E-commerce has undergone a fundamental transformation in the past five years, driven by changing consumer behavior. In 2023, consumers adopted new technology to enhance their shopping journey, while also seeking value for their money. This had an impact on businesses that aimed to improve their omnichannel strategy, offer more eco-friendly options, and ensure cybersecurity at checkout.
As we approach the festive season, these are the five trends that shaped e-commerce in 2023, according to the Think Forward report:
Immersive virtual shopping experiences
A new dimension of virtual shopping Augmented reality (AR) and virtual reality (VR) have gained popularity among consumers in recent years, leading to more brands embracing the technology in 2023. The UK is a leader in the AR and VR sector, with the fastest-growing market in Europe. Spending on AR and VR in the UK is expected to grow by 78.3% from 2019 to 2024 and reach £62.5bn by 2030.
Brands like BMW Group, Maison Valentino, and Ikea collaborated with tech giants such as Meta, Google, and Qualcomm, to create immersive shopping experiences and solutions before purchase. These innovations enabled a new level of personalization, allowing consumers to see how a product could fit in their environment, for example. This reduced the perceived risk of buying online, as well as the potential operational costs of returns.
Personalization is the key to these solutions, as they let consumers see how a product could suit them or their space, improving their shopping experience and lowering the chance of disappointment.
Non-gaming brands going into streaming
In 2023, omnichannel strategies gave way to more focused efforts to reach Gen Z online. Brands like H&M and Shopify teamed up with online gaming and streaming platforms to create more engaging and interactive customer experiences, and to boost sales by creating moments of joy.
Roku, a TV streaming platform, partnered with Shopify to enable in-app purchases from TV screens. When viewers see an ad from a Shopify merchant, they can press ‘OK’ to buy the product. This integration provides Shopify advertisers with more customer data and insights and makes it easier for viewers to go from ad to purchase.
Going green for less
Brands offer eco-friendly incentives and lower prices to boost sustainable consumption Sustainability remains a key factor for consumers, but they are buying less green products. To close this gap, brands are giving eco-friendly incentives and making green products more accessible.
The Inkey List, a UK skincare brand, helps people simplify their beauty routines with a ‘Smart Skincare’ service. Consumers use AskInkey, a chat feature on the brand’s website, to share their current routine. A team member suggests cheaper alternatives for some high-end products.
The Hoxton, a boutique hotel chain, rewards guests who choose sustainable travel. FutureCard gives cash back to customers who buy low-carbon goods and services with their cards. Carrefour is the first French retailer to get the national ‘anti-food waste’ label for its sustainability efforts, such as selling some perishable products at a very low price.
Repair not replace
As more consumers became aware of their budget and environmental impact, they adopted a new attitude of repairing and reusing their belongings. Nokia, Nike, and Zara were among the brands that responded to this shift by offering tools and services that help their customers keep their products longer. These solutions often involved cutting-edge technology, such as 3D scanning, but also leveraged the rising DIY trend, which enabled customers to fix their items and fostered brand loyalty.
Zara introduced a service that gives shoppers the option to repair, donate, or resell their clothing from the brand. Customers can book an online or in-store session to get their clothes fixed. The service started in the UK in 2022 and is expected to expand to Spain and other key markets by 2025.
The second-hand market also flourished in 2023. PayPal’s Resale Renaissance Report, based on a survey of 2,000 UK adults this summer, showed that buying used goods has become mainstream – with a quarter (25%) of Brits saying they do it regularly. Clothes (38%), books (31%), and furniture (13%) are the most popular items for second-hand shoppers, according to the report.
Security continues to be king
Online payment fraud has risen sharply in the past year, costing e-commerce businesses $48bn worldwide this year. In the UK, 62% of businesses say they will invest more in fraud prevention. Businesses also came up with new ways to deal with security and trust challenges at checkout. As digital tools and big data keep evolving and creating more risks, businesses rely on trusted financial service providers like PayPal to use smart technology to safeguard customer financial data, payments, and eligible purchases.
Security features such as biometric login, passkeys, encryption, machine learning, and device intelligence became essential in making the commerce experience fast and secure and reassuring customers at checkout. In the summer of this year, PayPal launched passkeys for eligible customers on Apple devices and Google Android devices in the UK.
In 2023, consumers became more aware of not only the planet but also the price and security of their purchases. Those who could meet these new demands, while keeping the consumer at the center of the buying journey, were able to stay ahead of the competition. Building brand loyalty while adapting to the changing customer journey.
