From augmented reality to sustainability, PayPal’s Maeve Dorman outlines five e-commerce trends that defined 2023 and will continue into 2024 and beyond.
Five years into what has proven to be a foundational transformation of the e-commerce landscape, consumer behaviour continues to evolve and adapt.
This year, consumers began embracing new technology in their buying journey, while also looking to make their Euro stretch as far as possible. These factors also affected businesses that looked to sharpen their omnichannel strategy, make greener options more affordable and attractive, and put cybersecurity top of mind at checkout.
“The glow of the omnichannel boom began to fade in 2023, replaced with a more targeted approach aimed at meeting Gen Z online”
As we head into the holiday season, these are the five trends that defined e-commerce in 2023 according to the Think Forward report:
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Immersive Virtual Shopping Experiences
The rapid rise in public interest around augmented reality (AR) and virtual reality (VR) in recent years led to more widespread brand adoption of the technology in 2023. Ireland’s AR and VR market is booming, with Dublin becoming a hub for tech innovation and attracting top talent. In 2023, the revenue in the AR and VR market in Ireland was projected to reach US$108.9m according to data from Statista.
Brands such as BMW Group, Maison Valentino, and IKEA partnered with tech giants, including Meta, Google and Qualcomm, to create enhanced shopping experiences and pre-purchase solutions. These technological innovations opened the door for a new level of personalisation. By letting a consumer see how a potential purchase could look in their space, for example, brands are minimising perceived risk as well as reducing potential operational costs of returns.
Personalisation is at the core of these solutions, enabling the consumer to see how an item might look on them or in their space enhances their buying experience and minimises the perceived risk that their purchase might not be as expected.
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Non-Gaming Brands Going into Streaming
The glow of the omnichannel boom began to fade in 2023, replaced with a more targeted approach aimed at meeting Gen Z online. In the hopes of encouraging more serendipitous discovery into the customer experience, brands such as H&M and Shopify partnered with online gaming and streaming platforms to make consumers part of the brand experience and amplify moments of joy while driving purchase activities.
TV streaming platform Roku partnered with Shopify to offer direct in-app purchases from TV screens. When an ad from a Shopify merchant appears, viewers select ‘OK’ to learn more and make a purchase. The integration gives Shopify advertisers additional customer data and insights into purchasing trends while making it easier to navigate from advertisement direct to purchase.
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Going Green for Less
With sustainability still at the core of consumer behaviour but sustainable consumption on the decline, brands looked to reduce this gap by offering eco-incentives and making green options more affordable overall. Boutique chain hotel, The Hoxton, for example, introduced a reward for guests selecting sustainable travel. Meanwhile, FutureCard provided cash back rewards to those who used their cards to purchase low carbon goods and services, and Carrefour became the first French retailer to be awarded the national ‘anti-food waste’ label for its commitment to sustainability-focused measures, including selling some perishable products at a deeply discounted rate.
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Repair Not Replace
Budget-conscious consumers drove a worldwide trend to embrace a repair and reuse mindset. Brands such as Nokia, Nike and Zara all jumped in, creating tools and services that help extend the lifespan of their products. These solutions included the use of innovative technology, such as 3D scanning, but more often than not, tapped into the growing DIY movement, which allowed customers to repair goods themselves while building brand loyalty.
Similarly, the second-hand economy boomed in 2023. According to PayPal’s Resale Renaissance report, more than three quarters (78%) of people in Ireland purchase preloved items. While saving money was the leading reason for 59 per cent, going green is clearly influencing consumer behaviours in this space as well, with a third (33%) choosing second-hand in order to be more sustainable and a similar proportion (31%) doing so to reduce waste.
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Security Continues To Be King
Almost €85 million was stolen through payment frauds and scams in the Republic in 2022, an increase of 8.8 per cent on 2021, as the number of fraudulent transactions increased by 12.7 per cent ((BPFI, July 2023). As fraud continued to become a problem, businesses found innovative ways of addressing security and trust issues at checkout.
As digital tools and big data continue to advance and potentially create more points of vulnerability, merchants continued to turn to trusted financial service operators such as PayPal to implement smart technology to help protect customer financial data, payments, and eligible purchase.
Security including biometric login, passkeys, encryption, and machine learning and device intelligence became table stakes in helping make the commerce experience fast and secure and giving customers peace of mind at checkout.
Across the board, in 2023, consumers became not only more planet-conscious but also price and security conscious. Those that were able to meet these new expectations, while keeping the consumer in mind across the buying journey, were able to stay ahead of the curve. Building brand loyalty while remaining true to the ever-evolving customer journey.
At PayPal, we’re on a mission to make commerce better for everyone – people and businesses. You can read more about the data and trends above in our Think Forward report.
