E-Commerce

These are the challenges for the e-commerce industry in 2023

Fatih-Kağan Taşkoparan

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The slump in sales in the e-commerce sector in 2022 has left its mark: Cost increases, inflation, declining consumer spending and willingness to buy, as well as the energy crisis and supply chain problems. These are just a few examples of the challenges that online retailers will face in 2023. And yet there is a ray of hope at the end of the tunnel: after Assessment by the German Economic Institute a positive development in online retail is forecast for 2023. Find out how you can best respond to the upcoming challenges and what you need to pay particular attention to here in the fynax blog.

Rebound 2023?

The special boom in e-commerce, which lasted almost two years, came to an abrupt end due to inflation and the energy crisis in the wake of the war in Ukraine. Nevertheless Expert:inside of the German E-Commerce and Mail Order Association (BEVH), the industry can look forward to a rebound in the new year following the slump in sales in 2022. The significant advantage of e-commerce compared to brick-and-mortar retail lies primarily in the savings in personnel costs. Online retailers have comparatively lower personnel expenses, are therefore not tied to the inflationary salary spiral and can offer correspondingly lower prices in their online stores. This is another reason why experts expect the e-commerce sector to grow by up to five percent in the new year.

Challenges for online retail

Despite the positive forecast, however, online retailers must also be prepared for challenges in the industry. The Status analysis by ECC Cologne and the payment service provider Mollie According to the study, the biggest challenges for e-commerce are general cost increases, tougher competitive conditions and declining consumption. In the wake of the war in Ukraine, the economic repercussions of the ongoing energy, inflation and supply chain crisis are being felt in online retail in particular.

Nevertheless, there are also industry-specific reasons for many of the problems faced by online retailers. These include the lack of suitable specialists and the associated lack of know-how, as well as poor quality advice and support.

Online retailers are responding to the challenges with digital measures, such as expanding their online marketing and further developing their online stores. In addition, improvements to web services by offering flexible payment methods such as "Buy Now, Pay Later", minimizing fraud by investing in cybersecurity and integrating it quickly into the store system are promising solution strategies for operators.

A rethink in the industry

The economic conditions are causing a rethink in customer loyalty strategy. Big players, but also small and medium-sized companies in e-commerce, are now focusing their marketing strategy primarily on customer loyalty and not on customer acquisition as before. This is their response to changing consumer behavior, which poses a major challenge for online retailers. But what does a successful customer retention strategy look like? And how can online retailers adapt at an early stage?

Tools and trends 2023

As is so often the case, customer satisfaction is the top priority in the new year and new tools and trends in online retail should primarily be used to improve the shopping experience. Fabian Fischer, CEO of the digital consulting platform Etribes, agrees, describing the customer experience as the decisive factor for the success of an online store.

We have put together an overview of the most important tools that you can use to respond to the upcoming challenges and improve your holistic customer journey:

  • Virtual Reality

Thanks to 3D animations, the virtual reality tool is particularly suitable for offering customers an improved online shopping experience. Well-known examples are digital try-ons of clothing or the digital-spatial 3D representation of furniture. Integrating a 3D view of your products in your online store makes it easier for your customers to make a selection and improves the online shopping experience in the long term.

  • Artificial intelligence

Programs that work with artificial intelligence are able to offer additional content for products on offer and generate this information automatically.

  • Quality of advice

The relevance of the quality of advice in the online store should be particularly emphasized. It should therefore not only be possible to provide advice on your website, but also to provide quick and personally accessible advice. This can be achieved via a (video) chat function, for example, or via traditional telephone contact.

  • Customer loyalty offers

You should consider offering your products in a community-oriented way and using special target group offers to bind your customers to your online store.

A professional data analysis program is particularly useful for online retailers, as the program helps to optimize marketing processes, increase the efficiency of the company and respond to changes in the market accordingly.

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