Three vital ecommerce lessons to carry into 2023: Dynamism, Proactiveness and Curiosity

January 13, 2023

  • jamescarr

Home » Three vital ecommerce lessons to carry into 2023: Dynamism, Proactiveness and Curiosity
Thrtee vital lessons for multichannel ecommerce retailers

A year of volatility, further supply chain issues and an increase in advertising costs proves that dynamism, proactiveness and curiosity will be essential for ecommerce success in 2023.

With 24,000 new UK ecommerce businesses opening in the last year and consumers largely refusing to return to their brick-and-mortar shopping habits, 2022 has followed the same trajectory as the previous 2 years – extremely high levels of competition and increasing ecommerce retail dominance.

Away from these factors, lingering lockdowns and China’s zero-Covid policy has resulted in more supply chain issues. The general performance of European financial markets has led to shifts in consumer purchasing behaviour driven by high inflation and increased cost of living. In addition, the increased digital activity of consumers and online retailers has further saturated the paid advertising offerings, causing the cost per customer acquisition to climb once again.

It’s been a tumultuous year, especially for small- to medium-sized ecommerce businesses. But what have we learned? What has taken us by surprise and ultimately, what lessons can we take forward into 2023 to ensure success and growth?

Lesson 1: As supply chain issues persist, is it time to go national?

The more optimistic analysts predicted that 2022 would see a return to normal supply chains globally. But the situation remains challenging for many ecommerce businesses who rely on certain international suppliers.

A number of factors are to blame. Not least that many manufacturers are playing catch-up to meet a “new normal” demand.

China’s pursuit of “zero-Covid” and closure of outbreak factories, have also played a significant role. As a direct result, manufacturing output, orders and exportation have all stagnated for nearly half of the year, with many ecommerce sectors affected.

Add to this, the fact that consumers are placing ever-increasing importance on shipping speed, ecommerce businesses still relying on impacted international suppliers risk being squeezed out by businesses with the resources available to make things happen faster.

Of course, an effective order management system (OMS) that can help businesses manage their inventory more effectively and automatically check the availability of the requested items, will dramatically boost shipping speed. But sometimes a more fundamental solution is required.

In 2023, ecommerce businesses need to continue to consider where they source their products and materials, asking themselves whether a switch to a more reliable manufacturer, based in a country with higher stability, is an appropriate move.

Perhaps your business needs to go a step further and seek out national suppliers over international ones?

Paradoxically, alongside faster shipping times, your customers are increasingly concerned about where their products originate. Approximately 70% of online buyers favour websites promoting an ecologically responsible approach, which could mean switching to a local/national supplier is a cost worth enduring.

To ensure success in 2023, ecommerce retailers must ensure dynamism when it comes to supply chain issues. It’s essential your business is flexible enough to make the right supply chain change at the right time.

Aside from this, it’s also a matter of proactiveness: are you doing everything possible to ensure your business is getting its products from a trusted manufacturer?

Regular quality checks, shipping speed audits and assessments of general customer feedback are great ways of letting the data lead you towards the right informed decision when it comes to your supply chain.

Lesson 2: Curiosity, the antidote to sky-high advertising costs

More competition and online traffic has increased the cost of paid advertising for ecommerce brands in 2022.

Google’s search ad CPC (cost-per-click) increased by 14% from 2021 to 2022, whilst Meta’s CPM (cost per thousand) increased 61% year over year, averaging at GBP 14.59/CPM.

Customer acquisition costs were already high prior to the pandemic, but 2 years of lockdowns have accelerated the trend. Forecasts predict a further advertising cost increase of 5.4% in 2023 and 8.4% in 2024.

These increases place even more importance on ecommerce brands to find the right performance agency for them. Simply, businesses cannot afford to launch ads in 2023 that are not optimised, and for some new to the strategy, help will be necessary.

Away from performance marketing though, brands will be rushing to balance their strategy with organic brand marketing and a community building strategy in 2023, as a result of increases in advertising costs .

Using a combination of paid and organic social media to build communities around a brand, and creating trust and loyalty amongst an audience that is harder and more expensive to reach, will be essential to many ecommerce businesses in 2023.

To make use of the newest and most effective community building and brand marketing tools, your ecommerce brand must maintain a certain level of curiosity in 2023.

An ability to seek out tools that can boost your brand marketing, through trial and error, will be critical to success in this area of your marketing strategy. Ensuring curiosity when it comes to the brand marketing your competitors are evoking will also help you refine your own community building and brand marketing efforts.

Despite the increases in costs, brands shouldn’t look to dismiss performance marketing altogether. For some, it remains an integral part of many ecommerce strategies over the coming year. Those who want to get a headstart in 2023 should look for the right agency that can stay ahead of the optimisation curve and deliver results.

Lesson 3: Currency volatility and opportunity

If you’re an ecommerce business owner reading this in the UK, you’ll know full well how much of an effect currency volatility can have on operations.

With the value of currency used for ecommerce transactions fluctuating significantly in 2022, many will have felt the impact on profits due to currency volatility this year.

Retailers selling to consumers in a stronger market will have been hit particularly hard, especially if they’ve been unable to increase their costs to account for a stronger foreign currency.

Again, this has shown that dynamism and flexibility are as important as ever to avoid these drawbacks turning into catastrophes.

Businesses need to be able to diversify both the currencies and markets they trade in quickly Nowhere has this been more evident than in the UK, with some businesses seizing the opportunity a weak pound presents by exporting more goods to the right foreign markets.

Ensuring your business architecture, order and inventory management and team are in a place to be dynamic in the coming years could present unique opportunities, as markets worldwide continue to be volatile.

Dynamism, proactiveness and curiosity in 2023

Amazon, the largest ecommerce marketplace globally, emerged during recession in 1994, and there are hundreds of well known brands who seized opportunities at similarly difficult times.

The last year hasn’t been without its problems, but it has shown us again that where there is volatility, there is opportunity.

In 2023, market and currency volatility will continue around the world, supply chains may continue to struggle and ad prices will likely continue to climb. Yet, amongst this there are opportunities for ecommerce businesses to seize.

To ensure success, this will require dynamism, proactiveness and curiosity in almost all areas, particularly those highlighted above.

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