How Commerce and Social Commerce Will Coexist In 2023
By Adwright, 30 December 2022
This year saw the advancement of multiple economic instabilities coming our way, such as the Russia-Ukraine war inflation measures and looming recession. As the year draws to an end, brands will be required to be agile to respond to unexpected challenges in order to thrive in 2023.
From the importance of retaining consumers during an incoming recession, to the evolution of social commerce and how it will coexist with traditional commerce this 2023, we look at the best highlights from Shopify’s Commerce Trends 2023 report.
Brand loyalty makes your brand recession-proof
To retain customers in the midst of inflation pressures, 81% of brands that plan to raise prices need to highlight their value. Some choose the route of customer retention, building trust and loyalty for the long-run. By establishing and retaining relationships with customers, customer loyalty increases a customer’s worth by 22 times and enables companies to weather through and flourish post-recession. In addition, almost 90% of shoppers will pay more for products from trusted brands, allowing these brands lesser risk of customer attrition (whereby they stop purchasing from the company).
Unsurprisingly, ecommerce continues to grow worldwide and by the end of 2023, one in every five retail sales will be made online.
The evolution of ecommerce
It is hard to deny the growing power of social platforms, with 60% of the world’s population present on social media platforms. With commerce now spanning across our daily social interactions and even entertainment, the consumer’s purchase journey has also become non-linear. This is evident in our lives – purchases now happen anytime through a link sent from a friend, an influencer-sponsored video on TikTok, to an advertisement on Instagram, or window shopping in person.
A form of ecommerce coined as ‘social commerce’, consumers are able to consider and directly purchase products via social media and content creation platforms. As social commerce redefines where, when and how consumers interact with brands, the consumer’s social commerce journey is also streamlined. From the time between discovery and conversion, the social commerce user journey reduces friction for a more engaging and interactive consumer experience. It also engages active consumers, with nine in 10 people buying from brands they follow on social media instead of remaining passive followers.
As the majority of consumers enjoy the convenience of being able to purchase products they’re browsing instantly, Shopify predicts using social channels for marketing to be the most important customer acquisition and retention strategy driving growth for at least the next few years. In fact, Generation Z consumers are looking to social media to seek information about brands, much more than they do using search engines.
With almost as many social media users as there are internet users, brands are also recognising the need to invest deeply in social media to convert and retain customers. In the same vein, almost a third of businesses are looking to ramp up social media marketing efforts as they seek to grow the company over the next few years. Positive brand experiences on social media platforms impact better sales – after a positive social experience with a brand, 78% of consumers are more willing to make a purchase, 72% increase their spending and 77% choose that brand over a competitor’s.
Retail Remains Essential
According to Shopify’s survey, 82% of businesses are confident that physical retail stores will remain important to future commerce growth. For example, physical retail grew at a faster pace than ecommerce when Covid-19 restrictions were loosened in 2021, indicating that despite the evolving convenience of ecommerce, traditional retail stores will still play a part in consumer experiences to come.
This rings true even for Generation Z, who are known as the most digital generation. This generation holds a combined USD$360 billion with an ever-increasing spending power, and notably, half of these shoppers favour in-store shopping.
In today’s digitally integrated world, merging online and offline consumer experiences have become commonplace. Most consumers often research brands and products on their phone before they actually step foot into a physical retail store. In this way, they are usually aware and familiar with the brand already, before they visit the store with a specific purpose. Many of these consumers are on the lookout for an enjoyable experience, motivating 35% of consumers to shop in store and another 24% of consumers to interact with the products pre-purchase.
Brands have been providing a tailored experience outside of purchase decisions through several activities such as hands-on guided tours for products or services, designing collaborative spaces for the community, or hosting industry events or panels to enhance knowledge-sharing. As the consumer retail experience continues to evolve, 82% of brands believe that the growing demand for enhanced experiential value will be one of the most crucial needs to meet in 2023.
While the latest ecommerce and commerce trends might excite and spark a legion of creative ideas in many of us, it is imperative that your brand identity is clearly conveyed across all communication channels. Ensure your brand message is kept consistent and impactful throughout each medium to maximise brand resonance with consumers and establish your brand’s voice amongst the crowd.
At Adwright, we understand the paramount importance of having a reputable brand image. With our finesse and experience in curating strategic brand messages, we create the brand equity needed for marketing to succeed. While we are experts at building brand assets, it is our clients who play the biggest role in building trust with their customer base. After all, where there is trust, there is loyalty – the key factors that determine a brand’s reputation.
Unsure if your current brand narrative is the best fit for your company? Drop us a message today at firstname.lastname@example.org or speak with us at +65 6227 7227. We would be ecstatic to join you in your branding journey.