11 February 2023
UX trends to watch out for in 2023
Now that we’re well into 2023, it’s time to hit the rewind button (only ever so slightly), and take a deep dive into the world of commerce in 2022.
Our friends over at Shopify have released their annual report highlighting the trends and takeaways about commerce in 2022, giving retailers a good level of insight into how they can leverage their strategies for the year ahead.
We’ve got a lot to get through though, so it’s best not to dilly dally. So, without further ado, here’s a roundup of what we consider to be the five main takeaways:
A Just-In-Time (JIT) approach to manufacturing has been the norm since just after World War II – seen as a way to cut down on storage costs and waste, the approach aims to source, manufacture, assemble and ship products just in time to meet the customer’s demands. This approach has been utilised effectively by brands across the globe for the last half-century.
However, the JIT approach relies on all stages of the supply chain working without any issues, and the Covid-19 pandemic exposed the fragility of the system on a massive scale, with global supply chain disruptions more than tripling between 2019 and 2021, and most companies being almost unable to cope.
Between the pandemic and the Russia-Ukraine conflict, businesses are finding issues in supply chains at all stages. As supply chains have slowed down however, customer expectations have grown, with fast and free delivery now becoming the norm – 60% of consumers now expect next day delivery, or at least delivery within one to two days. Alongside this, we have also seen rapid growth in ecommerce – online shopping jumped 77% year over year just months into the pandemic. The result of all this is supply chains struggling to meet demand – 68% of businesses said the current supply chain crisis is negatively impacting their ability to fulfill customer demand.
It’s no secret that the economy is struggling. The pandemic, further lockdowns in some parts of the world, and the Russia-Ukraine war all continue to bottle-neck supply chains, and the price of food and fuel has surged.
It stands to reason that consumers simply don’t have as much disposable income to spend, meaning the income for most retailers is struggling. Over 40% of shoppers switched to lower-priced food options at the supermarket, and according to Shopify Plus merchants, 35% have seen shrinking cart sizes and 50% are seeing less site traffic and lower conversion rates.
Not only this, but the economic downturn is impacting those businesses that rely on investors. Investors are becoming more cautious and raising their ROI thresholds, which will be tough to meet when brands are already feeling the pinch – more than a quarter of businesses expect raising capital in 2023 to be more difficult. However the top concern for 33% of brands are interest rates, which have increased steeply.
Competition is fierce in the online retail space, and the advertising tools that brands use are becoming more expensive and less dependable. The depreciation of third-party cookies is a big part of this, with Apple and Mozilla already switching from an opt-out approach to an opt-in, and Google soon to follow suit. This has resulted in a loss of accuracy within ad targeting, making it harder for brands to reach their target audiences.
Of course, these brands are simply catering to what their users are asking for – privacy. In the wake of data breaches such as the Cambridge Analytics scandal, users are more aware than ever of how their data is used, and legislation such as GDPR is making these changes necessary.
For businesses that rely on data for their marketing to be effective (probably most of them), this is becoming a real issue. Cost-per-clicks on the biggest advertising platforms are creeping up all the time, and according to data from Boston Consulting Group, 95% of marketers have already experienced the downsides of data privacy trends or expect to in the coming year.
To fill the void left by third-party cookies, many businesses are gathering their own customer data. While the volume may not be as great as bought third-party data, first-party data is a significant upgrade. It’s free to gather, whereas third party data is only becoming more expensive; the business knows exactly where it’s come from; and of course, as it’s made up of real customers that have interacted with the business, it’s likely to be a lot more relevant. It allows businesses to give that unique, transparent and human experience, which third-party cookies just aren’t able to provide.
According to Shopify’s report, social media is now the second most popular method for consumers to search for products. Gen Z in particular now uses social media to look for products more than they use search engines, and other generations surely aren’t far behind. Instagram, Facebook, TikTok – all of the major social networks have their own in-platform shopping features, where retailers can advertise and even sell their products without a user even having to leave the app.
Alongside in-app shopping platforms, we can see that ad reach is increasing across all platforms, helping brands to connect with new customers. But while paid advertising on social media is undoubtedly here to stay, user-generated content is another avenue that’s growing. As Shopify report, brands are using social platforms to interact with customers in ways that don’t require the use of paid advertising.
They give the example of the clothing brand Skims – their CEO has stated that performance marketing is not effective for them due to stock limitations, and instead they focus their efforts on attracting a loyal audience who are dedicated to producing user-generated content for their shapewear. In fact, I can say with confidence that the only reason I’ve heard of Skims as a brand is from seeing product reviews from users across my FYP on TikTok!
Perhaps the most surprising finding from Shopify’s report is that physical retail is actually growing. Whereas one might expect that bricks and mortar stores are becoming less and less relevant, the opposite is actually the case. Of the businesses surveyed by Shopify, 82% are confident that physical stores will continue to play an important role in future commerce growth. Even amongst Gen Z, who famously spend more time online than any other age group, it was found that at least half prefer to shop in-store. All of this is pushing even digitally native businesses to open physical stores – look at Shein, who have recently started running a series of “pop-up shops” in the UK.
Online and offline retail should no longer be treated as separate entities, but as one continuous experience. A physical store serves as a real-life advertisement, and builds trust with buyers. In fact it was found that brands get on average 37% more web traffic the quarter after opening a new physical store. Likewise, an online presence can drive in-store footfall – customers often start the journey online, looking for products and conducting research. From there, they may decide to go in-store to see the item in person, try it on or check the quality – and make a purchase from there.
According to Shopify’s report, with this new blended channel trend, the primary function of retail stores is no longer transactional. It’s all about the experience – Enjoying the experience is the primary reason 35% of consumers shop in store, and another 24% want to interact with products before buying.
It’s clear that while the role may be changing, the bricks-and-mortar store isn’t going anywhere anytime soon.
The world of commerce, and ecommerce, can be complex – so let us help!
We’re marketing experts, and we know a whole lot about how to sell, sell, sell, whether that be online or in the shops. And of course, we do a lot of work helping businesses integrate Shopify into their websites.
11 February 2023
UX trends to watch out for in 2023
Still the same great data driven services, but now with a different nameGot It