ROAS worsens as consumer privacy improves | E-commerce Trends 2023 Shopify Plus Peru

The number of online stores doubled in 2021 compared to 2020. Competition was the biggest obstacle to achieving growth in 2022, according to 350 global commerce decision makers surveyed that year. More than 26 million e-commerce sites are competing for the limited time and attention of their target consumers, and more and more brands are joining the competition daily. But advertising tools like Meta and Google that brands used to rely on are becoming less reliable. ROAS (Return on Ad Spend) has continued its decline as costs per click on the largest ad platforms seem to be in a race for who charges the most.

The removal of cookies has added challenges to advertising. Apple and Mozilla have already removed cookies, and Google will do the same in 2024. When Apple began allowing its customers to opt out of data tracking in October 2021, advertisers lost 30% accuracy in targeting algorithms. overnight, costing an estimated $10 billion in ad revenue. Technology's move toward greater consumer privacy is making it harder for brands to reach their target audiences, drive traffic, and measure the effectiveness of their efforts.

Something interesting about this phenomenon is that companies are responding to what people are asking for: more privacy. Only 33% of customers believe that brands use their data responsibly, and governments are stepping up their protection of their citizens. New and updated legislation around the world, such as in California, China, Brazil, and the EU, is adding to the growing number of privacy laws coming into force. Latin America and especially Peru is no exception.

There's no denying that privacy regulations are strangling marketers' ability to target potential customers. Boston Consulting Group found that 95% of marketers have already experienced the downside of these data privacy trends or expect to before the end of the year

For brands that rely on third-party data in their marketing, personalization at scale is one of many drawbacks. But 71% of consumers still expect a personal touch, and 81% of brands agree that unique and personalized experiences play an important role in future commerce growth. So the challenge is finding new ways to replace the role of third-party data in marketing.

The Shopify Plus team provided us with one of the most comprehensive studies we have ever read, where the most relevant global trends in e-commerce for this 2023 are analyzed. The Cluster team prepared a summary of each of the trends and challenges that all Ecommerce Manager in Peru and Latam need.

Download the full report here