2022 has taught us to expect the unexpected. The Ukraine conflict, the energy crisis, the rising scepticism among businesses and consumers due to rising costs, and the emergence of the recession that fundamentally altered the dynamics of the eCommerce post-pandemic recovery, were the most surprising events of 2022 for everyone. This is a new wave of mounting issues, or as RetailX calls it, the ‘negative multiplier effect’.
It’s impossible to accurately forecast the twists and turns that 2023 will bring. Suggesting that being adaptable and prepared to alter course mid-action will be pivotal – essentially meaning being lean, yet effective.
As we begin 2023, it is important to be aware of the trends that will have the largest impact throughout the year, to stay competitive in the market. Here are four trends that will play a significant role in retail in 2023 and beyond:
More brands will deploy Lean Marketing strategies in eCommerce
This year, it will be necessary to move beyond traditional customer relationships and marketing techniques due to their increasing challenges. Lean marketing will play a central role in this transition. Essentially, lean marketing involves carefully analysing what the target customer values most and optimising all communication efforts around those priorities, while eliminating any activities that do not provide value or are wasteful in terms of time and resources.
As the economy enters a recession, the marketing industry is facing a difficult challenge. However, rather than being pushed to the sidelines, marketing teams should work to strengthen their relationships with customers and foster loyalty to their brand. By doing so, they can position their brand well for future success.
Providing personalised experiences is important for building Customer Intimacy and increasing the likelihood of making a purchase. However, using only first and third-party data is insufficient for delivering these experiences. Utilising zero-party data allows for hyper-personalised communication and creates a strong bond between the brand and each customer. Epsilon reports that 80% of consumers are more likely to purchase a brand that provides personalised experiences.
Brands and their customers will turn to activism and try to align on values
ESG (Environmental, Social, and Governance) goes beyond being just a business goal or a badge of honour. Its purpose is centred on genuine ethics, morals, and actions that aim to bring about positive change for the greater good. Every brand has the potential to be a sustainability brand by incorporating ESG principles into its business practices.
In the future, we can expect to see brands take on activism in the fight against inequality through initiatives like altering pricing and improving product accessibility. This approach promotes unity rather than polarisation, as seen in political debates. The conflict in Ukraine demonstrated the influence of brands in addressing global issues. It is worth considering what the impact could be if brands were to address climate change or other pressing problems in a similar way.
Consumers can discern insincere gestures and will only respond positively to genuine action taken by brands on issues that they care about. The current customer loyalty landscape is based on purpose and values rather than just on products or services. In a time when there is a lot of misinformation and fake news, consumers are increasingly making decisions based on emotions rather than rational thought. Brands need to be authentic and transparent to build trust with their customers.
This wave of activism is only set to grow exponentially.
eCommerce will visibly contribute to climate change combat
eCommerce has the potential to make a significant impact on the fight against climate change through marketing initiatives and strategies. By adopting sustainable practices in their operations and promoting eco-friendly products and services, eCommerce companies can play a role in reducing greenhouse gas emissions and protecting the environment.
Businesses can utilise zero-party data to improve sustainability and reduce waste. By collecting and utilising this type of data, companies can create more targeted and personalised marketing campaigns, which can help to minimise the environmental impact of marketing efforts by reducing the amount of unnecessary or ineffective materials produced and distributed. Many marketing teams are already planning to use zero-party data in the near future, with 90% expected to implement it within the next 12 months.
eCommerce can also help combat climate change by promoting and facilitating the buying and selling of second-hand or pre-owned products, also known as re-commerce. This practice helps to reduce waste and extend the life-cycle of products, thereby minimising the environmental impact of manufacturing and disposal. By encouraging consumers to purchase used items instead of new ones, eCommerce companies can play a role in reducing the demand for resource-intensive and polluting manufacturing processes.
Customer data sets will expand to support diversity and inclusivity as well as true Customer Intimacy
Traditionally, customer data sets have focused on demographic and behavioural information like age, gender, income, location, and purchasing history. However, as businesses and consumers place greater emphasis on diversity and inclusivity, customer data sets may also start to include data on characteristics such as race, ethnicity, sexual orientation, and disability status. Including this type of information can help businesses better understand and cater to their diverse customer base and create more inclusive marketing and products.
By collecting and analysing more detailed data on individual customers, businesses can create more personalised and targeted marketing campaigns and products. This level of customer intimacy allows brands to build meaningful bonds with their audience and improve customer satisfaction and loyalty. In today’s competitive market, creating strong relationships with customers is crucial for businesses looking to differentiate themselves and retain a loyal customer base.
The bottom line
This upcoming year will be all about being lean and agile. A recession is a difficult time for everyone, but it is also a time when the best operators can grow rapidly. Businesses need to recognise that amongst the new problems that surface are new opportunities to stand out. These four trends will play an important role in businesses gaining a competitive advantage and thriving throughout the recession.