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Mar 9, 2023 | 14 minute read
written by Kirsten Aebersold
The future of Direct-to-consumer (DTC) eCommerce has never been brighter, with new opportunities appearing every day. Also known as “B2C” or “Business to consumer,” a DTC eCommerce approach allows businesses to sell their products and services directly to their customers. DTC eCommerce is all about selling products directly to consumers without the use of middlemen and third parties. Spending habits around online shopping have drastically changed since we entered this new era of digital retailing, and YoY growth rates are up, fueled by a desire for convenience and direct communication with customers.2023 is sure to bring even more changes to DTC eCommerce with tech advancements, global shifts in consumer behavior, and lifestyle trends all influencing progress. To prepare for the coming changes, let's take a look at 21 DTC eCommerce trends you should watch out for in 2023.
Shopping is becoming more and more convenient for customers as options for eCommerce payments continue to evolve, driving YoY growth for merchants. One of the most popular DTC eCommerce trends of 2023 is the adoption of "buy now, pay later" (BNPL) programs that help customers keep purchasing goods and services in tighter economic climates. Consumers love this because they can keep spending on both necessities and luxuries without breaking the bank; some don't even have to pay anything for their purchase up front. On top of that, the interest rates for many programs can be surprisingly low, making them a better option than using credit cards or banks.
DTC eCommerce companies generally expect higher costs when it comes to customer retention and gaining new customers in 2023. To stand out, brands have to think outside the box and make sure their stories connect deeply with their target audience. It's not just about talking up your brand, it's also about understanding the customer's pain points and creating campaigns that speak to their deepest needs.eCommerce can often be a transactional experience, so if a brand’s storytelling doesn’t immediately grab attention, it can turn potential buyers away. Instead, the focus should be on making the customer the star of the story and showing how each offering can make their individual lives easier.
Personalization of campaigns to specific target groups also allows companies to be more flexible and quickly adjust to new trends, like introducing new colors for their products or releasing social media posts targeted to “micro-segments” of their target audience to increase engagement and conversion.
Sustainability has become a big deal for customers these days, and companies are keeping up. One international survey discovered that two-thirds of global consumers would be willing to pay more for eco-friendly businesses and products. To adapt to this, many companies are taking steps to be more environmentally conscious and are ditching plastic packaging. They even include details on where the materials come from and how they can be recycled. Plus, many brands are providing customers with data on their carbon footprint. All these changes encourage customers to shop with brands that share their sustainable values while also providing a bright economic future for companies that follow this DTC eCommerce trend.
It's becoming more and more common for younger generations to shop through social media posts. This is called social commerce, and it allows consumers to make a purchase directly from their favorite social media app without going through a long checkout process on a regular e-commerce website. Social media platforms are working hard to keep users online and active longer, and since they get a piece of the profits from social commerce sales, they're motivated to continuously improve their in-app social commerce systems. In 2023, it's estimated that social commerce will be worth $30 billion, which is about 20% of the entire e-commerce market. And with Gen Z dominating TikTok, it's predicted that if this trend continues as it is now, social commerce could reach a staggering $2.9 trillion by 2026.
People around the country and around the world are starting to feel the pinch of inflation, as Deloitte’s data reveals. Consumers are concerned about their financial security and the economy due to the increasing cost of goods and services, no matter what industry or area of the country they’re in.Even those with higher incomes are watching what they spend, which translates to inflation having a significant impact on spending decisions. This financial phenomenon becomes a factor in our list of DTC eCommerce trends for 2023 because it impacts every aspect of consumer decision-making and spending. This trend makes it crucial to dial down on your core value proposition and drive that point home in every piece of marketing material you create, making it impossible for consumers to ignore.
SMS marketing is a quick and effective way to get your message out to your target audience quickly. Even with a deluge of new marketing techniques appearing on the horizon, SMS marketing is still an incredibly dependable tool for engaging with customers and increasing conversions. SMS marketing has an amazing 98% open rate, and a full 77% of customers have a positive outlook on companies that use text notifications, thus making it a competitive DTC eCommerce trend for 2023.
With the increasing popularity of DTC eCommerce, many brands are turning to eCommerce subscription programs to increase customer retention and satisfaction. This DTC eCommerce trend is rapidly growing across both goods and services brands for everything from consumer commodities to luxury products to media streaming.This model provides a number of benefits for customers, including widespread special-pricing programs, consistent and predictable supply, and often, the opportunity to earn loyalty points or other rewards. Merchants, too, can enjoy the predictability of getting consistent revenue and stable sales figures, making subscriptions a win-win for everyone involved.
Advertising a new DTC eCommerce brand with PPC(Pay-per-click) and similar media used to be a breeze. You just had to set up a website and a few paid ads, and you were ready to go. But this was before iOS 14, and Google’s planned sunsetting of third-party cookies in 2024 shook things up. Now Apple users have far more control over how third-party apps use their data, in addition to advances on the cookieless marketing and data privacy fronts, making it harder for advertisers who rely on data to target customers effectively. Today, DTC brands need to go back to basics and build a brand foundation that isn't completely reliant on pixel data in order to target and acquire customers. Now, marketers need to get creative when it comes to finding ways to attract customers by utilizing SMS, email, print, or even offline media, or by taking advantage of aggregate data and other targeting methods to find their customers online.
Apple and Google aren't the only ones who've changed the game with their updated privacy policies. Former marketing mainstays like third-party cookies from Chrome are also slated to disappear by mid 2024 the end of 2023. Tracking and customer data aren’t going anywhere, but DTC brands need to get creative about capturing customer info, potentially through methods such as aggregate data or zero-party data, which is categorized as data customers give your brand on purpose. One perennially tantalizing way to do that is through quizzes. If you’ve ever found yourself scrolling Facebook for hours, hopping from one poll or quiz to another, you know how addictive this method can be to consumers. People love to talk about and learn about themselves, and with this trend, brands can take advantage of that by offering quizzes that coyly gather “zero-party” data for them on the back end, nixing the need for third-party cookies and trackers.
Riding the wave of ever-expanding online shopping preferences, some Consumer Packaged Goods (CPG) brands are venturing into the DTC eCommerce world. Take Gillette, for example - they've now gone beyond the traditional retail store sales model with their online store, giving more options to customers who want to buy their famous razors. Traditional retailers, like Gillette, who are new to the DTC eCommerce space will need to grab a piece of the pie and persistently use the same approaches and methods that have helped digital-first companies succeed. This DTC eCommerce trend gives brands a chance to more closely direct messaging and marketing initiatives going forward, creating opportunities for branding and growth that can be hard to capture in the B2B space.
DTC marketers who want to be successful in the future need to find ways to blend their story with their customer's story and drive them from "rented" platforms, like TikTok and Octane AI, to an owned space; i.e., a closed community platform or email list. It's not unusual for social media giants to rearrange how details are shown on feeds, adjust their algorithms to make more money, and suddenly switch elements that have been formerly crucial to the success of DTC eCommerce brands to follow customer preferences.This can cause sales and revenue to nose-dive, however, leaving brands scrambling to adjust. A great example of a brand that avoided this nightmare is Jones Road Beauty. They use targeted TikTok ads that encourage users to take a beauty quiz, then enter an email address to see personalized results and product recommendations. This helps Jones Road capture relevant customer data while also building up its “owned” audience on its email list, creating a “closed community” that TikTok and other platforms can’t take away.
Influencer marketing may no longer be a totally innovative idea, but it's certainly a great way to spread the word about your brand. If you're wise about who you partner with, you can tap into a great pool of potential customers.To take advantage of this key 2023 DTC eCommerce trend, start by looking for an effective influencer that you would want to be the face of your brand online. Preferably, this will be someone with a large and growing audience in your target market, an influencer who shares your brand’s values and also has great follower engagement metrics. This combination of factors will help ensure you have a win-win collaboration with your influencer and get the sales and branding boost you’re looking for along the way.
Taking user-generated content into account on DTC websites and social media is not the only response to changing customer preferences. In addition, since consumers reliably prefer to buy a product they've heard about through word-of-mouth or social proof rather than through branded content, this creates a great opportunity for DTC businesses to establish lucrative affiliate programs and take advantage of this trend. Increasingly, DTC eCommerce brands are embracing adding affiliate programs to their marketing strategy. Consumers have shifted towards purchasing from brands they share values with, consequently, spending on affiliate programs has increased five-fold since 2012 and doesn't look to be slowing down anytime soon. Brands that want to "ride the wave" of this DTC eCommerce trend would be well-advised to start sooner rather than later in order to capture the most gains.
14. User-Generated Content (UGC)DTC marketers have responded quickly to changing customer priorities and values, and nowhere is this more apparent than when it comes to User-Generated Content, or “UGC.” UGC is a particularly hot topic right now for DTC brands, with a noticeable increase in usage across all industries.Glossier is a great example of UGC leveraged for marketing. When browsing products on their website, consumers can take in genuine reviews, pics, and videos from customers to help them make their buying decision. It’s a whole new kind of word-of-mouth marketing for a whole new year.
While shopping for almost anything online these days is easy and convenient, nothing can replace the experience of visiting a physical store, picking up an item, and trying it on.
Digital retail technology, however, is making tremendous progress in using augmented reality (AR) to close the gap between online and in-person shopping experiences. Brands can expect to see increasingly more DTC eCommerce sites leveraging AR to make their online shopping experiences more “lifelike” in 2023 and beyond.
To make shopping more stress-free for customers, many brands are now creating omnichannel eCommerce platforms. This allows consumers to buy online and return in-store if needed, ensuring that they have a hassle-free buying experience.
Additionally, integrating digital channels with offline ones ensures that any company can maintain a consistent, unified, brand image across all devices, which ultimately boosts brand awareness and customer trust.
Chatbots have become more and more popular for DTC eCommerce sites, and this trend indicates that this is a pattern that will keep going. Brands that use chatbots for customer service have noted that chatbots can be a huge time saver for staff, eliminating up to 92% of customer service tickets.With the advancement of cheap and easy-to-use AI technology and with customers becoming increasingly accepting of chatbots, eCommerce brands of all types will continue to expand their use of automated tools to address product queries, deal with orders, process returns, and provide general information throughout 2023 and beyond.
NFTs will still be popular in 2023, and if your target audience is tech-savvy, offering NFTs to them can spell success for overall customer retention. When it comes to leveraging them for marketing campaigns, NFTs can be offered as loyalty rewards in a customer retention program and used to create a sense of community, which is nothing but beneficial when it comes to driving marketing costs down and returning customer rates up.
Artificial Intelligence (AI) is a major asset for omnichannel marketing strategy planning, allowing brands to optimize the customer journey and maximize revenue potential in real-time. AI programs are especially effective when it comes to projecting demand, predicting the success of new product features, planning marketing campaigns, and informing design or color trends for a product's lifecycle. AI automates these activities, drastically cutting down the amount of time required for planners to collect, analyze, and make decisions about the vast amounts of data most DTC eCommerce brands now collect on a daily basis.
Sending colorful, punchy emails with flashy logos and other branding elements is a tried-and-true method of boosting open rates. Unfortunately, it also increases the risk of your message being filtered into the "promotions" or "spam" folders. With customers receiving so many promotional emails each day, brands need to be laser-focused on making sure their message gets seen.
To make sure their emails are consistently opened, many DTC brands are now blending plain-text messages with stylish newsletters for 2023. Plain-text emails are more personal and have a better chance of arriving in a consumer's inbox without a hitch. That's not to say that bold, graphic-filled emails are dead for 2023, but marketing teams should carefully weigh the pros of having a beautiful email template with the cons of potentially having their consumers never see it at the bottom of their spam folders.
Regardless of your favorite musical decade, you can't deny that the ‘70s had a cool aesthetic. DTC eCommerce brands are taking advantage of this in 2023, and iconic ‘70s looks like jumpsuits and thick mustaches are back in full force in many marketing campaigns. Brands don’t have to change their entire persona to take advantage of this trend, however - something as small as changing up a color scheme on an email campaign or subtly adjusting the font on key branding materials can help create the “groovy” feel consumers are down with this year.
How Elastic Path Can Help DTC eCommerce Brands Thrive in 2023
Start your 2023 off right with all the tools you need to rock your DTC eCommerce strategy in 2023. If you’ve been wondering how to optimize and scale your business with a better version of commerce, Elastic Path’s DTC eCommerce solution might be just what you’ve been searching for. Not sure what your brand needs most to move your commerce strategy forward? No worries - our experts are here to help you find the right solution for your unique brand. Get in touch with us today and get ready to experience a new level of success.