Ecommerce 2023: current context, trends and opportunities

A few days ago I decided to renovate the patio of my house. I was going to receive visitors from outside and I wanted to surprise them. My idea was to buy new garden furniture, I already had several options in mind but little time to go shopping.

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I googled prices, read reviews, asked for recommendations, logged in and out of several websites, added products to the shopping cart, regretted, rethought, convinced and finally bought online. All from home, sitting on my couch.

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I picked up my cell phone and a while later I had 3 emails in my inbox: "Thank you for the purchase! Your package will be arriving tomorrow between 9am and 2pm."

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Ecommerce came to give us a solution. Today we can shop from anywhere in the world without needing anything more than to be connected to a WiFi network.

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The virtual universe allows us to perform an infinite number of activities through a screen: watch movies and series, read books, meet people, go on dates, take classes and, without a doubt, buy and sell products or services. We have an online life that is becoming more and more relevant, taking over spaces that some time ago we would have never imagined.

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But as consumers, the stimuli are many and the struggle of brands for attention is constant. It is no longer enough for businesses to publish and pay for ads, users are saturated with information and our way of consuming and buying is changing.

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So how can an ecommerce company take advantage of all the existing offers in a much more demanding and constantly changing consumer society?

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To answer this question, it is first important to understand the digital ecosystem we are currently facing:

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Technological breakthroughs

As technology advances, so does the way we relate to it. The arrival of chatbots such as ChatGPT or innovative communication platforms, such as TikTok, make us rethink our communication strategies.

"We shape our tools and then they shape us" Marshall McLuhan.

Companies today must actively listen to digital media, keep abreast of trends, learn, be informed and encouraged.

Increased and stronger competition

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Thepandemic that began in 2020 completely changed the rules of the game for online consumption. During that year, Latin America was the second fastest growing region in e-commerce: 30.6% compared to the previous year, generating revenues of USD 83.63 billion. In first place with the highest annual growth was North America with 33.5% and in third place Western Europe with 11%.

Based on studies conducted by the German portal Statista, Latin America currently has approximately 300 million digital buyers, and it is estimated that it will continue to grow in the coming years.

On the other hand, the younger generations - millennials and centennials - are digital natives and make technology a big part of their daily lives. They interact, get information, entertain themselves and shop online as a matter of course.

Undoubtedly, there is a great opportunity in e-commerce. Currently, many companies are being encouraged to open their digital store, while others that have been moving in the online market for some time are making their purchasing processes increasingly simple and with better user experiences. The competitive field is complex.

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High digital advertising costs

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The costs to advertise on digital platforms have increased in the last year both in TikTok (CPM increased by +185%) and Google (CPM increased by 75%) and Meta (advertising costs increased by 61%). With more and more advertisers wanting to grab the attention of consumers, demand is high.
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In the image below, we can see information about the life cycle of customers. The one-timers are those customers who bought only once in our ecommerce. It is important to keep in mind that acquiring new customers through advertising may not be profitable. The acquisition cost is high and if we do not get the customer to buy more than once, it will have been a bad investment. To avoid this, it is key to have a retention strategy for each type of customer.

Third-partydata and privacy policies.

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In recent times, there have been major changes regarding third-party cookies, which directly affect the e-commerce world .

On Apple devices, the update to iOS 14.5 brought with it the new App Tracking Transparency policy, which aims to protect user privacy by providing the ability to decide whether you want apps to track your activity so that they can then display targeted advertising.

On the other hand, Google will put an end to the use of third-party cookies. This situation will have a major impact on digital advertising, as many companies rely on such data.

We can conclude that the new digital ecosystem confronts us with a new way of relating to our buyers.

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Thedata: the value of knowing the purchasing behavior of our customers

Nowadays there are data analysis tools that allow us to have a more effective look at our customers.

Consumers of our products or services behave in different ways, some are one-time buyers, others are loyal buyers and some spend long periods of time without interacting with our brand.

Thanks to data collection, we will be able to put a name and surname to our customers, visualize where they buy from and understand how they manage to consume what we offer: what they buy, at what time, how they pay, whether or not they repeat the purchase, if they use a discount, what shipping method they prefer and much more. Visualizing this information in an orderly manner and being able to apply it to our campaigns will give us a great advantage over our competitors.

Accurate and effective information will provide us with answers to many of the questions that arise when we want to generate marketing actions. We will know how, when and why to take action in front of our customers in order to connect and sell.

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In short, the data help us to:

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• To know our customers in depth: characteristics, behavior, seasonality.
• Understanding your future value
• Create segments and customized audiences
• Converting one-time customers into repeat customers
• Activate and Reactivate customers based on their life cycle stage
• Synchronize (buyer) audiences across paid media channels to lower acquisition costs and increase the ROAS of our campaigns.
• Reach and connect more precisely with our audience.

We are at the ideal time to exploit all the potential we have in the ecommerce world. Data is a powerful tool to achieve our business goals.