Shopify recently hosted a webinar on the Future of Commerce, which shone a light into the murky future of commerce for 2022. This blog will cover our key takeaways from the webinar, to help you keep up with the constant and rapid change that 2019 and beyond has challenged ecommerce marketers with!
The future of ecommerce
The ecommerce space is going through some huge changes, which is in-turn opening up as much possibility as it is competition. Overall however, it seems that merchants are spending more but gaining less in return. It’s becoming harder to get strong return on investment, and due to changes in policies and laws such as GDPR, ad blockers and the like, paid advertising costs were up by 15% between the second and third quarter of 2021, and a report has found a 15-20% decrease in advertising reach of Instagram in Europe.
Because of this, a focus on customer loyalty is essential. As competition is increasing and advertising costs are becoming more expensive, investing in your brand to develop familiarity with consumers will increase customer lifetime value. A good, measurable way to do this is through consumer surveys. Use response data to record brand awareness, perception, purchase intent and brand recall. Go to the very core of your brand and think about why you exist, what fuels your identity, and make sure your unique differentiators and values are aligned with your customers and integrated into every customer touchpoint.
Death of third-party cookies
For the aforementioned alignment with consumer values, brands turned to third-party cookies to ensure they were reaching the correct audiences with personalised experiences.
Now, with the decline of third party cookies, brands are turning to the collection of first-party data to keep up with rising demand for personalisation from consumers. However it’s important to note that personalisation is not a magic bullet for customer engagement and long-term customer relationships.
As much as not enough personalisation is off putting, so is too much, as consumers can feel overly observed by brands. Further to this consumers are becoming more wise to the protection of their personal information and want to know how brands use their data. In fact 57% of consumers are increasingly concerned with how brands are using their personal information, so ensure that this is clear within your opt-in for first party data.
There is, however, cause for hope as 44% of consumers are OK with brands using their personal information if, and here’s the catch, they are brands that they like. This is why brands have turned to ‘community building’ to increase customer loyalty and trust. Trust is such a vital factor for gaining access to personal data, so it’s worth putting in the effort to build.
But what is a ‘community’? The key markers are:
- Shared identity
- Rituals and traditions
- A sense of responsibility to one another
By creating a community with these markers, be it on a social channel or through in-person experiences, it gives members a clear reason to keep coming back, thereby increasing customer retention whilst decreasing customer support costs.
Commercial opportunities on social platforms
We’re seeing a shift in consumer behaviour, and with these shifts comes new ways of shopping. To give you an idea, sales through social media channels are expected to triple globally by 2025.
Social media is the number one channel for discovery in Southeast Asia, with retail social commerce sales in China reaching a huge $351.6B, using networks such as WeChat (take a look at Croud’s WeChat marketing guide for more information on how your brand can build an effective WeChat strategy).
The re-emergence of livestream shopping was no doubt escalated by the pandemic, and brands that were cut off from in person shopping had to come up with alternative ways for consumers to continue this experience as closely as possible. Although currently more fragmented in Europe and the North American region, live shopping using social platforms is a great opportunity, and not one to be missed. In fact the number of live shopping apps installed by Shopify merchants grew by 61% globally in 2021. For social commerce, collaboration with influencers and creators is key for broader audience reach, and is a great way to take advantage of the trust that is already built between influencers and their audience.
Future of retail
With the world slowly beginning to open up again, demand for in-store shopping is on the rise. This means digitally native brands will be looking to move to physical spaces, leading to increased competition.
To deal with this brands must create unique experiences to stand out from competitors, whilst building brand affinity, for example turning your physical retail store into a showroom or offering workshops or charitable events to improve brand discovery and awareness.
Another way to battle competition is by embracing omnichannel commerce surfaces as the ‘new normal’, with seamless and connected digital and physical stores. Remember, 47% of consumers prefer a brand with a local presence, and omnichannel strategy can increase average order value and customer loyalty.
Brands need to make it as easy and convenient as possible for their customers to shop wherever they find themselves. And in 2022 and beyond, that means providing an omnichannel approach to shopping experiences.David Wagoner, CEO and Founder, P3 Media
Opening a physical shop is no easy task and it may not suit every brand. This is where experimental retail comes into play – try turning to pop-up formats as these may be more achievable. Pop-ins allow you to rent a space short-term, and pop-up events permit brands to interact with their audiences and build awareness through brand exposure.
However you decide to create your omnichannel experience, it’s important to track and sync product performance and information such as price and SKU counts across all your sales channels. This will benefit you, as well as your customers as it enables stock checking and restock alert sign ups, and the choice of their preferred fulfilment method.
Shipping and logistics
The sea of empty shelves in 2020 is a sight we won’t forget in a hurry – the ultimate symbol of supply and demand difficulties. Although these problems have subsided, many disruptions to supply chains have continued in other ways, and the demand for fast and cheap delivery of goods has remained high. Things aren’t looking up in terms of shipping costs and manufacturer delay, and Shopify expects to see the same delays we saw in 2021 continue into 2022.
To tackle this businesses will need to become more transparent about delivery times, especially if there are delays. Customers now have higher than ever expectations for transparency, with inaccurate delivery times jeopardising customer relationships. So much so, that 69.7% of customers state they would reconsider using a retailer if their delivery was delayed, and they were not informed about it. Make sure you share your estimated arrival times, even if it may be a longer wait than usual, and keep delivery times clear with email or SMS updates to build trust and confidence in your brand.
Transparency in sustainability
Another key point to keep in mind is being transparent with your business’ sustainability efforts. Brands are investing in sustainability initiatives such as:
- Making product packaging easily recyclable
- Manufacturing efficiencies
- Offsetting your carbon footprint
- Distancing from non-sustainable partners, and working with more credible ones
As long-term customers are holding businesses accountable to sustainability goals, it’s important to be transparent about your commitment to going green, and make it clear to customers of your environmental impact.
A big reason to consider making these changes, aside from social responsibility and helping your conscience, is that customers are 33% more likely to purchase when a brand’s sustainable initiatives are clear, not to mention that a shift towards environmentally sound supply chains will be mandatory in the coming years. Another perk of focusing on sustainability is improved loyalty not only from customers, but employees too, as 56% of employees are more likely to remain in an environmentally sound company.
Remember that transparency in all aspects of your business is key, and make sure that social and omnichannel strategies become your best friend! With these insights in mind, go forth into 2022 with confidence that you can successfully navigate the changing ecommerce landscape – and if you need any more help, get in touch, or explore our digital commerce services page for more information on our services.