5 Trends Shaping E-Commerce and Retail in North America

The retail landscape has undergone a seismic shift in recent years, propelled by the rocket fuel of ever-evolving buying habits, inflation-driven price sensitivity, and the aftershocks of global conflicts.

This article explores the trends that show the evolution of shopper expectations, the challenges faced by marketers, the methods employed for segmentation, and the current and anticipated technologies for enhancing marketing programs. Let’s dive in.

Trend No .1: Strangled by Acquisition Costs: Marketers Long for Innovation, But Can't Afford it

Eighty percent of marketers prioritize enhancing the shopping experience, a stark departure from the traditional focus on customer acquisition. This move reflects a crucial recognition: loyal, satisfied customers are the lifeblood of any business. Companies must aim to cultivate long-term relationships and drive sustainable growth by fostering positive and memorable interactions across channels.

However, this journey has its challenges. Nearly 70 percent of marketing leaders anticipate budget constraints due to economic difficulties. The question remains: Can companies deliver exceptional experiences while navigating economic limitations?

Trend No. 2: Paid Media Will Continue to Grab a Major Portion of Marketing Budgets

On average, marketing leaders utilize over 35 percent of their budgets for paid acquisition. An alarming one in four will use over half their marketing budget to acquire new customers. Amidst the booming ad industry, a shadow of concern creeps in. Eighty percent of marketers foresee soaring customer acquisition costs (CACs) being a significant challenge to their business. This chilling premonition paints a picture of budgets stretched thin and marketers struggling to optimize spending in an ever-shifting landscape.

Trend No. 3: Owned Media Crushes Paid Media in Effectiveness

The growing prevalence of paid ads in marketing strategies is undeniable, but industry experts increasingly recognize the substantial influence and higher return on investment offered by owned media channels. A survey of North American marketers underscores this shift, highlighting the prominence of owned channels such as email, SMS, web messages, and WhatsApp. These channels are now seen as more valuable than paid advertisements, emphasizing the strategic importance of leveraging owned media to maximize the impact of marketing campaigns.

Trend No. 4: Email: Ignore it at Your Peril

Email is projected to account for 30 percent of North America's e-commerce and retail revenue, solidifying its status as a digital powerhouse due to its laser-sharp targeting and segmentation capability. Beyond generic batch-and-blast methods, it enables the crafting of personalized messages that resonate with diverse audiences by delivering tailored content, promotions and recommendations. Additionally, Inbox Commerce is revolutionizing email marketing, allowing retailers to incorporate in-app and web functionality directly into emails. This innovation enables consumers to search and shop in an email, and take a variety of commerce actions within the inbox.

Trend No. 5: Retailers Will Bet Big on Gen AI

Approximately 64 percent of North American marketing leaders anticipate that generative AI will significantly influence retail and e-commerce in 2024. This technological revolution promises to transform how retailers interact with customers, personalize shopping experiences, and streamline operations. As businesses increasingly integrate AI into their strategies, the shift towards more dynamic, AI-driven models is expected to enhance consumer engagement, optimize inventory management, and drive sales, marking a new era in the industry's evolution.

Conclusion

Navigating the turbulent waters of retail and e-commerce requires innovative strategies and a shift toward creating exceptional shopping experiences. North American retailers, under pressure to manage budgets and adapt to market changes, are increasingly leveraging owned channels and generative AI for personalized engagement and sales growth. The challenge lies in balancing costs and embracing data-driven insights to unlock the full potential of these technologies and maintain sustainability in a competitive landscape.

To better understand the North American e-commerce market, download Netcore’s Report: State of Ecommerce and Retail Marketing North America 2024.

Nick Einstein is vice president of product marketing at Netcore Cloud, a marketing automation platform.