By Greg Ashton, founder at GROW, a media company and conference series specializing in online retail. Follow Greg here.
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2023 is officially here, and consumer preference to buy from direct-to-consumer brands is high, despite a seemingly negative news cycle. In fact, research predicts that the DTC online market will reach $213 billion by the end of 2023, with almost a quarter of shoppers believing DTC brands have better quality products, and over 60% believing they provide the best personalized and most engaging digital experiences, compared to traditional brands.
There’s no doubt that providing a personalized experience has always been important. But in 2023, I’m predicting that personalization alone isn’t going to be enough to stand out among competitors. I think it’s time to consider investing more time and resource into these five areas.
1. Livestream shopping will continue to grow.
Gone are the days of written reviews. As of 2017, over 80% of audiences reported a preference to watch video from a brand rather than reading a blog or a social post. And while livestream shopping hasn’t grown as rapidly in the U.S. or Europe as we’ve seen in China, for example, many experts are still expecting it to flourish over the next 12 to 24 months. So if you’re debating whether or not to test livestream in 2023, my vote is a yes.
Just remember to a) pick the right influencer and b) put research behind your platforms. Your audience cares about having an authentic connection with influencers more than you’d expect. If they’re producing clearly fake ads, it’ll likely show in your engagement rates. Select an influencer who actually aligns with your brand, and trust their creative input as you strategize a livestream campaign.
And keep in mind that you have to know where your audience is actually interacting with your content to have a successful campaign. Sure, anyone can livestream on Facebook or Instagram, but is your audience primarily on TikTok? Look into the amount of time your audience is spending on different platforms to make sure you’re putting your money where their eyes are.
2. It’s time to prioritize social commerce.
With global users spending an average of about 24 hours per month on TikTok alone, it will come as no surprise that social commerce will continue apace in the new year. The key takeaway is that it would be wise for every DTC brand to tap into social trends to engage with the social consumer. From partnering with influencers to improving the shop-ability of your apps and ads, if you’re not selling on social, you’re likely being left behind.
3. Brands need supply chain resilience.
Consumers are familiar with “Due to COVID-19, we may be experiencing longer than normal wait times and shipping delays” messaging by now. But in 2023, experts are predicting that brands will become much more proactive in their approach to their logistics. How? By seeking alternative product ingredients, new packaging and more efficient distributors. The message is clear: Don’t lose potential consumers to competitors because you were late to problem-solve the problem areas in your supply chain.
Experts have shared key ways to build this resilience, including mapping out your key dependencies, creating multiple scenario plans (including a detailed risk management plan) and leveraging your data and technology to flag potential disruptions quickly. According to Gartner’s predictions, “By 2025, 45% of organizations worldwide will have experienced attacks on their software supply chains, a three-fold increase from 2021.” Does your company know where it wants to spend its “risk” dollars?
4. Sustainability is the key ingredient.
Gen-Z is here to play, and to win over their hearts, it’s crucial to truly value sustainability. One report shows 82% of shoppers want brands to embrace sustainable and “people-first” practices. Another survey even found 75% of Gen-Z shoppers felt sustainability was more important than brand names. So, for all emerging brands out there, this heralds a huge opportunity to build awareness and grow your audience by making green choices in production.
And remember, incorporating sustainability into your business plan doesn’t have to break the bank, either. It can be as simple as improving your shipping transportation plan, embracing second-hand materials, increasing brand transparency and even letting employees work from home. But no matter how your brand goes about it, I think it’s clear sustainability will reshape retail in 2023.
5. Storefronts are gaining popularity.
I know the whole point of a DTC brand is the lack of a storefront to spend money on and maintain. But we’re also seeing a huge uptick in online brands transitioning to a brick-and-mortar storefront as shoppers head back out into the world. And we know that having a personal connection to a brand/product matters to shoppers nowadays. So, as the price of digital ads continues to rise and the sales funnel starts to need more and more touchpoints, having a storefront could actually be a great way to save money and direct resource toward more successful conversions.
Overall, I believe 2023 is the year to go “all in” on social, own your supply chain and own your storefront, too. It’s also a great time to experiment with new channels like livestream and consider the role of sustainability in your product portfolio. As always, the key question is “How much is this all going to cost?” And the answer is not insignificant. However, the origin of online retail is in innovation, and many of the most successful brands have valuations that are directly attributable to their foresight. Choose to make these changes, and I predict 2023 will be your best year yet.
