New Realities, New Investments, New Experiences 

By Karen DiClemente, Head of Retail Practice, Listrak

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