In-person shopping may be back, but the ecommerce industry is showing no signs of slowing down. The global ecommerce market is still growing at a rapid pace, raking in $4.89 trillion last year, and is projected to hit $5.42 trillion in 2022.
Ecommerce in 2022 isn’t the same as it was in 2018. In a span of just a few years, there have been massive changes to online retail. Challenges in digital advertising, supply chain issues, rising transport costs, and shifting customer demands have brought a rollercoaster of changes that have made it difficult for companies to survive.
In 2022, we’ll be seeing more changes in the ecommerce space. The dominance of social media, the empowered customer, privacy-first regulations, and issues like sustainability are bringing on the rise of social commerce, immersive shopping experiences, and green commerce. Companies have to look into new ways of collecting customer data and learn how to use new technology efficiently.
These changes also affect how we measure performance. We’ll start questioning whether or not some metrics will continue to be useful to us, especially in the wake of rising ad costs.
In this article, I’ll be talking about some of the top ecommerce trends for 2022. I’ll also be sharing actionable tips on how to upgrade your strategy so you can stay ahead of the competition.
Let’s dive in now.
Top Ecommerce Trends for 2022
Here are some of the latest ecommerce trends you should know about this year:
People love social media and use it to connect with friends, share information, and keep up with the latest news and trends. It’s no surprise that 72% of Americans are active social media users. Online retailers have to reach customers where they are, so it’s only natural that selling directly on social media platforms would be the next step in ecommerce.
Social commerce combines social media and ecommerce to create an even more seamless customer experience. Shopify predicts that sales from social media platforms are set to triple around the world this year.
And it works: 50% of Instagram users say they’re interested in a brand after seeing an ad for it on Instagram, 67% of TikTok users say the platform inspired them to shop even if they weren’t planning to, and 66% of users say it helps them make a buying decision.
For online stores, it’s a good idea to start experimenting with different types of shoppable social experiences and see what resonates best with your audience. You can start by integrating shoppable content onto your social media accounts and allowing users to buy products directly on your social media account.
Another way to integrate social commerce into your strategy is to combine elements of in-person shopping and online shopping. One example is livestream shopping, another popular ecommerce trend this year. Ecommerce businesses can sell directly to customers and communicate with them in real-time through livestream videos on Instagram, Tiktok, Facebook, YouTube, and Twitch.
(Source: New York Times)
Augmented Reality (AR) and Virtual Reality (VR)
Another ecommerce trend that’s already making waves is immersive online shopping experiences using augmented reality, virtual reality, and 360-degree views. Accenture says these new technologies can help improve buyer confidence and increase sales.
Aside from creating a memorable customer experience, augmented reality and virtual reality are also looking to solve this issue of customer dissatisfaction and retail returns. Insufficient product details or photos can prevent customers from completing a purchase.
Some would still buy the product, but will return it if it doesn’t meet customer expectations of size or quality. The US National Retail Federation says that despite the boost in total retail sales in 2021, returns jumped to 16.6%, versus 10.6% in 2020.
Fortunately, AR and VR technologies are more accessible now than they were before. Apps like Obsess, ByondXR, and Subvrsive allow more businesses to offer virtual showrooms and 3D experiences to their customers. Take a look at how Ikea is using augmented reality to make sure their customers won’t have to deal with too-large furniture:
Video: Say Hej to IKEA Place
(Source: Ikea YouTube account)
Google states that 82% of consumers say sustainability is at the top of their minds in the past year. A global survey by IBM found that 70% of consumers are willing to pay a premium for brands that support recycling, practice sustainability, and/or are environmentally responsible.
Lorraine Whitmarsh, Director of the Centre for Climate Change and Social Transformations says, “During the global financial crisis of 2008, we saw that climate change concern massively dropped. What we’re seeing now is it’s really embedded.” People want to switch to a more responsible way of shopping and they believe brands should share their values when it comes to environmental impact.
Google says, “People don’t expect brands to become perfect stewards overnight, but they want to learn about what you’re doing to improve sustainability now.”
To meet consumer demand for sustainability, brands can start small. You can switch to eco-friendly packaging or decrease or eliminate the use of plastics if it’s possible. Partnering with local suppliers and producers is another idea. Or, partner with a charity that supports a cause that you can get behind.
Just make sure you avoid anything that’s fickle. Avoid practices such as “greenwashing,” that is, making your practices seem to be more green than they really are, or jumping on board with a cause just because it’s trendy. When it comes from a place of genuineness, your customers will be able to tell.
Offer More Payment Methods
Most buyers have a preferred payment method when buying online. Having a variety of payment options improves the buyer experience, reduces cart abandonment, and improves average order value.
The Buy-Now-Pay-Later (BNPL) scheme is a new ecommerce trend that saw a 215 percent increase in usage in 2021. Brandon Rembe, Chief Product Officer at Envestnet-Yodlee explains its popularity in Payments Dive, “Customers want a frictionless payment channel, while businesses want to hold on to their customer base and reduce transaction costs.”
If you only accept one or two payment types, look into expanding to other methods to attract new customers. Offer flexible installment payments with the help of apps like Paywhirl Subscription Payments, Klarna, and Afterpay.
The market share of mobile ecommerce has grown from 52.4% in 2016 to 72.9% in 2021 as more users have shifted to mobile channels for shopping. It’s critical to have an omnichannel strategy and in 2022, there’s simply no excuse for a non-mobile-friendly website.
Here are some ways to enhance your online store’s mobile shopping experience:
- Choose mobile-responsive themes and templates.
- Use pop-ups sparingly.
- Optimize your menu navigation by categories, subcategories, and highlight categories where the user is.
- Your online store is competing with other mobile phone distractions like texts, calls, and push notifications. Make sure your calls-to-action (CTA) stand out. Ensure your text is readable and the colors complement each other well.
- Simplify your checkout process. US Chamber says that brands lose 23% of customers by asking them to proceed through additional steps. A quick checkout process increases conversion rates by up to 35%. Amazon’s one-click check-out generates billions in revenue because it streamlines the payment process. Apps like Cardinity and SkipCart allow you to do the same, offering one-click payment options plus encrypted data protection for your customers.
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Personalized Customer Experiences
Ecommerce entrepreneurs have to adapt to the third-party cookieless future by working harder to get customer data. Failing to do this means it’ll be harder to create a personalized shopping experience.
So how do you collect your own data from your customers? It all starts with authentic relationships and trust. Shopify says that roughly half of consumers today are willing to share data with brands they like.
First-party data collection techniques such as email marketing, direct customer communications through SMS and chats, customer loyalty programs, and consented use of tracking pixels should be integrated into your strategy. Coupled with artificial intelligence (AI), first-party data will help you create a top-notch brand experience.
In the past year, there has been an 18% increase in ecommerce frauds and scams, affecting both online retailers and shoppers. Some of these include identity and data theft, chargeback fraud (attempting to secure a refund using the chargeback process), and account takeovers. Not protecting your site from cyberattacks could lead to significant losses. Aside from losing money, companies also lose their customers’ trust.
See also: Fraud: Awareness and Prevention for E-Commerce Stores, where you can learn more about the different types of fraud, how to spot suspicious activities right away, and steps on how to protect your online store from cyber threats.
Focus on Profitability Versus Return on Ad Spend
The last two years have been difficult for online advertisers. Apple’s app tracking permissions have severely impacted Facebook ad targeting and people choosing to opt out of tracking are getting more common. With skyrocketing ad costs, online stores have to look at new ways to measure performance and profitability.
Return on Ad Spend or ROAS is the most common KPI businesses use, but it can be unreliable when it comes to showing the entire picture. Offering coupons and flash sales can affect this metric by reflecting a high ROAS, but profitability takes a nosedive.
Maurice Rahmey of Disruptive Digital says, “If you have a 5X ROAS and a razor-thin gross profit margin, that campaign might not be a big-picture win – even though 500% feels like a big number.” ROAS should be looked into holistically and in context with profitability. Here are other key performance indicators you should focus on in 2022:
- Net Profit Margin – The percentage of sales that exceed the cost of goods (COGS) and other company expenses
- Average Order Value – The total dollar amount each customer spends per purchase
- Customer Acquisition Cost – The amount of money you spend to gain a new customer
- Customer Lifetime Value – Total worth of a customer during their entire relationship with your business
The Next Steps
The ecommerce landscape is rapidly changing. Building a strong brand image, creating authentic relationships with customers, and forming a community of loyal fans all helps businesses thrive through all these changes.
Here’s how you can do this:
Step One: Start Community Building
Appeal to your audience’s sense of community by creating traditions, running hashtag contests, offering special discounts, or insider content to give them a sense of exclusivity and feeling of being part of a group. Tie it to your business goals and measure it against relevant KPIs like Customer Lifetime Value, Net Promoter Score, and New Customer Acquisition Cost.
Here are some more ways to build stronger relationships with your customers:
- Start a loyalty and rewards program
- Use User-Generated Content (UGC) and customer testimonials in your marketing
- Create an exclusive Facebook group
Step Two: Use Live Video for Marketing and Selling
Live videos are getting more popular as buyers look for more immersive and entertaining experiences. Make it a part of your omnichannel strategy and try to be present where your audiences are. Bailey Ryan, owner of Virginia-based premium plant shop PlantHouse does “Delivery Day” live videos on IG, where she shows customers new product arrivals and shares information about them.
As she says, “It gives not only that personal shopping experience, but ‘Hey, there’s a human running the store behind the scenes, and it’s not just products getting loaded onto a website!’”
Step Three: Build a Strong Brand Identity
There’s a reason why the public relations (PR) industry continues to be relevant throughout the decades: brand perception matters. When your audience sees you as relevant and reliable, everything is easier, whether that’s collecting first-party data, gathering reviews, getting repeat orders, or acquiring referrals. You can read more about it in my article on brand identity.
Don’t have enough time on your hands? Hiring an external PR team or branding expert can help to improve your brand storytelling and image to help you capture your target audience’s interest.
Are you ready to scale your e-commerce business and stay ahead of the competition? Reach out today for your FREE 20-minute consultation call. Let’s find strategies that’ll help you grow your business.
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