year for B2B growth as the e-commerce economy pushes growth in a sector that was quiet and troubled with supply chain issues during the pandemic.
We’re looking to discuss these trends and others on a panel-based podcast prior to the end of January! Look for it sometime right after the NRF conference in New York, our annual networking kickoff! Hopefully we will see you there!