Commerce Trends In 2023

As a business leader or as someone working in the commerce industry it is important to focus on the future much more than we do on the past. With enterprises and economies changing so rapidly, it is our job to not just transform the organization or the firm but also to embrace the disruption and innovation so that we can explore new avenues. When we look into a decade of research from organizations from around the world we can see that corporate history is strategic and can be a motivational resource. It should be treated as a reference point for thoughts and actions, it can actually dive into progress in a way that provides continuity and offers stakeholders a sense of identity and pride. 

In this article however we will be navigating through the changing commerce landscape with the top trends that will shape 2023 and beyond, and the recommendations you need to be aware of. We have curated a list of the latest trends shaping commerce, pulled from propriety data, insider opinions and from the top brands globally. 

Unexpected new normal

The only constant that we can be sure of is change. The only way in which we can move ahead is to adapt. In the past year, we have observed that millions of businesses display resilience in the face of the ever changing, which contributed to over $27 trillion USD in retail sales worldwide. But even now more than 64% of the global businesses are still trying to recover from the negative impact of the pandemic. 

The economic obstacles from the pandemic just kept on adding in 2022, especially with the Russia- Ukraine war which caused to sanctions that got delayed or which stopped trade altogether. This fiscal instability has caused the highest inflation we have seen in the last 40 years.

When it comes to online shopping we can see that shoppers have spent more than &&% over a year just months into the pandemic, this further accelerated innovation and adoption of digital commerce by half a decade. Working, socializing, meeting up and shopping online has now become the norm. 

After years of restrictions and lockdowns, people are now looking to establish meaningful connections in all parts of their life, this includes commerce. Brands are trying to tackle the various changes that are in place in 2023, in order to do this effectively they need to add flexibility by adding products, plans and policies. With the economic recession looming, it is ever more important to be agile. We will dive deeper into the global trends that businesses need to focus on in order to confront the unexpected changes. 

Ecommerce businesses will have to brace for a sluggish economy

As economic growth is slowing, total retail sales in 2022 are climbing 15% since 2020, this is projected to reach more than $31 trillion in 2025. This is going to be a slow climb. 

The world trade organization has become much less optimistic when it comes to trade growth volume as per the trend from 2022. For the year 2023, the organization estimated a growth rate of 3.4% in April, by October the projected numbers will drop by a dismal 1%. As commerce growth is slowing down, concerns about inflation are shooting up. 

How will inflation affect business?

It’s not just the business owner who is concerned about the pricing prices. The average consumer is 208% more concerned about inflation than they are about the coronavirus. The concern for coronavirus has slipped down the list of worries as inflation shot up to the top. Worrying about the rising prices isn’t going to go away in 2023. Even though many say that the fear of the recession is overdone, even the possibility of recession will affect how businesses spend, how venture capitalists invest and ultimately on how people will shop. 

The expectations of brands and businesses grow as consumer behaviour changes

Compared to the past, consumers have never had more options than they do right now, even in today’s economic climate. And they are more than willing to exercise that freedom of choice. For brands, it is noticed that seven in 10 consumers bought from the competitor of their go-to brand between May 2021 and May 2022. And if we are going to see how the spending trends and is expected in 2023, consumers will be looking to shop for better deals than ever before. Shoppers are not just going to keep an eye on the price tag, various other factors such as environmental, social and governance concerns will influence more than half of the global consumers. Buyers are looking for more ethical businesses with more sustainable supply chains – even though consistency in freight, distribution and especially fulfilment is almost impossible for businesses to control. This is the main reason that product shortages motivate more than half of all brand switching: 46% of consumers will switch to another brand that has the products they want in stock. 

More than seven out of 10 users also like the convenience of instantly purchasing products as they browse. Social media is also a big influencer: 60% of the globe is already on social media, so they would focus on platforms when they are already on to find new brands and products.

Seamless immediacy is also a big factor when it comes to physical retail as well.  Right now consumers want their shopping experience to be personal instant and responsive – they want a high-value experience anywhere

This is why apart from growing revenue, focusing on improving customer experience is vital for global businesses. This attitude of ultimate flexibility and interconnectivity is hitting all the right spots of commerce which include employment. 

The focus should be to provide the ultimate flexibility with interconnectivity which includes all aspects of commerce. Employees are also looking to move to organizations that value their wallets, lifestyle and values. For one out of five employees, flexible schedules and location is very crucial in order to retain them. 

Cutting costs as a strategy during inflation will raise customer loyalty

Global trades have hit a record high of $2.8 trillion in 2021, which is an increase of about 13% from before the pandemic. But commerce growth has slowed down in 2022. The way in Ukraine has contributed to the surging oil and gasoline prices globally, and the cost and time which are associated with transporting small packages have also shot up accordingly. 

In many countries such as China, the Netherlands, Germany etc important staples such as fuel, oil, wheat, wood, and metals through and from Russia, so prices are also shooting up worldwide. Product shortage will put a greater financial strain on an already weak economy. Interest rates and borrowing costs are also rising rapidly along with commodity prices. Exaggerated growth during the pandemic will also contribute to overzealous investments by hiring some direct-to-consumer brands. Higher costs and slower business will make it hard to keep up with the expenses. The result will be layoffs. 

As both businesses and consumers are continuing to see their spending power decrease in the light of inflation, they are both looking to reduce expenses. Shoppers will be doing so by looking for cheaper options, which means that 81% of businesses that plan on raising their prices will need to emphasise on the value they offer to their customers. 

The supply chain is forcing brands to accelerate long-term growth plans

Experts are predicting supply chains to normalize by 2023, but the Russia-Ukraine war has further pressured the supply chain to still squeeze the pandemic. Studies are indicating that supply chains have caused a 62% financial loss. 

The effects of the supply chain would affect various businesses differently, but brands need to recognize the vulnerability of their own supply chain and prepare for uncertainty – especially with 60% of consumers expecting the same. 

Business owners will respond to supply challenges by rethinking single-sourcing and how much inventory they keep on hand. Such shifts may be more expensive in the short term but will create more robust supply chains that can adapt to the turbulent logistic landscape.

In order to move ahead it is important to link the present to the future, pursuing our latest aspirations while remaining in touch with what has worked for us consistently. 

We hope that you have gotten a brief overview of the predictions in retail, money and supply chain parts of commerce in 2023. Do drop in the comments on your predictions and how you will be changing the way you work or do business to accommodate such changes. Get ahead of all the trends in 2023 and keep yourself updated with our articles.