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Popping champagne on New Year's Eve will feel different than it has for the past years. 2023 starts in an inflationary recession with an ongoing war in Europe and increased geopolitical tensions worldwide. Managing in a downturn is no easy task, and it's essential for decision-makers to keep their eye on the ball and to try to anticipate economic developments.
To help you start the new year with a clear vision, we've gathered five trends in digital commerce worth keeping your eye on.
1. Streamline processes to operate efficiently
Focusing on incremental improvements in the core business is relevant as ever in 2023. It's time to take a breather, evaluate the digital investments of the past years, and try to reap benefits from them.
It's also time to remap customer journeys and figure out what you've learned since the last time. Having recognised laborious parts in the customer journeys, you should start automating and streamlining them for when the demand spikes up again. You might constantly be doing these things already, but the turn of a year is a great chance to ensure your core business model is future-proofed for the rest of the 2020s.
2. Make use of your data
Data is on everyone's lips these days. Companies have tried to organise their data to provide them with a commercial advantage. By now, many have started to refigure their IT architectures to not only have a single source of truth for the data but also to enable the right information to flow to the right medium with ease. Harnessing the data, making sense of it, and finally actually being able to make smart decisions with it is accelerating in 2023. Companies who have been executing their data strategies should conduct an honest introspection: have our investments in data paid off yet? If not, are we on the right track? If you've invested five years into the project, and no significant returns are in sight, it's time to refigure things.
Data should seamlessly flow from backend systems to the customer layer and back. It should help the growth teams act faster, while analysts can make better decisions, and managers have a clear outlook of the future. Acting on data should help you make more revenue and be more profitable.
3. Balance between ecosystems vs. many SaaS tools
From ecosystems to point solutions and back, the IT industry is always following some high-level dogmas that come in cycles. In one decade, it's recommended to have a tool for every need, while in the next, big platforms come with promises of disrupting the market and making everyone's lives easier. In reality, it's not that simple.
The B2B SaaS landscape has grown exponentially in the past years. Companies are increasingly aware of the hardship that a scattered IT landscape brings. Many are looking to consolidate their IT infrastructure to have fewer applications that teams use. This can bring the total cost of ownership down while reducing the headache of dealing with a network of systems. Companies like Rippling and Gusto are taking the compound product route by solving multiple customer problems under one hood in a closed system. Done right, having one large system to handle the majority of the use cases can be a lifesaver, saving both time and money. In commerce, it's the debate between monolithic platforms and modular systems.
Consolidating is no silver bullet for everyone. By taking a "less is more" approach, e.g. by committing to one platform to handle it all, IT decision-makers are accepting a trade-off and a risk of a vendor lock. To tackle this, there has been a surge in composable commerce platforms promising flexibility with ease of use. Platforms such as Spryker and Commercetools are built on MACH principles (microservices, API-first, cloud-based, headless) helping companies adopt the platforms incrementally or only use the microservices that are missing from their current stack. In an existing IT infrastructure, this lowers the risks of replatforming by a significant amount. For companies with complex business models or companies who want to leverage their existing system landscape, building a modular architecture might be the way to go.
4. Focus on sustainability in digital
Sustainability plays a crucial role in digital investments, especially now as we're fighting climate change in the long term and managing the uncertain energy markets in the short term. The terms green cloud and digital sustainability have gained popularity as companies have started to look for ways to make cloud computing more environmentally friendly. On top of corporations, consumers have started monitoring their own energy consumption, so any applications that help save energy in our daily lives will continue to see a rise in demand.
As humanity is trying to battle our chronic overconsumption, helping consumers make better choices is ever important. Not forgetting the tough macroeconomic climate, the circular economy market will continue to grow. For example, a Finnish-based startup Rentle.io, a platform for renting anything, just raised 3.8M€ in a seed round from one of Finland's most well-known investors. In another example, brands like Singular Society try to produce just the right amount of garments for their customers with materials sourced from responsible manufacturers trying to swim upstream against the fast fashion trend. We haven't seen it all in this space just yet.
There's more to sustainability under the hood, and I'm sure the topic will be under big scrutiny over the next few years. The Upright Project has categorised companies' net impact based on their impact on society, knowledge, health, and the environment, challenging the traditional ESG formula. Perhaps it's time to start thinking about digital investments with a holistic lens, too?
5. Don't forget to innovate
Ambidextrous companies, the ones who can focus on innovation while running the core business, will be the winners of tomorrow. When the economy cools down, those with enough spare budgets should allocate a part of them to innovation. Finally, some big developments are happening on the AI front, and applications for metaverse and Web3 are looming in the future.
Artificial intelligence was a big topic ten years ago, but then the hype ended. The industry needed more time to mature. Today, copy.ai has helped thousands of people be more efficient copywriters. DALL-E has shocked people with its capability to produce realistic images and art from text descriptions, while adcreative.ai makes it faster to create digital marketing campaigns. While there's still work to do with automation, AI point solutions can be a big productivity boost for knowledge workers in 2023.
There are also longer-term trends in the market that companies should pay close attention to. Metaverse might be happening at some point. However, the massive investments into making it a reality aren't paying off just yet. The Metaverse is still too early for the vast majority of companies. For most, it's recommended to steer clear from spending excessive amounts of time and money on strategising over it, but rather talking to your customers: are they there, or are they planning to be there?
Web3 is also happening, but as noticed recently with the collapse of FTX, one of the largest cryptocurrency exchanges, the industry is still lacking structure, making it a risky area to make big investments even with proper risk management practices. As it always is with emerging technologies, companies should approach them like they approach investments – don't bet more than you're willing to lose. The upside potential is huge, but the probability of making the right call is low. Again, it's recommended to try to solve a real use case for your customers instead of tinkering with frivolous experiments just for the sake of trying something new.
Heading into 2023
Yogi Berra once said that it's tough to make predictions, especially about the future. Heading to 2023 feels like driving on a highway and entering a tunnel in broad daylight. Your eyesight hasn't yet adjusted to the dark, but every second brings more clarity.
Therefore, it's good to be aware of trends and what's happening around you, but of utmost importance is to focus on your own turf and to equip your team to face the uncertain future with confidence. After all, business is nothing more than constantly talking to your customers and making sure you're delivering them value. Every year, time and time again.