Jahzeel Omar is the Associate Director of Retail Partnerships at Cover Genius, the insurtech for embedded protection. Together, Cover Genius and its partners protect the global customers of the world’s largest digital companies, including Booking Holdings and Intuit. Cover Genius is also available at Amazon, Flipkart, eBay, Wayfair and SE Asia’s largest company, Shopee.
With more than 20 years’ experience working with over 1000 retailers and brands, Listrak has had the unique opportunity to identify trends and insights within this vertical. 2022 brought several macro-economic challenges including inflation concerns, excess inventory and rising advertising costs. The threat of third-party cookie deprecation and iOS privacy updates made collecting zero- and first-party data a top priority. We observed a renewed focus on customer retention and leaning into owned channels such as email and SMS. While we don’t have a crystal ball, we see a few trends continuing to be significant as we head into 2023.
Mobile commerce: As more consumers use smartphones and other mobile devices to shop online, retailers are investing in mobile-optimized websites and apps to meet the demand for convenient, seamless shopping experiences. Additionally, SMS as a marketing channel went mainstream in 2022, and investments in the channel continues to pay off; SMS has proven to be a key retention channel that consumers like using. They’re engaging with brands throughout the entire customer journey (and staying engaged as they make multiple purchases).
Personalization: Artificial intelligence and machine learning are personalizing the shopping experience for individual customers, including personalized product recommendations, targeted marketing and customized content. Retailers are using technology to enhance the shopping experience, including the use of augmented and virtual reality, automation and AI.
Retailers and brands should look for continued investment in experiential retail, focusing on creating immersive and experiential shopping environments to attract and engage customers.
Sustainability and social responsibility: Consumers are increasingly considering sustainability and social responsibility when making purchasing decisions. Retailers are responding by offering more eco-friendly, socially responsible practices and products.
Omnichannel retail: Retailers are adopting omnichannel strategies to provide customers with a seamless shopping experience across multiple channels: online, in-store, and through mobile apps. FYI – stores are not dead! Brands and retailers have plans to continue to open new stores in 2023, although the challenge they’re facing is finding and keeping skilled workers. There will be continued investment in store teams, leadership development and the retail worker.
Brands and retailers will continue to explore pop-up stores. These temporary retail spaces are becoming more popular as a way to test new products and concepts, reach new audiences, and create a sense of exclusivity.
Look for continued investment in experiential retail, focusing on creating immersive and experiential shopping environments, using technology, events, and interactive displays to attract and engage customers.
Emergence and growth of other channels such as influencer marketing, social commerce and live-streaming commerce: Live-streaming commerce is now a $5B industry in the US, paling in comparison to East Asia. Western platforms in the US, Europe and the UK have been slow adopters, and platforms like TikTok have only introduced livestream-style features within the past few years. TikTok has also shut down some eCommerce features, making it more difficult for the US to catch up. But even with the West lagging, the data suggests users are quick learners. Three years ago, livestreaming was almost nonexistent in the West and was a small segment of commerce (just 3.5% of all retail eCommerce) in China. By 2023, that number should jump to 19.4%. As eCommerce gets more active, livestream shopping is becoming more appealing.
The pandemic boosted the use of social media and online shopping. People were at home and spent a lot of time scrolling. Additionally, social commerce exploded; this is when brands let customers complete online purchases using social media platforms instead of only offering purchases via an eCommerce website.
The integration of social commerce and eCommerce gives brands and retailers a better understanding of their ideal customers, increases their distribution channels, and creates a magnetic brand. It’s not a question of eCommerce or social commerce — it’s just commerce.
THE STATE OF ECOMMERCE 2023
JAN 2023
2023: The Year Video Commerce Market will take off in the US
By Gautam Goswami
Chief Executive Officer, CommentSold
Gautam Gowsami is a seasoned consumer-technology executive with extensive experience on product and go-to-market. Prior to taking on Chief Executive Officer at CommentSold, he was Chief Marketing and Product Officer at TeamViewer, the leading remote connectivity software platform, which was the largest software IPO in Europe in 2019 when the business went public. He has also held executive roles at large silicon valley technology companies including OpenText and Informatica. Goswami brings 5+ years of board level advisory experience for more than 10 VC and PE funded tech and consumer-tech companies, driving product and GTM excellence initiatives.
In 2022, livestream shopping – an e-commerce staple in Asia, with a $322 billion market in China alone – exploded in the U.S. like never before, reaching a remarkable fervor during the holiday season. Major retailers such as Nordstrom, Levi Strauss and Bloomingdales are among the countless brands that hosted livestream shopping events this year, ushering in a new era of live video commerce in the States.
But if 2022 was the initial explosion, then 2023 will be the year live shopping goes fully mainstream. Below are three predictions for how that will manifest.
Fast forward to where we are today, the adults of Gen Z, the third largest generational segment in the U.S., are settling into the market. Digital natives, at their core, Gen Zers, are open to exploring new platforms and immersive experiences. A third will actually begin the shopper journey on social media and prefer brands with that personalized touch.
The behaviors that link all generations today stem from being connected consumers: navigates seamlessly through all channels, constantly present in an everywhere commerce environment, where all moments are shoppable–from where we scroll, browse, see, watch, read, essentially anywhere we interact with a brand. So for 2023, let's focus on three areas centered around delivering experiences to the connected consumer.
Finding that balance between product knowledge and an entertaining presentation and yet capturing the shopper's attention span will be the driving force behind the livestream strategies we’ll see in 2023.
Prediction 1: Boring e-commerce is out. Entertainment is in.
In 2023, live commerce won't compete with your audience’s daily scroll through Amazon, but with their favorite streaming service(s). Live commerce is fundamentally a content strategy, and when you’re trying to get someone to buy a product, that content must be engaging enough to pique viewers’ interest in your offerings.
Right now, the biggest barrier to retailers adopting live selling is actually knowing how to do it. The execution is difficult; it’s hard to strike a balance between product knowledge and an entertaining presentation that can overcome our increasingly short attention spans.
Finding that balance will be the driving force behind the livestream strategies we’ll see in 2023. Everyone will engineer their own brand-specific recipe for entertainment – in a sense, marketers are going to become showrunners.
Prediction 2: Authenticity, not celebrity, will be the key to engagement
Over the past decade, we’ve seen the rise of a new class of celebrity: the influencer. Like any celebrity, influencers have become the face of millions of marketing and advertising campaigns, valuable not only for their talent and fanbase, but their unprecedented proximity to the end consumer.
Consumers want to buy products from people who look and live like them, who model a lifestyle that’s attainable. Live selling is unique because it empowers business owners to become influencers themselves, creating a more personalized relationship between buyer and seller. Additionally, live selling pushes consumers through the conversion funnel faster, and in real-time. In 2023, we’ll see video commerce strategies focus more on engagement through authenticity, resulting in a more inclusive experience for audiences.
Prediction 3: Live selling strategies will be short-form and long-form
Live selling is just one act in the larger story of video commerce. Beyond live selling, brands have found success with explainers and “how-to”s, inspirational videos, short-form content, and the peer-to-peer recommendations that made the influencer an institution.
That said, many brands may believe they have to choose between long-form and short-form content strategies. This isn’t exactly unfounded, as Meta gutted its livestream shopping features earlier this year to focus on Reels, a sign that short-form will continue to be a focus for many retailers. But the same people who watch TikToks on their lunch break will also binge watch an entire Netflix series in a single weekend, or spend hours watching their favorite Twitch creator. At the end of the day, it’s not so much about the format of video commerce, but the content itself.
In 2023, more brands will discover that a good video commerce strategy isn’t about choosing between long-form and short-form, but finding the balance that allows them to best connect with their consumers. Live selling platforms enable sellers to utilize multiple channels of shopping; through reels, static images, stories, and replays, consumers have a unique opportunity to shop conveniently within a trusted community. After all, that’s the crux of why live commerce works in the first place: it fosters personal connection, and that’s what keeps people coming back.
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THE STATE OF ECOMMERCE 2023
JAN 2023