2023 was a challenging year for ecommerce. If you work in the industry, now doubt you experienced your fair share of price increases and market fluctuations. Perhaps customers have been spending less or you've found it harder to make your ads convert.
Don’t worry, you’re not the only one. We spoke with 9 ecommerce experts about the challenges they faced last year and their recommendations for overcoming them. By the end of this article, you should have some tips for increasing revenue in 2024. 🤑
9 experts and their predictions for ecommerce in 2024
Ready to take on the year ahead? Here’s what 9 ecommerce experts recommend focusing on in 2024.
Nathan Lomax on clear value propositions
Nathan Lomax is the co-founder of Quickfire Digital, a Shopify agency which builds money-making websites for DTC brands. They work with world-class ecommerce brands like FILA, Juicy Couture, Magnum Boots and Forthglade (one of Dash’s customers).
“Undeniably, the cost of living crisis has had an impact on the ecommerce industry. Supply chain challenges, coupled with crises around the world, have led to some frustration.
While brands can’t tackle the cost of living itself, the challenge lies in ensuring consumers spend with you. That’s why it’s important you have a clear value proposition. It is essential to identify what you’re doing (or not doing) to bring customers back. Here are some things I recommend for 2024:
Improve website and conversion rates: Away from the bigger strategy piece, refocus on website improvements to increase conversion rate and average order value (AOV).
Push your subscriptions: Subscriptions were hugely popular in 2023, and I can see that continuing this year. I'm seeing more and more product pages which make it incredibly simple for customers to sign up to a subscription of a product. It's a great way to push up the average spend of customers.
Know your value: Ecommerce will continue to grow—that's a given. But it means the competition gets stronger every year. Brands have got to be super clear on their value to customers and give them reasons to keep coming back. There are a number of ways to do this. I believe it's so important to get this fundamental area nailed!”
Rebecca Polding on bulk purchasing and subscriptions
Rebecca Polding is the Senior Digital Trading Manager at Forthglade, an award-winning pet food brand. Forthglade has been selling natural pet food for dogs since 1971 and has become a well-known brand in grocery, retail and independent shop categories.
“Throughout 2023 the market has struggled with performance, with revenue contribution down by -2.1% on average (according to research gathered by our customer research agency, The Tapestry Agency). This has made the market more competitive and forced retailers to look for new ways to capture the attention of their audience. Combined with the on-going media narrative around the cost of living, it’s unlikely this trend is going to U-turn in the near future.
As a result of this uncertainty, we’ve pulled back on brand awareness campaigns (something we’ve seen our competitors do, too). This isn’t ideal—we’d rather be doubling down on this to continue improving our brand recognition.
In the meantime, here are some things we’ll be working on in 2024:
Bulk purchasing and subscriptions: We’ve been working hard to identify opportunities where we can offer better value for money around bulk purchasing. We’re also bolstering our subscription offering. Our subscription, for example, comes with an on-going discount for our regular repeat purchasers.
Identifying micro-trends to protect repeat purchasers: In terms of 2024 opportunities, staying close to the data is going to be key. We’ve started by breaking out our customer cohorts to establish any micro trends so we can react to them and protect our repeat purchase rate as much as possible.
Partnerships vs paid media channels: We’re also focused on acquiring new customers through softer entry-level products like our natural treat, dental and salmon oil ranges. And rather than throwing too much money at paid media channels, we’re looking at partnerships with like-minded brands and affiliates.
Understanding GA4: Google Analytics 4 (GA4) has been a big shift for us. Google is still making significant changes to the platform which is taking a lot of getting used to. So we’ve been working with a third party agency, Liberandum, to support us through the transition.
This has been invaluable. The shift in attribution through GA4 has meant we’ve reviewed all of our channel strategy for 2024 and we’re continuing to monitor this closely and prepared to make changes if needed.
TikTok Shop: In terms of upcoming trends, we’re currently investigating TikTok Shop to see how it might apply to Forthglade’s brand. It’s a total unknown for us and, traditionally, we've struggled to be on the front foot of trends so it’s exciting that we’re looking at something so new.
Pushing organic social: We’re also working closely with our internal communications team on the contribution of our organic social channels. We’d love to go viral one day (for the right reasons…), but in the meantime, our team is making amazing content to support our brand awareness.”
🤓By the way, Forthglade use Dash to store and manage all their visual content. Take a read of their customer story to learn how they’ve improved their design workflows.
Ankur Goyal on data and automation
Ankur Goyal is the VP of Growth at baby care brand, Coterie. The brand has shaken up the industry by focusing on the quality of their products, working with brand advocates like supermodel Karlie Kloss, and using data to test messaging and ad creative.
“I think most 2023 pressures stemmed from returning to ’normal’ after the pandemic. Many DTC brands thought pandemic peaks were the new normal so they massively overstaffed or increased their fixed cost base in 2020 and 2021.
I also think there is a subset of brands that got caught up in the crutch of cheap money and pandemic-fuelled demand. They never engaged in the hard work of ensuring their business model was financially sustainable or their product was differentiated enough. I believe the DTC brands that avoided this trap are, generally, doing well. They didn't need to do layoffs or restructuring.
Moving forward, here are two things ecommerce brands should focus on in 2024:
Build solid feedback loops: You need to articulate your competitive advantage in a few words that consumers understand. Take advantage of real time feedback tools to identify and scale it. Post purchase surveys and reviews can be a great way to hone in on your product’s advantage. Once you have a good grasp of what that is, use that same social proof in your advertising to create a virtuous feedback loop.
(💡Learn how Ankur uses reviews and data to test messaging in Coterie’s growth strategies.)
More data visibility and automation: I'm excited for the increased data visibility on Performance Max, which should allow marketers to harness the platform better. I also think the macro trend of increased media buying automation will continue, which will continue to drive the importance of differentiated and targeted creative.”
🎧We interviewed Ankur as part of our podcast series: Ecommerce Marketing 101. We talked about how you can use data to inform messaging, test creative and grow your brand. Listen on:
Ashley Wright on 2024 TikTok trends
“Over the past year, I’ve seen DTC brands struggle with scaling. Customer acquisition has become increasingly challenging due to the heightened competition in the ecommerce market. This has led to rising costs in attracting and converting new customers. It's become so hard to stand out in the crowded market. That’s why it's important you have innovative strategies to differentiate from your competitors.
Here are two ways TikTok can help you scale in 2024:
TikTok Shop: I may be biassed but I think there is a huge opportunity with TikTok. This platform is just getting warmed up. And, whilst organic TikTok is still powerful, I think the biggest trend in 2024 is TikTok Shop. It supports the attribution issue that many brands struggle to understand when it comes to TikTok. The brands not figuring this out will fall behind.
Community-building: Aside from this, I feel that more and more brands are going to be focusing on the community building aspect a lot more. They’ll need to make sure they can go above and beyond for their customers.”
Angus Goldsmith on AI-generated product images
Angus Goldsmith is the Head of Dash (that’s us)! Dash is a digital asset management tool that lets you manage and share your visual content. Dash lets you find creative files using keywords, create portals to share with your partners and integrate with ecommerce tools like Shopify.
“Firstly, it’s hard to talk about visual content without mentioning the impact of AI-generated images.
For ecommerce brands, generating AI images from scratch isn’t necessarily useful. That’s because even the best AI can’t create an accurate representation of your product. Plus, the rise in AI means images can be created faster than ever before. This is great but you still have to manage the sheer volume of content being created. And you have to ensure it’s successfully deployed and shared with relevant partners.
Instead, here are some other ways you can use AI and software tools to solve your visual content workflows:
Creating images for multiple channels: You could take an original photo of your product and use AI to create a background. Or use AI to adjust your image to fit different aspect ratios, whilst maintaining your product perfectly positioned in the frame. This is especially important for brands who are marketing themselves across multiple online channels. (And, it’s a feature our ecommerce brands use a lot over on Dash.)
Build solid content workflows: Rather than have a disorganised mess on your designer’s hard drive and distributors constantly requesting content from you—use a DAM tool. Dash, for example, lets you set up self-service portals where partners can easily find the collateral that is relevant to them. Ultimately, it helps them sell more products.
You can also create an approval workflow to help keep track of feedback and requested changes to content (AI enhanced or otherwise!). This ensures that only the finished output is available for use which avoids any embarrassing and potentially costly mistakes.
Track the success of your content: Aside from advancements in AI, another trend we’re seeing is more people wanting to track the performance of all their content.
It’s easier than ever to create multiple versions of your creative assets. So, it makes sense to test which style works best with your audience. If you’ve got good workflows in place, it’ll make testing much easier to handle.
To get the most value out of these experiments, organise all these different versions and their performance info in one central place. This makes it easy for photographers, designers and marketers to find and use images that did well in the past.
If only there were some kind of well-designed system that already existed to help you do just that…🤔”
Discover how you can use Dash to organise your best-performing assets.
Toby Hart on social-first video content
Toby Hart is the co-founder of Nusa Films, an agency that specialises in creating thumb-stopping videos for social media. They use the concept of ‘social-first’ in every piece of content they create and their growing portfolio of brands include TASTER, Vivobareet, Fussy and MOJU Drinks.
“Trends will change depending on the most popular platforms: Trends come and go, including things like user-generated content (UGC). There's been a significant shift towards authenticity with platforms like TikTok. It's quite different from 10 to 20 years ago when it was all about high-production-value TV content. I'm sure it will swing back the other way at some point. I'd say it often depends on the medium and what's the most popular at that time. Nowadays, with so many different platforms, who would have thought that podcasts would become a thing?
More demand in authentic content: The explosion of the creator economy is fascinating. It’s disrupting the traditional model of production companies and agencies. The rise of influencers, now more broadly termed ‘creators’, has led to a demand for authentic content.
Professional video is becoming more accessible: Content creation has become more creative, with various production styles seen on platforms like TikTok. And, professional-grade camera equipment has become more accessible which has levelled the playing field. People now have access to cool tools and techniques, making it easy to create interesting content. Ultimately, it's about storytelling and how we use tools like AI, new camera rigs, drones, and more to create impactful content.”
You can learn how to create thumb-stopping video ads like Toby and his team over on our podcast:
Harry Willis on repeat-revenue automation
Harry Willis is the Director of Partnerships and Business at Relo. This is a repeat-revenue platform that helps DTC brands tackle reorder rates, subscription numbers and subscription churn. Relo can analyse your customers’ Shopify order history and create personalised emails and SMS campaigns that encourage people to buy again.
“We interviewed 50 of the leading DTC brands in the US/EMEA markets, focusing specifically on those who sell consumable products. That includes supplements, pet food, skincare, food and beverages.
We noticed 3 core challenges they face when it comes to customer retention:
- Getting customers to replenish
- Getting customers to cross sell
- Converting those repeat customers effectively onto paid subscriptions (on platforms like Recharge and Skio)
For most brands, the key to solving these issues is hidden in your Shopify order history. But it’s hard to break it down into anything actionable—and that’s before working out how to splice that into Klaviyo flows.
Here are some ways you can overcome these issues for your brand:
Using data to predict customer behaviour and needs: With Relo, we use data science to determine when each of your customers are likely to do one of the things I just mentioned. We can see when someone might need to replenish some stock; when they might be open to cross selling, or ready to convert onto a paid subscription.
Create personalised email and SMS flows: We can then sync these predictions into your brand's Klaviyo flows. We’re able to target each customer with the right message on the exact day they’re most likely to convert. We’ve seen this increase repeat-purchase rate and subscription growth by 20-40% for DTC consumables leaders like Absolute Collagen, Soylent and Hairstory.
With the cost of acquiring customers at an all time high, these results can have a huge impact on a brand’s CAC/LTV ratio—a key indicator of financial health and competitive advantage.
Prioritise profitability: 2023 has seen a shift in focus from top-line revenue to profitability and we expect that to continue into 2024. Subscription brands are consolidating their tech stacks and making sure their core platforms are integrated optimally. For subscription brands, this typically means investing in integrations which amplify results across their Ecommerce (Shopify), CRM (Klaviyo), and their subscription platform (Recharge, Skio, Loop etc.).
In terms of new trends, I expect 2024 will be the year EMEA catches up with the US in terms of SMS adoption. It’s a promising new channel for many consumables brands which few are currently using to its full potential.”
Ryan Pinkman on more efficient marketing spend
Ryan Pinkman is the CEO of Privy, an ecommerce platform that helps you grow your email and SMS lists so you sell more products. It connects with your Shopify store so you can personalise your messages and increase conversions.
“2023 was the year DTC brands really started to take control of their marketing spend. It felt like a breaking point for ecommerce businesses fed up with unrealistic pricing models from vendors. To continue this trend into 2024, here are some of my recommendations:
Use vendors that help you consolidate: The biggest thing we've seen DTC brands do to get control of their spend is to use vendors that help them consolidate. Rather than spreading budgets across multiple single-solution suppliers, brands have been seeking out those that help them do more in one platform.
Double-down on channels that deliver: I think it's really important that brands take a serious look at what channels are actually working for them and double down. You don’t always need to chase the new shiny thing. Sure, you can test your way into new channels, but the bulk of your investment should be in channels that are proven to deliver.
Create better marketing experiences: I think we're hitting a breaking point for buyers when it comes to how brands communicate with them online. 2023 was a huge year for SMS marketing. This is awesome for brands but, for consumers, it feels like you’re managing multiple inboxes. If you combine that with the higher percentage of ads and sponsored content in social feeds, then you can expect consumers to become fatigued. So I think the brands that are able to offer real value and a great experience via their marketing channels will really stand out.”
Simon Freeman on ecommerce advertising
Simon Freeman is a freelance PPC expert and founder of Welcome to Digital. He has over 15 years of experience helping brands scale sustainably through campaigns that have an impact and deliver results.
“In 2023, I noticed three key challenges brands faced in the ecommerce space.
- Figuring out what ads convert: This year there has been a lot of talk about what type of ads convert best—especially as ‘traditional’ media buying is becoming less of an art. Brands are wondering whether to focus on video or images. And they’re weighing up whether to use user-generated content (UGC), influencers, highly produced ads—the list goes on.
- Lower barrier to entry means more competition: The barrier to entry to set-up an ecommerce store is the lowest it has ever been. Platforms like Shopify and all the amazing apps that go with it means that competition is increasing all the time. And some niches are feeling this more than others.
Combine this with ad platforms using AI and machine learning, it creates more ecommerce competition and higher competition for ad space.
- Shoppers are becoming conditioned to look for discounts: Some brands love sales offers; others avoid them. But due to the frequency and volume of online sales and discounts, shoppers are becoming more likely to convert when there’s a discount. We see it all the time in the google ads reports: Search terms like ‘brand name - discount code’ are incredibly high.
With these three challenges in mind, here are my recommendations for tacking them in 2024:
Test your ads and iterate: Don’t spend lots of money on ad creative until you know what’s going to work for your brand. Some of the best performing ads in my ad accounts are product shots taken on my phone. If you follow Barry Hott on LinkedIn then you’ll know the term ‘ugly ads’. The premise here is to not let the complexities of creative ad production hold you back. Get snapping with your phone, get the ad running, and then iterate based on the data.
Tell a good story: While the barrier to entry is low, the path to success is complex and full of hurdles. The biggest opportunities brands have in 2024 is to tell amazing stories. Algorithms favour content that is engaging for their audience. To keep your engagement at its peak, your storytelling needs to be relevant, entertaining and educational.
I see it all the time in ad platform data. For example, there might be an ad taking up a significant amount of impressions, but has a lower conversion rate. Why? Shouldn’t the ad platform favour the ad that is giving you the best cost per action (CPA)?
Remember: these are social platforms. When you have an ad that is driving social engagement, the ad platform will favour content with the best social engagement.
So create a good story and build a brand that people will advocate for, and you’ll be well ahead of the majority of ecommerce stores out there.
Prioritise repeat-shoppers: To decide if discounts are right for your brand you need to look at your financial data. Discounts might bring in revenue more easily, but what do your margins look like if you give 20% off? And, more importantly—but often not measured—do discount shoppers return? What’s your lifetime value (LTV) calculation on regular vs discount shoppers? And does a lower CPA on discount shoppers actually make sense in the long run?
A lot of the time brands are better off with a higher CPA for non-discount shoppers who are more likely to repeat purchase in the future.”
🤓 You can read more of Simon’s insight in his article: How to create ecommerce ads that convert.
10 expert recommendations for DTC brands in 2024
Our experts have loads to say! 🙌 Here’s a round-up of their recommendations and some top tips you can take with you into your business.
Focus on your repeat-revenue channels
Last year, revenue contribution was down by -2.1% on average. Combine that with the increasing cost of customer acquisition and it means brands need to find new ways to ensure steady cash flow.
Our experts say you should focus on your repeat-revenue channels to boost average customer spending in 2024. That includes looking at your subscription offering and learning more about your repeat customers.
1. Use data to predict when customers are ready to subscribe
If you have customers that regularly purchase products using one-time payments, you can use data to help push them towards a subscription. Use a tool like Relo to predict when someone is ready to subscribe. And set up automated emails to encourage people over the line.
For subscribers, you could take Rebecca’s tips and use data to break your consumers up into smaller cohorts. This way you can monitor any slight shifts in their buying patterns and tweak your product messaging and offerings as necessary.
2. Automate your email and SMS campaigns
Once you’ve identified the customers that are ready to convert, you can send them personalised email and SMS flows. This means you’re targeting them at the time they’re most likely to convert.
3. Set up on-going discounts for repeat purchasers
Incentivise your customers to sign up to your subscription offering by offering an on-going discount. At Forthglade, for instance, you get 10% off every order when you subscribe.
4. Add subscription CTAs on your product pages
Make it really easy for customers to take out a subscription by adding CTAs to your product pages. Snack brand, Moku, not only encourages subscriptions on their product pages, but they show you how much you’ll save if you sign up.
5. Invest in your CRM system
To look after your repeat customers—and to encourage them to spend more— it’s worth investing in your customer relationship management (CRM) systems. This will help you to manage customer interactions, predict behaviours, and enhance overall customer experiences.
Double down on your creative ad strategy
Media buying - or programmatic marketing - is becoming more and more common. Whilst it saves time for marketers, it means the competition is higher and the ad landscape is becoming increasingly diluted.
That’s why brands need to be extra creative in their marketing if they want to be heard about the noise. Here are some tips to consider:
6. Create social-first video ads
There’s no getting away from social media. Brands are relying on platforms like TikTok, Instagram, Pinterest and Facebook to acquire and convert new customers. So it’s important that your video is being created for social media. Luckily, there’s lots of fun and creative ways you can produce ad content. Read Toby Hart’s tips on creating social-first video ads for your brand.
7. Gather audience insight to inform messaging
To capture your audience’s attention, your messaging needs to be clear, concise and explain what your product does in a very short amount of time. To find effective messaging, use feedback tools like post-purchase surveys and reviews, to refine and understand your unique selling proposition. Incorporate this social proof into your ecommerce advertising strategy for a positive feedback loop that reinforces your brand's strengths.
8. Monitor and iterate on your ad creative
By closely monitoring the performance of your ad creative, you can continuously improve them to ensure you’re getting the most out of your ad spend. This is something that baby care brand, Coterie, does regularly.
They split their creative projects up into bi-weekly sprints. This way, they can closely monitor how well it's performing and make adjustments quickly.
You can learn how Coterie does this by checking out our interview with the brand’s VP of Growth, Ankur Goyal.
Do more with your social channels
Finally, a common theme we’ve spotted amongst our experts is the importance of social media. Whether it’s building a community on TikTok, or investing more into your video content—there are loads of ways you can use social media to your advantage.
9. Build a community on social media
Whilst community building is a great way to build trust with potential buyers; it also reinforces brand loyalty with people already spending money with you. Use platforms like TikTok and Instagram to create educational, engaging and entertaining content for your loyal customers.
10. Experiment with TikTok Shops
TikTok is incredibly influential for helping people make purchase decisions. So, it makes sense that our experts are looking to TikTok Shops for a new revenue channel this year.
You can set up a TikTok Shop by linking it up with your TikTok Business account. From here, you can start uploading products which are available in the ‘Shop’ section of your account page. Check out Cult Beauty’s TikTok shop as an example (note: you can only view their shop on mobile).
💡 If you’re not sure where to start with TikTok, check out Barney’s post that walks you through the steps on setting up an account, as well as tips for creating a TikTok ecommerce strategy.
Invest in your tech stack
Tech stacks are really important. (Just look at the same prediction in our 2023 ecommerce trends article). Whether you pick a handful of useful tools, or consolidate everything into one system, they’ll be super useful in staying on top of your sales and marketing goals. Here are some of the tools mentioned in this article:
- Dash for digital asset management: Your creative assets are going to be hugely important if you want to capture your audience’s attention and encourage more product purchases. Use a tool like Dash to help you keep track of that visual content. You can monitor how well your content is performing, deploy visuals to your social channels and share them with your retail partners.
- Relo for repeat-revenue: This year you’ll want to keep your eye on repeat customers. Use a repeat-revenue platform like Relo to help you out. You can monitor reorder rates, subscription numbers and subscription churn. Relo can also analyse your customers’ Shopify order history and create personalised emails and SMS campaigns that encourage people to buy again.
- Klaviyo for email marketing: One of the most popular DTC marketing tools out there, Klaviyo is an email marketing platform that easily syncs up with Shopify. It specialises in automation and lets brands create automated abandoned cart email workflows. You can also drop visuals from Dash into Klaviyo to help spruce up your campaigns.
- Privy for growing your email and SMS lists: Privy is an ecommerce platform that helps you grow your email and SMS lists so you sell more products. It connects with your Shopify store so you can personalise your messages and increase conversions.
- GA4 for in-depth website analytics: Google Analytics 4 (previous Google Analytics) is a free analytics tool that’ll help you better understand your website visitors. You can track the journey of your visitors and see what’s making them convert.
For more tools to help you grow your ecommerce brands, check out Barney’s post that covers 11 tried-and-tested marketing apps for your small biz.
Get your brand ready for 2024
Ready to take on 2024? We hope so! 💪
As our experts mentioned, consider focusing on your current customers and increasing their lifetime value. To attract new customers, make sure you’re honing in on what makes your brand valuable. For brand and community building, make sure your creative assets are educational, inspiring and irresistible to your followers.
And if you need a place to store and manage all your creative assets? Pick Dash! 😇 This is a tool that lets you store, organise and share your visual content with agencies, resellers and marketplaces. No more trawling through shared drives or losing important brand docs - instead, quickly search and find your content in Dash.
Grab yourself a 14-day free trial, no strings attached. 👇