As we approach 2023, small to medium-sized businesses (SMBs) are outlining new strategies to meet growing macroeconomic challenges.
Chief Executive Officer (CEO) Brian Anderson balloon nuggetTechCrunch, a California-based data orchestration company, has compiled five themes and trends that merchants should focus on to boost their digital commerce and customer engagement in 2023, amid challenges.
Trend 1: Increase in digital advertising costs
Digital advertising costs will increase even more in 2023 due to device and browser privacy policies such as Apple’s App Tracking Transparency (when an app asks you if it can track you) and tighten up, Anderson said. Merchants will find it more difficult to target new customers and have less knowledge of what works and what doesn’t.
Apple’s policy changes fluctuate throughout the supply-demand curve, and that trickles down to other tech systems that use their platform, and then subsequently to SMBs, who really get hurt, Especially if they relied heavily on digital advertising.
The social media platforms hosted on Apple’s App Store and which provide most advertising services to merchants are looking for a way out. Anderson said, for example, that Meta would invest heavily in capital expenditures to bypass Apple’s infrastructure and policies, furthering Zuckerberg’s vision for the Metaverse.
“What Facebook was really providing here was this: You can be a new startup that’s doing really well online, you don’t need this huge marketing team with millions of dollars to operate and compete, just There is an abundance of data. Well, what this policy effectively does is it removes that, and it gives mid-market operators and enterprise operators a competitive advantage in the marketplace. So, you know, its implications are significant,” he said.
Meta is also betting that AI-powered algorithms and predictive analytics will solve the problem, however, its infrastructure is not where it needs to be to support heavy AI solutions for the masses, Anderson said.
Retailers that provide first-hand data and a better user experience will have a significant competitive edge and will be able to offset increased digital advertising costs with higher conversion rates and larger cart sizes.
Trend #2: Macro-economic pressures to drive conservative capital outlay
Anderson said that consumers’ discretionary wallets are facing higher inflation and interest rates following loose monetary and fiscal policies during the pandemic.
As a result, commerce leaders will reconsider the significant capital outlay in 2023. Rather than making risky and costly platform changes, merchants would look to extend the life of their existing technology systems, regularly assess the market, and add technology upgrades accordingly and gradually.
Anderson pointed out that the housing market issue in Canada is a “recipe for stagflation”, and will significantly impact growth and technological upgrades for companies. “When they put up capital, they want to make sure they’re maximizing their ROI as quickly as possible. And I think the risk and time associated with those large projects makes it difficult for them to dismantle the whole system and Will make it a bit unfavorable to install the new system.
Trend 3: Headless commerce to become the norm
Headless commerce, an ecommerce model that separates the backend operating system from the front shopping interface, is gaining traction for its speed and agility, and will give merchants an advantage in 2023.
“Implementation without leadership in isolation would be considered unwise, so in 2023, top business leaders will be looking at leadership without the context of their broader company vision and technology strategy.” Said Anderson.
Trend 4: Storytelling is key to a company’s brand
Top commerce brands are expert media creators and storytellers. Merchants can only want to compete when they start leveraging technology to produce and deliver great content across their channels and shopping interfaces while avoiding the risk of commoditization.
“2023 will be the ‘Year of the Great Differentiation’ as merchants look to technology to appropriately syndicate relevant information to personalize online shopping experiences.” Anderson said
Trend 5: Data flow to become engineering focus
Merchants will favor vendors that focus on solving a problem and make that solution 10x better than monolithic platforms.
“Most vendors offer an API, yet forward-thinking CTOs know that an API is not enough; Data flow from a network of individual best-of-breed vendor solutions becomes the key to success. In 2023, smart architecture work will implement best practices in this distributed world, and engineering patterns such as data normalization, event replay, data transformation, and abstraction will become the norm,” said Anderson. “Getting new technology updates to the right partner is also important as a merchant, especially when your human capital needs to be adjusted accordingly. Merchants should migrate their talent team in conjunction with a systems integrator partner who can complement the work being done by the internal team.
