It’s been a tough year for the e-commerce industry.
While online sales skyrocketed during the pandemic, 2022 has seen growth rates slow down. Supply chain issues and inflation have also caused shoppers to tighten their belts and cut spending.
But there is still plenty of money to be made.
Global e-commerce sales reached a total value of $3.59tn in 2022. And it’s predicted to reach $6.39tn by 2027.
Many stores have succeeded with innovative strategies to boost sales and capitalize on trends.
In this post, we’re going to explore some of the biggest opportunities and challenges facing e-commerce stores and how some flourished in a testing year.
1. Supply chain issues
We’ll kick things off with the most significant challenge retail and e-commerce businesses face.
With a combination of consumer demand spiking, labor shortages, and increased fuel and raw materials costs, supply chains worldwide became stretched. This had a knock-on effect of inflation rising faster than it has done for decades.
For some businesses, this meant a drop in sales and a loss of visibility in search results on e-commerce marketplaces.
A recent study by Profitero revealed that it took retailers up to four days to recover their position in Amazon search results when a product ran out of stock for a single day.
With supply chains becoming stretched, e-commerce businesses have had to get creative and be more agile.
One method to ease supply chain issues is to make your e-commerce supply chain more localized. Of course, it’s not possible for every business, but you could strengthen your supply chain if you find a more local manufacturer or wholesaler.
Bloom & Wild is an excellent example of how brands can adapt quickly. The flower delivery company uses predictive analytics to stay on top of its supply chain.
The company also developed packaging that can fit through a standard letterbox so that customers can receive their order even if they are not home at the time of delivery.
2. New e-commerce channels
The e-commerce world experienced plenty of change as brands looked to adopt new ways of engaging shoppers and selling online.
With platforms like Instagram, Snapchat, TikTok, and Twitch all experiencing significant growth in active monthly users, livestream shopping became one of the year’s top e-commerce trends.
You can sell to your customers through a live video while shoppers can interact in real time. Post the stream on social media and your website so your target audience can join.
Social commerce also saw huge growth this year. According to Statista, global sales through social media platforms reached $992 billion in 2022.
Social media is an increasingly important part of e-commerce strategy.
The watch and jewelry brand CLUSE is an excellent example of how e-commerce stores can capitalize on social media for marketing and sales. Instead of constantly pushing promotions, CLUSE leverages user-generated content (UGC) to keep followers engaged and add a personal touch to branded posts.
3. Death of third-party cookies
Google has delayed its phase-out of third-party cookies in Chrome to 2024. But Apple, Brave, and Firefox have already blocked third-party cookies.
Internet users are increasingly concerned about how their data is used, with privacy rights backed up by new government legislation worldwide.
Canada introduced the Digital Charter Implementation Act in June, while the proposed American Data Privacy and Protection Act will be an important consideration for all e-commerce stores selling in the U.S.
Many retailers and e-commerce stores are evolving their marketing tactics to collect data directly from their customers, with increased transparency and consent.
In a 2022 Shopify survey, 42% of e-commerce stores said they would use quizzes, custom mobile apps, and first-party behavioral data to create personalized product recommendations.
Lookerio is a great example of how e-commerce businesses can use first-party data. The personal shopper website sends five clothing items each month, with customers only paying for the items they decide to keep.
Shoppers are happy to share their personal information in exchange for the personalized experience they receive from the company.
4. Growth of online marketplaces
The growth of online marketplaces like Amazon, eBay, and Walmart has been a big trend in e-commerce for several years. In 2023, these platforms are set for another year of exceptional growth.
According to a report by Ascential, online marketplace sales will account for 59% of global eCommerce by 2027.
Nearly two million third-party businesses now sell on Amazon, with 3,700 new sellers joining the platform daily. Walmart is also becoming an increasingly important market for e-commerce businesses to generate sales. In May 2022, the marketplace reached the milestone of 150,000 sellers – a 66% increase on 2021.
One of the most effective ways to scale sales on these platforms is to develop separate storefronts in multiple niches.
But it’s not an easy task.
Platforms like Amazon and eBay are adept at detecting and deleting multiple merchant accounts.
That’s where a tool like Multilogin can help. You can protect your storefronts by creating multiple accounts using separate virtual browser profiles.
The Australian company UGG is an excellent example of a major brand using online marketplaces. It highlights the importance of these platforms for e-commerce sales. The brand best known for selling sheepskin products ramped up its presence on Amazon in 2022.
The lesson for established and new e-commerce businesses is clear. To thrive in 2023, you need to have a marketplace strategy.
5. Mobile commerce
Smartphones are integral to the daily lives of billions of people around the world. And they are a key part of the e-commerce experience for many shoppers.
In 2022, U.S. mobile commerce sales reached $432 billion. E-commerce brands need to keep up with the shift in shopping behavior. With a strong mobile strategy, you can gain a competitive advantage in 2023.
The British cosmetics retailer Lush is an excellent example of how to create an engaging and intuitive mobile e-commerce site. The Lush website makes it easy for shoppers to search for products via category or keyword. It also has a similar user experience and style as an Instagram feed.
A recent study found that 85% of consumers favor mobile apps over mobile websites:
E-commerce businesses should look to add one-click checkout, item availability, and other “app-like” features to enhance the experience of buying from their store.
6. Sustainable e-commerce
Sustainability is increasingly influential in consumer purchasing decisions. In a study by the Harvard Business Review, 65% of people said they want to buy products from purpose-driven brands that advocate sustainability.
In 2023, e-commerce brands prioritizing sustainability will have a competitive advantage.
This is also an area where smaller retailers can adapt faster than the e-commerce giants. It’s more achievable for smaller businesses processing a lower volume of orders to adopt sustainable processes.
For example, you can use sustainable packaging and carbon-neutral delivery to stand out and attract more customers. Showcasing your sustainability efforts can also help customers to overcome price sensitivity.
The beauty and wellness company Brandless is an excellent example of an e-commerce store that used its green credentials to thrive in 2022. The company’s motto sums up its purpose-driven approach: Live Well. Take Care. Do Good.
To make your e-commerce store more sustainable, consider how you can improve your business processes and order fulfillment. For example, you can avoid using large packages for small items, ditch any excess plastic, and use recycled materials for your packaging.
7. Conversational commerce
Having a conversational commerce strategy is becoming essential for e-commerce success. In 2022, record numbers of people used chatbots and virtual assistants when shopping online.
You can use chatbots to provide customers with answers to questions about your products, handle customer support, and personalize the shopping experience.
This can be very useful if you’re a smaller or new e-commerce business looking to grow quickly. Instead of repeatedly answering the same customer questions, you can use a chatbot and FAQ page to manage the most common queries.
Your customers get a faster response, and you get more time to work on dollar-productive tasks.
The beauty brand Sephora is a good example of how brands used chatbots to generate e-commerce sales in 2022. With the company stocking a vast range of products, Sephora’s chatbot helps customers to navigate the store and find what they are looking for. It can also make product and content recommendations.
Looking to boost e-commerce sales in the new year? Make sure you take a look at our guide with 4 proven steps to increase e-commerce sales.
8. Video e-commerce marketing
In the U.S., internet users spend an average of 149 minutes per day watching video content online.
That’s why video marketing is vital for successful e-commerce businesses. Creating video content can help you showcase your product in a way that is impossible with static images and text alone.
For example, you can create video explainers for your product pages or ads for social media.
If you run video ads on social media, the best way to increase your chances of winning the top ad placements is by making bids using multiple ad accounts.
You can learn about this strategy and how it works on our Multilogin advertising use case page.
Nike is a great example of a brand succeeding with video in 2022. The sports apparel company launched its ‘She’s Ballin’ TikTok ad in July earlier this year. It received positive audience feedback and ranked in the top 20% of all UK ads on a measure of active involvement.
You don’t need a budget the same size as Nike to get started with video marketing. Platforms like TikTok and Snapchat offer a bunch of free tools to help you make your video ads more eye-catching and engaging.
9. Subscription business models
The subscription e-commerce market is booming. By 2025, it is predicted to be worth $478 billion.
If you sell a product that has recurring sales, the subscription model can be an excellent way to boost revenue.
According to a survey published in Global Banking and Finance Review, 70% of business leaders agree the subscription model plays a vital role in the future of eCommerce growth and expansion.
Companies like HelloFresh show how effective this e-commerce business model can be. In Q3 of 2022, the daily meal kit company registered over 7.5 million customers around the world.
If you add a subscription model to your e-commerce business, the biggest challenge you’ll face is customer churn. However, you can reduce churn and increase customer loyalty by offering exclusive perks and discounts on your other products.
10. Augmented reality (AR) and virtual reality (VR)
AR and VR had a breakthrough year in the e-commerce industry. Over 120,000 stores are reported to be using AR in 2022.
There are plenty of examples of e-commerce brands using technology to enhance the online shopping experience for customers.
Amazon’s AR View helps shoppers to see how products would look in their homes, while Mister Spex allows customers to try on glasses virtually before ordering a try-at-home kit.
You can also create VR educational experiences if your products are hard to use. This can be a good way to strengthen your relationship with customers and drive sales. For example, the American home improvement retailer Lowe’s created VR tutorials that showed customers how to use specific products.
Meta Spark is also helping brands and creators to leverage AR to build new content and shopping experiences for Facebook and Instagram users. The technology isn’t available to everyone yet, but we can expect another big year for AR and VR in 2023.
Reach new heights in 2023 with Multilogin
The past year has presented lots of challenges for e-commerce businesses. But there have also been many opportunities for stores to grow and engage shoppers in new ways.
There are plenty of examples of brands that have used new technology, shopping trends, and changing consumer preferences to establish themselves as a successful e-commerce business.
Hopefully, you have some new inspiration and ideas you can apply to your own e-commerce business.
If you’d like to learn more about Multilogin and how it can help you grow your online store, check out our e-commerce and dropshipping explainer page
