E-Commerce 2022 Trends
Top Trends To Look Out For
There is no doubt that businesses have experienced more changes and adjustments in the past two years than in the previous decade. In order to operate a successful business, you should stay up to date with the constant changes in the industry and be on the lookout for new trends that are about to emerge. One of the biggest ecommerce platforms in the world, Shopify, has compiled the top three e-commerce trends for this year based on how this will change the way we sell and shop.
1. Prioritize Customer Lifetime Value
Although brick-and-mortar stores have reopened, online sales continue to rise. However, the dwindling return on advertising expenditures, coupled with their skyrocketing costs, has rather compelled brands to prioritize customer retention and brand loyalty. Further, the already hard-fought market competition has only intensified.
According to Shopify’s senior product marketing lead, Mei Ho, “as more businesses are online, it’s harder to be found by new customers”. Moreover, new privacy laws restrict specialists’ ability to target ads, resulting in a drop in return on ad spend (drop of 15%-20% in reach on Instagram). To drive the same amount of traffic as before, some brands are even experiencing advertising costs that are five times higher than before. The solution? An effective branding strategy which has been proven to increase customer lifetime value, boost short-term conversion rates as well as attract new customers.
We can agree that most of the times, we already have a brand in mind before we decide to buy online. That can be proven through Google reports that showcase around 80% of customers doing their research before making a purchase decision. Hence the importance of building a strong brand to earn a space in customers’ minds. Thus, strong brands can generate a high organic acquisition rate, retain more customers, and even raise their prices with a high margin – making brand identity and awareness more important now than ever. Your brand must differentiate itself from the competition in terms of what it stands for, product manufacturing, and how it engages with its audience. In other words, align your brand activity (both online and offline) with your brand goals.
2. Concerns Regarding Customer Data Privacy
Trust is the true key player of the future of ecommerce. Customers are demanding personalized shopping experiences, but on the other hand, new regulations make tracking data even more difficult. Despite most companies’ reliance on first-party data to improve their audiences’ shopping experience, personalization isn’t enough to create long-lasting relationships. Therefore, by creating brand communities your company will be establishing trust, building equity, and retaining customers.
Increasingly, online users are exercising their privacy rights as governments worldwide are facilitating for them to do so. Countries such as China, Brazil, and the United States are issuing heavy fines to businesses that violate user privacy data rights. As a result, Shopify anticipates data and privacy regulation changes that will delay many online businesses’ growth plans for 2022. As an example, Apple, Brave, and Firefox have already blocked third-party cookies, while Google Chrome plans to begin blocking them in late 2023. Businesses, however, cannot rely on Google’s cookies and will need to rely on the data that customers provide directly to brands with their consent, known as “first-party data.”. In order to provide a personalized shopping experience, businesses will offer innovative tools like quizzes, custom mobile apps, and behavioral data. To do so, around 44% of businesses will be more transparent about how their customer data is used.
Despite the rise in shopping personalization, businesses are not becoming more personable, as consumers are more than three times more likely to abandon brands that “over-personalize” their experience. This is mainly from the feeling that online brands are “stalking” them. The good news is that 44% of internet users do not mind brands that align with their identity using their personal information to showcase individualized offers. Therefore, we reiterate the importance of building a strong brand in order to gain consumer trust. To accomplish this and thrive in 2022, there is no better way to do so than committing time and resources to create an online community dedicated to building a relationship with your audience, sharing brand identity, traditions, and a sense of responsibility over one another.
3. The Rise of Social Commerce
A revolutionary era has dawned in ecommerce. Shoppable advertisements and video consultations are just two types of creative ways that digital platforms are allowing businesses to engage with customers, and that is what will lead to tripled social media sales by 2025. In the aftermath of almost two years studying and working from home, people are spending more and more time scrolling their feeds (according to Shopify, social media users spend 15% of their waking hours online), resulting in a staggering increase in sales through these platforms.
Social commerce represents a great opportunity for brands to own their space on digital channels, especially as marketplaces continue to dominate commerce. In contrast, these product-focused platforms do not provide much space for brands to showcase their identities, whereas businesses can and should build brand awareness on social media platforms, resulting in higher brand equity, customer loyalty, and engagement.
Are you familiar with live shopping? Livestreaming is a dominant sales strategy in Asia, yet there is a fragmented market in North America and Europe despite the fact that it is a powerful selling tool. Many businesses who are unfamiliar with this trend find it difficult to know where to begin due to its rapid growth. As a result, many companies have teamed up with social media giants; for example, Sephora and Facebook have partnered up while Walmart will work alongside with TikTok. Nowadays, businesses need to recognize that the only way to succeed is to bring social elements of offline shopping into the digital world.
Moreover, when planning your social commerce strategy, both video and chat tools should not be overlooked. Customer service is a major influence on a shopper’s purchase decision, and the ability to communicate with service agents via the channels of their choice with ease is extremely important. To better illustrate, in the next year, 43% of consumers say they will use live chat as a tool. Meanwhile, video formats are the new way of expressing oneself on the internet and have become one of the defining features of the next generation of online shoppers. The reason for that is that many online consumers watch product videos before they decide to purchase. Because of this, conversion rates are higher, while product returns are lower.
Welcome to the future of e-commerce. We hope that with these trends and advice, you now have the right resources to thrive with your online business in 2022.