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8 Logistics and ECommerce Predictions to Follow for a More Stable 2023

Geoff Whiting

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After the past couple of years, making eCommerce predictions or those about the logistics industry in general still feels risky. However, patterns have emerged that may point the way to what’s next.

Markets are reshaping eCommerce brands and supply chains, and we expect a renewed emphasis on growth at a steady, protected pace. So, in the name of stability, here are eight  eCommerce predictions that may help companies like yours build a better foundation in 2023 and beyond.

eCommerce predictions from our crystal ball

ECommerce Predictions 1
Understanding and retaining customers remains job #1

McKinsey data showed that 75% of consumers tried a new brand in 2020, and most people (nearly 70%) stuck with these new brands in the following years. That means nearly all eCommerce businesses have a slightly different customer base than they did before COVID.

While those shifts happened, acquiring new customers and maintaining competitive advantages in the space both became significantly more expensive. The new competition has pushed average online ad costs more than 50% higher than years prior, while stores local to shoppers have completely reopened.

Customer choice is back. The eCommerce brands that succeed in 2023 will have a deep understanding of shoppers’ choices and the reasoning behind their decisions. The year ahead is an excellent time to expand your efforts to connect with your customers. Leverage the data you have to create stronger relationships.

ecommerce predictions put shoppers in control

ECommerce Predictions 2
The spending pendulum swings back

After two years of rapid eCommerce growth, we’re seeing a slowdown in this sector and retractions in economies as a whole. Things are getting more expensive, people have less to spend, and more options are fighting for those dollars.

We don’t think the pendulum has fully swung back just yet. That means many shoppers will tighten budgets further, especially if they’re in core groups just entering the workforce, looking to buy homes, or potentially impacted by layoffs at large tech brands.

This prediction reinforces the need to maintain a focus on customer understanding in 2023. Optimize your budgets and prioritize customer research. Then, act on that data. This could be a year we see many well-known eCommerce brands introduce new products or smaller versions of popular items aimed at price-conscious consumers.

ECommerce Predictions 3
Get your head in the cloud

When the logistics and eCommerce markets are topsy-turvy, it can be hard to find the ground. Embrace some of that uncertainty and let your head stay in the clouds. Now is the time to climb and get this vantage point if your head isn’t there. But what does that mean really?

ECommerce brands need to start understanding the bigger market forces impacting them beyond fluctuating freight rates. Your customers are under significant, varied pressures, and we’ve seen those impact sales during 2021 and 2022. Watch these and the areas that affect your core operations.

Begin by tracking consumer price indexes and regional buying power. Get a feel for how your best buyers are spending or pulling back. Refresh this view regularly. For the ops side, watch the commodity markets. Monitor commodities that impact the production and inbound distribution of your products. Raw material pricing has been very volatile, and tracking both pricing and the players (impacting you and upstream partners) may help you discover ways to strengthen your supply chain.

ECommerce Predictions 4
Fulfillment will help eCommerce businesses stand out from the competition

The importance of order fulfillment for eCommerce success is not new. However, in 2023, fulfillment will gain prominence as a driver of consumer satisfaction with online retailers. The process of picking, packing, and shipping orders is mostly invisible to the end consumer. That changed in 2020 when a massive spike in demand led to backlogs and delays for some companies.

We’ve seen consumers keep their eyes on fulfillment ever since. Not only are reviews increasingly mentioning delivery times and accuracy, but they’re also playing a role in the growing discussions around returns.

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A robust partner like Red Stag Fulfillment should help you tackle these concerns with guarantees around fulfillment accuracy and speeds. A strong plan and partner are some of the best ways to grow your business.

ECommerce Predictions 5
Talk to providers about space and capacity

Warehouse pricing and availability have seen multiple highs and lows as eCommerce brands and giant marketplaces built up during heavy sales and then started pulling back as economies slowed. At the end of 2022, there are millions of square feet of industrial and commercial warehouse space being built by private developers, while real estate costs remain close to all-time highs.

Grabbing space is tempting, but expensive leases and high operational costs should give you pause. Instead of racing to your own warehouse space, speak with your 3PL. See if they’re expanding and have room for you to grow in the coming years. You might get access to the space you need without heavy upfront costs or long-term operational expenses.

Include carrier capacity in these discussions

Major carriers like FedEx, UPS, and USPS reached the limits of their capacity in 2020 and 2021. They struggled to deliver packages within the promised delivery windows and raised fees significantly as they invested in larger networks.

The 2022 slowdown has shifted the challenge. Carriers have largely been able to meet all capacity demands and, in some situations, even offered more favorable rates to partners like us. At the same time, we began expanding facilities and eCommerce shipping options.

Carrier capacity isn’t as big of an issue as in the past, but your partners still need a plan. And they should be willing to share that with you. It’s what reliable, expert partners do.

Try expert fulfillment to keep your business running smoothly

ECommerce Predictions 6
Diversity becomes even more important

Again in 2023, we’ll continue to beat the drum and recommend that you diversify a wide range of your operations. While this commonly includes adding regional carriers to your last-mile efforts, our prediction is that this will take on a much larger and more important role in 2023.

The COVID-19 pandemic started conversations around re-shoring and near-shoring, but those are long processes. Plus, there hasn’t been much certainty in any region’s ability to protect operations and staff. The next decade will see some of this uncertainty even out while new production regions rise.

What logistics professionals should expect is for supply chains to build multiple redundancies and eliminate as many single points of failure as possible. The change will be how far this reaches upstream and downstream. Two parts suppliers that depend on the same mine for raw materials don’t mitigate that single risk of bringing down a manufacturing line, for example.

As economies emerge from the pandemic and investment in things like lithium battery manufacturing get underway, logistics professionals will start looking for safer, stronger supply chain options. Service and material providers will start competing against companies near and far based on their capabilities and the strength of their supply chain redundancies.

Business Integrations are key to capitalizing on our ecommerce predictions

ECommerce Predictions 7
AI’s role will shift

Automation and AI tools are spreading into a wide range of eCommerce operations. There’s a good chance either you or a company you rely on used AI to create part of its website, offer customer service chatbots, schedule freight, select carriers, or take on several other tasks.

In some cases, AI does this without human intervention. That’s caused many to think AI will be a replacement for teams and operations. Instead, we’re predicting that AI in eCommerce and logistics will feel a bit more like the self-checkout at any grocery or convenience store. Automation will be there to improve and speed up processes, but it still requires input from customers and guidance from human hands.

Seek inspiration from other applications

Like self-checkout options, there will be people waiting in the wings to address issues and ensure a good customer experience. In logistics, this means regularly reviewing selections to manage the cost and speed of services, verifying safety in transit, and monitoring any element that could impact cost or capabilities. For eCommerce, this means verifying chatbots provide the right results, ensuring carrier selection balances speed and cost, and monitoring customers to spot potential areas of frustration.

Red Stag Fulfillment Technology helps with ecommerce predictions and meeting demands

ECommerce Predictions 8
You and us, we’ll be IT companies soon

Well, maybe not IT companies fully, but it’s going to be a lot more of what we all do and how we interact with partners and end-consumers. That’s because data, integrations, and sharing are moving from the “nice-to-have” options of the RFP to the “must-have” sections.

Speaking of RFPs, we’ve got a free 3PL RFP template here if you’re in need

ECommerce companies and their partners need access to real-time data to make significant business decisions and adapt to dynamically shifting markets. That’s as important to customer service and order updates as it is to restocking, tracking freight, and deciding where to spend your marketing dollars.

Many eCommerce and traditional commerce brands are holding way too much inventory as the year comes to a close, even after a banner holiday season. That means it is time to rethink the pricing of services and goods. Understanding the shifting total cost of fulfillment and storage will position eCommerce brands better to respond to market pressures and protect operations. Real-time data, API access, customizable dashboards, and other integrations are needed for this now.

You need access to all that data and support now. Partners like us need to help you get it. This trend has been growing for a while, but it’s speeding up rapidly now that we’ve seen how quickly forecasts can go awry. It’s the support you deserve.

So, thinking bigger here, every logistics company will also be an IT company in the coming years. It isn’t a stretch to think of eCommerce companies in the same way.

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Start planning for a successful 2023 now

We’re all going to talk a whole lot more, and that’s good news. Forecasts, disruptions, hiccups, and shifting demand will make data sharing and partner support a core pillar of success in 2023.

Now is the right time to discuss 2022 successes and failures, and plans for 2023 with all partners.

ECommerce trends are shifting faster than ever, quickly impacting budgets and forecasts. We expect the same to continue in 2023 and beyond. Ignore the cliché of expecting the unexpected and start organizing for disruptions and changes. Work with partners to build a solid plan for different breaks in your supply chain.

No matter what 2023 brings, Red Stag Fulfillment will continue to do its best to help our clients adapt, respond, and thrive. When you have a question or want to know more about what we’re doing, such as building additional warehouses in Sweetwater, all you need to do is ask. Our experts are just a click away.

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