If this year’s Black Friday and Cyber Monday (BFCM) shopping season has shown us anything, it’s that consumers are still willing to part with their money despite rising inflation and living costs, providing they’re getting a good deal on good quality products. So, what does this mean as we head into the new year? asks Shaun Broughton, Managing Director APAC, Shopify.

For any business involved in retail, the way 2022’s BFCM sales season played out offers some insight into how retailers might be able to make the most of evolving consumer appetites in the new year.

For context, Australian merchants on Shopify enjoyed a 22.7 per cent increase in consumers purchasing goods compared to 2021. In fact, Australia ranked fourth globally in terms of total spend, with shoppers in the local market spending roughly A$162.27 per order, on average, throughout the BFCM weekend. Last year’s average was A$155.73, so growth is there.

This reflects the global trend, with 52 million consumers worldwide purchasing from independent brands powered by Shopify during this year’s BFCM weekend, a 13 per cent increase from 2021. These figures clearly show that consumers’ desire to buy goods is by no means diminished by current market conditions, even if how they choose what they buy has evolved in line with macro trends.

The retail trends to expect in 2023

An increase in conscious and purposeful consumption, particularly around environmental sustainability, and a renewed focus on finding value for money, especially when it comes to quality products, are just two of the trends that are emerging, according to research conducted by Shopify in the lead-up to the 2022 BFCM sales season.

The quest for quality makes a comeback

Although price remained a driving factor in customers’ purchasing decisions during the 2022 BFCM season, with 84 per cent of consumers expecting to compare prices to find the best discounts in the lead-up to the sales weekend, the pursuit of quality is rising as a point of differentiation for retailers.

Over two-thirds of consumers in Australia – 69 per cent – planned to spend money on higher quality products that they could expect to last for a long time during this year’s BFCM shopping window. This focus on quality over price recalls an earlier era in which well-made and long-lasting goods were typically sought over less expensive and potentially inferior products.

With a clear shift to more considered spending habits, retail businesses have the chance to compete on quality in 2023. While cost will always be a factor in competitive differentiation, the growing desire for quality is likely to present businesses with another competition option beyond the typical race to the bottom that sales seasons usually depend on.

Values-driven buying leaves little room for compromise

Each of us has values that we hold dear, and more than a few values are shared among many of us. This is reflected in people’s buying habits. More than half (51 per cent) of consumers surveyed by Shopify in Australia and New Zealand say they shop sustainably now, and plan to either continue with their efforts or be more sustainable in 2023.

Retailers clearly see the importance of sustainability in their value proposition to consumers, with 52 per cent of Australian businesses surveyed by Shopify running sustainability as a top priority.

In the coming year, sustainability as a point of differentiation is only going to become more prominent and important, offering retail businesses a new way to compete against players whose core strategy is to undercut the competition.

Omnichannel omnipotence leads to multi-platform purchasing

One of the big trends Shopify saw emerging at the beginning of this year was the post-pandemic customer journey bringing about the next phase of omnichannel shopping. We can expect to see even more of this in the coming year, with social media channels, in particular, set to play a bigger role in how brands sell to consumers.

Shopify’s recent research shows that younger respondents in the region are highly receptive to new touchpoints, such as shopping for products directly through brand social media channels. Merchants understand this need, with 31 per cent of Australian businesses surveyed by Shopify believing that sales through social media will form the largest part of their business by the end of the decade.

This is important. Allowing consumers to shop anywhere is one way businesses can enable a more sustainable future for their commercial engagement, empowering customers through choice. By finding ways to make online and offline shopping experiences consistent while also utilising social media channels and social selling, retailers have the chance to capture more sales in 2023.

New expectations lead to even tighter delivery turnaround

With costs having gone up in line with inflation, retail businesses are no doubt looking for ways to minimise costs and streamline operations for greater efficiency. One area retailers shouldn’t try to cut costs, however, is in shipping and logistics.

For example, despite the burgeoning interest in sustainability, just 55 per cent of Australian customers surveyed by Shopify said they would be willing to wait longer for a product to arrive if it comes from a sustainable supplier, compared to 60 per cent globally.

Quick delivery is a major factor in competitive differentiation, something that is only going to become more notable in the coming year, as omnichannel selling ramps up even further. With 19 per cent of orders for Australian merchants made by international consumers this BFCM sales season, quick and efficient delivery is a vital consideration for those retailers seeing a surge in cross-border purchasing.

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