The end-of-year season is always a make or break time for e-commerce brands that can accrue earnings that see their businesses through quiet first quarters. Although inflation eased in the third quarter of 2023, the holiday season can be unpredictable and stiff competition will fight you for every sale. Therefore, you must familiarize yourself with recent trends. Below are insights gleaned from 2023 consumer behavior and Black Friday sales and what they may mean for the new year.
1. Consumers Are Buying, But in New and Different Ways
The good news is that spending was up. Profits also experienced a significant jump of 4.3 percent, especially compared to the 0.8 percent gain in Q2. Black Friday and Cyber Monday are often understood to function like litmus tests for the end of the year and once again, the outlook was positive. Black Friday saw record sales of $9.8 billion, a 7.5 percent leap from 2022, while Cyber Monday also hit an all-time record, exceeding $12 billion in sales.
These are undeniably excellent signs for e-commerce, but it must be noted that the spending landscape has changed. While some consumers have become more cautious, others are throwing caution to the wind. Research shows 40 percent of consumers are choosing payment methods that allow them to track their spending more accurately, and 38 percent of online shoppers now believe embedded payments are safer than traditional methods.
Buy now, pay later (BNPL) programs continue to gain traction with consumers, with research showing that more than a third of Americans are considering BNPL for end-of-year purchases, 8 percent more than in 2022. Adobe Analytics meanwhile reports that BNPL revenue jumped 47 percent year-over-year. Black Friday sales confirm this trend, with BNPL surging 72 percent in the week before Thanksgiving.
All of this tells us that while customers are currently eager to spend, you need to meet them on their terms. By offering flexible payment options such as embedded payments, one-click checkouts, and BNPL, you can gain access to a much wider audience than any single payment strategy allows.
2. Diversification is Key
If there’s anything the above information tells us, it’s that diversification is key. However, this applies to much more than just payment methods. It turns out that shoppers are also turning to new arenas when discovering products. While Amazon.com still reigns supreme, with 51 percent of consumers paying for their own Amazon Prime membership, a recent survey showed a huge number of customers are using nontraditional sites like Facebook (21 percent), YouTube (23 percent), TikTok (16 percent), Instagram (17 percent), and Pinterest (12 percent) as their first port of call when searching for products.
Shoppers have also been swapping their laptops and PCs for mobile phones when shopping online. Adobe Analytics shows that consumers used smartphones for 54 percent of online Black Friday sales, up more than 10 percent from 2022. Retailers looking to capitalize on these trends will want to streamline their mobile accessibility, invest in mobile-friendly marketing channels such as social media, and diversify their marketing strategies to include those listed above.
3. Convenience Reigns Supreme
Another widespread behavioral trend in 2023 was a move towards greater convenience. In fact, a recent survey found that convenience was the top reason that individuals shopped online, selected by 33 percent of participants. Let’s look at two contemporary e-commerce strategies for delivering your customers the ease that they desire:
Quick Commerce
One of the big trends we saw in 2023 is what’s known as “quick commerce.” Strictly speaking, quick commerce refers to deliveries that take place within an hour of purchase — “last-mile deliveries.” Lately, numerous contenders have emerged to offer these services, including Glovo, Meituan, Gojek, Grab, and Delivery Hero, which compete with established giants such as Amazon, Walmart, and Costco for the swiftest grocery delivery.
The statistics tell us why: In a 2023 Q3 study, 31 percent of respondents listed fast shipping as their No. 1 priority when shopping online. Meanwhile, the worldwide industry’s revenue was predicted to reach a record $123 billion in 2023 and grow by 13 percent year-over-year until 2027. Smart business owners who sell compatible products will capitalize on this trend by increasing shipping speeds through methods such as fleet dispatching, route optimization, scheduling, and driver management.
Anticipating Customers’ Desires Through First-Party Data
Just as you should be thinking about how to decrease the time it takes for a package to arrive at your customer’s door, you should consider how to decrease the time it takes for them to find the product or deal they’re looking for. Given that each customer’s needs differ, the fastest way to achieve this is through automated personalization of user experience and product deals. Once again, the statistics leave us in no doubt. Research shows that 89 percent of marketers see a positive return on investment when using personalization, and 60 percent of customers say they will return to a retailer after a personalized shopping experience.
While third-party cookies used to provide the bulk of the data on which personalization was based, their total phase-out by 2024 means that marketers must look elsewhere. First and foremost among the alternatives is first-party data. Harvested from your own website, first-party data is reliable, free and futureproof. Furthermore, a range of software solutions can now utilize AI-powered algorithms to leverage this data to offer efficiently personalized offers. Information such as location, device, number of open tabs and type of browser is combined with the user’s behavior onsite to determine exactly what product to offer them, at what price, and when. Using this technology, you can deliver your customers greater convenience by anticipating the bargains they desire at prices they can afford.
A Strategy for the New Year
While the stars may be aligning for e-commerce sellers, ever-fierce competition in the arena means that profits won’t be won without hard work. Consumer trends indicate that fortune will favor those that diversify the payment methods they offer and the platforms on which they market, with mobile accessibility proving crucial. Convenience is another key priority for customers in 2024; speedy delivery and personalized deals are also likely to prove the fastest ways to ramp up sales.
Emily Cawse is the customer success team lead at Namogoo, a digital journey continuity platform.
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