Economic Woes. The economic slowdown has forced brands to adapt to economic uncertainty, resulting in strategic pricing, timely discounts, new income streams, and cutting overhead costs. Customer loyalty is a key focus for 2023, with businesses investing in retention to build trust that can outlast a recession. However, the economic uncertainty and higher prices are causing buyers to spend less, with shoppers switching to lower-priced brands and merchants seeing shrinking average cart sizes, less site traffic, and lower conversion rates.
This trend originates from the report:
Shopify - Commerce Trends 2030
Adapting to economic uncertainty is the only sure strategy. Brands are responding with strategic pricing, timely discounts, new income streams, and cutting overhead costs. However, one of the most important areas of focus for 2023 is customer loyalty.
Businesses are building trust that can outlast a recession by investing in retention. The World Trade Organization (WTO) estimated a merchandise trade volume growth of 3.5%61 in 2022— down from the previous forecast of 4.
7%.62 The WTO expects trade volume growth to drop to 1.0%63 in 2023, and the economic uncertainty and higher prices are causing buyers to spend less.
Over 40% of shoppers switched to lower priced, private-label brands at grocery stores in 2022. According to a survey of global Shopify Plus merchants, 35% have seen shrinking average cart sizes, and 50% are seeing less site traffic and lower conversion rates..