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How to grow your e-commerce business in 2023

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15 February 2023

Written by
Phil Monkhouse

UK Head of Sales

If you want to scale your e-commerce business, it is essential to know the International shopping trends for e-commerce businesses. As per Statista, it is estimated that approx. 2.14 billion people worldwide (27% of the world’s population) shop online, an increase of 4.4% compared to 2020-2021.

Global e-commerce spending per capita reached $76,344 in 2021, and the share of e-commerce in total retail sales is estimated at around 20% in 2022. This e-commerce growth is only expected to continue. By 2026, the market share of e-commerce is expected to leapfrog to 24% from the current 20%.

Three ways to activate your e-commerce growth in 2023

The face of the e-commerce game is changing rapidly. Thanks to technological disruption, new players, innovative ideas and shifting customer preferences, online sellers don’t have a choice but to continuously adapt and innovate to find more effective ways to identify, reach, and engage with potential customers.

With 2023 growth spiralling downwards and fear of recession still lurking, it is more critical for e-commerce businesses to keep up with emerging trends to remain competitive and seize new opportunities in this exciting and booming industry. Here, we will explore the most prominent themes to shape the online business landscape in 2023 and the actions you can take to stay ahead of the curve. Let’s get started.

Understanding consumers’ changing preferences┬á

Customer buying behaviour has evolved with the growth of the online shopping industry. With technological evolution, consumers’ buying habits are changing rapidly, and digital businesses must take note of the changing patterns. Here is how your business can make more data-centric decisions to align with consumer behaviour changes.

  1. Leveraging data and insights: Collect and analyse historical data on customer behaviour and other key metrics to identify areas for improvement, improve operations and turn the customer journey into a memorable experience.

It is vital to ask yourself and your team the following questions:

    • Are your customers bouncing on a particular page on their site, such as checkout, returns, etc.?
    • Are your customers visiting your site but need to complete their purchase?

Deep diving into historical data using tools like Google Analytics, exit-intent surveys, etc., help you learn your audiences’ behaviour, which can help you inform your decisions. For example, customers may feel shipping time is longer, or you don’t offer enough payment methods.

2. Engaging experiences to win loyalty: With technological advancements, consumers prefer more options, convenience and connection whilst interacting with e-commerce brands. Whilst you aim to reach diverse demographics, tailor experiences based on their demographics, geographies and interests to interact better with them. You can provide improved search and bespoke recommendations by harnessing machine learning. This will help you design more compelling and tailored experiences without raising costs to achieve efficiencies, increase online sales and build customer retention.

3. Build omnichannel ecommerce capabilities: Today, customers use social media for discovery, research, comparison, and even for purchase. As an online retailer, it is vital for you to identify the channels your customers use and how they use them throughout their journey to unleash the power of true omnichannel. Asking the following questions can help you communicate better with your customers:

    • Who are my potential customers?
    • What platforms does my target audience prefer?
    • How do they make decisions?
    • Which online payment gateways are they comfortable with?

For the unversed, omnichannel means businesses selling and interacting with customers through multiple channels at a given time. Think website, Facebook page, Instagram account, etc.

4. Invest in sustainability: As per the IBM study, half of the consumers are willing to pay a premium for sustainability. More and more retailers are investing in corporate sustainability initiatives to keep up. For example, the tech giant Apple pledges to be carbon neutral by 2030.

5. Make your customers feel in control: Simplifying your workflow is an excellent place to strengthen your process. Liaise with your suppliers or fulfilment centre to provide timely and automatic updates to your customers on their delivery.

Maximising efficiency of your international trade to create more profits

E-commerce companies can start cutting unnecessary and/or additional expenses to minimise costs and boost profits.

If you are an e-commerce brand, here are a few actions your business can take to boost profits.

  1. Build automation for your payments, operations and accounting systems: By streamlining your business with the help of automation tools and software, you can automate routine tasks, improve processes and encourage employees to focus more on valuable activities. You can even launch payments and other financial capabilities in your existing ERP and accounting systems with the help of Application Programming Interface (API) to track everything in one place and save time.
  2. Opt for multi-currency accounts: You can set up a multi currency collection account worldwide, hold balances, convert them for use in another currency or payments to suppliers. This leaves you in complete control without dealing with multiple banks or having a physical presence, which will help you save on currency transfer fees.
  3. Ensure access to flexible cash flow: As interest rates continue to rise, having access to a flexible lending facility that you can utilise when you need it without any set-up or maintenance costs is critical. You can use this lending facility to pay suppliers early, negotiate an early settlement discount and ensure you squeeze every bit of margin to remain competitive in 2023.
  4. Localising international payments: If you are an e-commerce player selling in multiple countries, making and accepting payments in local currencies such as RMB, EUR, USD can help you save on unnecessary bank charges, currency transfer fees and administrative costs. HereÔÇÖs how you can simplify cross border payments:
    • Make early prepayments to your suppliers in their preferred currency to negotiate better prices. For example, if you are importing from China, you can pay your Chinese suppliers in their preferred currency on time. In addition, explore the possibility of fixing prices with the supplier for a specific time period. For example, decide on a purchase price for 6-12 months.
    • Set up local currency accounts to access new markets globally.
    • Sell products in local currency to build customer loyalty and win repeat purchases.
    • You can even connect these collection accounts to marketplaces for better efficiency.

Manage operational, financial and technology risks

  1. Mitigate the risks of FX volatility: With the FX volatility set to continue in 2023 and the prices of raw materials and energy rising worldwide, this can impact your import costs. A holistic and tailored FX hedging strategy to manage your currency risk can help protect your business from losses arising from FX exchange rate fluctuations. You can keep your profit margin intact by locking in an exchange rate along with the purchase price. This will help you stay relaxed and focus more on your online business.
  2. Manage your technology risks: It is as important to manage your technology risks as it is to manage your financial and operational risks. As an online seller, you must ensure your platform is secured so that customers can trust your platform. Create a plan that includes security testing, auditing, confidentiality and integrity management, and cybersecurity and privacy.
  3. Conduct testing: Conduct several tests to ensure your website, payment gateway, and other systems are robust enough to handle the surge in traffic and online sales. If your website and payment system succeed, you will retain many orders. With this, you must also ensure that your telecom and other critical infrastructure systems are sound and functional enough to handle high volumes.

Final words

As an e-commerce player, it is imperative to be mindful of the shifts in customersÔÇÖ expectations, industry changes and market dynamics. Considering the ensuing economic headwinds, learn the impact on your online sales and chart your next action plan accordingly. For example, which products are sensitive to the recession, how FX volatility can impact my import costs, etc.

Paying attention to emerging trends and changes can help boost your bottom line to stay competitive in the ever-changing e-commerce business landscape.