E-Commerce Focus: Three Sectors to Monitor in 2025 and Strategies for Brands to Adapt
In the approaching year, 2025, the e-commerce sector is gearing up for an uncertain era, following a year of economic recovery in 2024. Though predictions are simply speculations, it's reasonable to consider potential challenges that 2025 may pose for global e-commerce brands and marketers.
As the head honcho of an e-commerce marketing automation platform, I've got my eye on three trends in 2025.
1. Potential Obstacles for E-commerce Businesses
In his second term, President-elect Donald Trump has expressed plans to levy tariffs on imported goods from Canada, Mexico, and China. If implemented, this could significantly impact the e-commerce sector. Economists predict that tariffs could jack up the cost of goods for consumers, triggering a chain reaction. An increase in prices could leave consumers with less disposable income, leading to a decrease in overall spending.
Larger retail giants like Amazon and Walmart, with diverse revenue streams, may better endure cost increases than smaller businesses, which may find it harder to compete and grow. If this happens, there might be more SMBs teetering on the brink and fewer new e-commerce ventures in 2025.
2. Brands Embracing Direct Marketing Channels
Over the past few years, I've noticed a growing trend: more brands are doubling down on first-party marketing channels, such as email and SMS, due to the potential returns on investment.
In the face of economic uncertainty, I expect e-commerce brands to ramp up their use of email and SMS marketing to keep costs down and profits high. The fluctuating cost of paid social and search ads can make predictable ROI challenging. If brands encounter economic hurdles, they may not be as tolerant of uncertainty as usual.
First-party channels like email and SMS enable brands to communicate directly with engaged consumers, employing historical consumer data to target relevant messages at pertinent times. This is particularly potent with automated messages, with research showing that automated emails generate 41% of all email marketing orders from just 2% of sends. Despite this, many brands are still underutilizing automation. I expect this to be a key focus for brands seeking to boost customer engagement and sales through increased use of automation in 2025.
3. AI's Impact on E-commerce
Artificial intelligence is advancing at a rapid pace, but its impact on e-commerce marketers in the coming year might primarily revolve around improving efficiency. I anticipate AI to be used mostly to streamline day-to-day tasks, such as generating email copy, subject lines, product descriptions, and visual assets.
Smaller brands with limited resources have often struggled to create high-quality visual assets for their marketing campaigns. AI has helped bridge this gap by allowing smaller brands to produce visuals for their marketing campaigns quickly, freeing up time for other business endeavors. I expect to see an increase in the production of high-quality visual assets for marketing campaigns on all platforms by smaller brands with tight budgets.
Additionally, social commerce is gradually evolving into a unified ecosystem. Companies are likely to rely on AI to help integrate social shopping platforms and streamline the process. Since the introduction of TikTok Shop, the social media platform has been exploring ways to establish itself as the go-to platform for social shopping. For instance, the company created an AI tool for brands and creators to develop targeted, relevant content more effortlessly. This AI tool is expected to drive an increase in the number of creators and content.
While this sounds promising for social commerce enthusiasts, an oversaturation of shoppable products could potentially degrade the user experience and induce consumer fatigue. This is a trend to keep an eye on in 2025.
Guiding Through 2025: Advice for Businesses
As we march towards 2025, it's clear that the e-commerce landscape is on the cusp of an unpredictable year packed with challenges and opportunities. For brands to excel in this environment, they must focus on incorporating these trends into their businesses, whether to boost efficiency or improve the customer experience.
This means prioritizing the collection of email addresses and mobile numbers for opt-in marketing channels. This can facilitate direct communication with customers, enhance the customer shopping experience, and potentially reduce reliance on more expensive paid marketing channels. Brands might also want to explore and adopt AI tools to help save time and resources, which can then be channeled into other growth areas. By delving into these tools now, businesses can assess which ones might be beneficial to support their growth in 2025.
Despite the uncertainty, one thing remains constant: adaptability and innovation will remain crucial for e-commerce businesses aiming for success in 2025.
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In the midst of potential tariffs impacting the e-commerce sector, Rytis Lauris, a key figure in e-commerce marketing automation, may need to help smaller businesses adapt and compete effectively.
With the rise of economic challenges, Rytis Lauris might advocate for e-commerce brands to heavily invest in direct marketing channels like email and SMS, maximizing their return on investment.
