Learn how to adapt to the new market of 2023 and find out what pricing strategies work best for your e-commerce.
2023 is emerging, and the world is looking at a new normal after some quite turbulent years which have turned the world upside down. In 2020 the world was hit by the pandemic, which significantly boosted the e-com business. In 2021, we had a post-pandemic year, which caused a decrease in online sales. Then in 2022, the war in Europe, increasing energy prices, and high inflation ruled a lot of businesses out, others fighting, and others who have adapted to this new reality.
So what can we then expect from 2023? We will see the light at the end of the tunnel. 2022 ended positively in the e-com, with November extending the index of 2021 and December reaching the same level as last year. Is this the point of direction for the year in hand?
When it comes to pricing and product management, a lot of new demands are increasing in the business of 2023:
– Need to work with data-made decisions
– Need to outsmart the “old” way of doing things
– We cannot just determine the price on the market anymore based on factor calculations.
– A value-based pricing model in a B2C market is close to over (Not even Apple manages to succeed with this model anymore)
– Stock levels are still high due to the last years of backlog.
– The amount of internet users is increasing, and e-shoppers are reaching the same level as in 2020
So. Where does this put the E-Com market in 2023?
Demand for online presence
For endless consumers, the availability of online shopping, comparison, and understanding of the market has never been higher, with 91% of the European population using the internet, 75% of these bought goods online in 2022. So even with all the doomsday talk, the consumers are present but have new and higher demands, e.g., the pricing of each product.
In a survey conducted by Google, 56% of all in-store shoppers acknowledge that they often use the internet to get more information about the product and compare prices online before making a purchase. So, to be frank… Consumer behavior is changing, and you need to adapt to that.
Expectations and best practices
Many trends are arising when looking at the e-com sphere in its current state. However, it also becomes clear how some companies need to adapt to these new trends and struggle to do so. Currently, it is a race of competencies and know-how vs. living in the pandemic time, where all consumers were buying with a massive purchasing power. Now only agile and change-adaptable companies strive and succeed.
One of the significant aspects you as an E-commerce need to have in mind is that the consumers, to a greater extent than ever before, are incredibly price sensitive. For you, it is now a matter of figuring out the best possible price, which makes the consumer purchase your products, and still allows you to earn money. A simple factor calculation is passé and will most likely send on to the valley of death.
Instead, the year 2023 will require you to understand the following about all of your products:
Performance
Conversions rate
Sales amount
Deadweight
Product site visitors
Stock level
How is the amount of products in stock on each product
How is the stock level at your competitors, and at which time
Product information
What is your gross margin
What is your actual cost when selling your product
Market information
How does the competition look like per product
What is the average price of your product in the market
What is your current price position in the market compared to your competition
This requires an impactful insight into all of your products at any time. Knowing this information and combining them will allow you to have a robust intake on the market, position your price on the products and work with the know-how on optimizing your sales. Stop the race to the bottom and start getting higher conversions on your products with a reasonable profit margin.
Conclusion
2023 is a year of changing and adaption to a new normal. We expect to see a market reaching the level we can hope for years to come, with more linear growth. With continuously growing Internet users and e-shoppers in 2023, the truth of how an excellent online merchant will divide the herd.
Data is key and will continue to be critical. Consumers are more informed and can see through various campaigns. Transparency and understanding of your product’s behavior and the market will be essential to succeed with pricing this year.
Luckily, we at tgndata will always be ready to help you succeed with your online sales.
Better decisions can only
come from better data.
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