The Changing World of E-Commerce and What’s in Store for 2022
We greet 2022 with hopes for a less turbulent year than the past two. With the onset of the New Year, there are several trends taking shape in the retail sector. Let’s take a look at five predictions and how they could impact the way we do business going forward.
Data and Privacy Continue to Increase in Importance
One of the most important trends we foresee is that data and privacy concerns will still be front of mind. Last year brought multiple iOS updates, and in 2022 we’ll get closer to the decline of the third-party cookie. This means it will be more difficult for brands to access the data they need to drive personalized customer experiences. Retailers will need to work more diligently to prove to their customers that there's a strong value exchange that makes it worth their while to share their data in return for better customer experiences. This will help brands retain their customers for longer and increase their lifetime value, as shoppers will want to return to engage with personalized experiences.
Online Adds Physical Stores
2022 will also bring with it an increase in online businesses establishing brick-and-mortar storefronts to gain shopper attention. We’re already seeing successful online retailers that have seen massive growth online begin their journeys into physical retail. The success of these ventures will depend on how well those retailers integrate online and offline experiences to make sure customers feel recognized and rewarded wherever they are shopping.
Where Did That Item Come From?
Another trend that will continue to gain momentum in 2022 is cross-border commerce. Increasingly, consumers are shopping from overseas retailers without even realizing it. Even though we predict that the cross-border experience will only grow, each retailer will need to do its part to make sure it succeeds. From the values they promote, to the loyalty programs they offer, stores operating cross-border will need to create brand experiences that translate into different markets successfully.
Supply Chain Woes Continue
The supply chain was a big retail story in the second half of 2021, and we see that continuing into 2022. Most consumers know there are delays and that retailers are doing their best to fulfill orders and stock shelves. One of the biggest issues for retailers in 2022 will be doing the utmost to not overpromise and underdeliver. Retailers must do their best to be sure that listed items are available and be transparent about those items difficult to stock to keep consumer confidence in check.
These stock issues may also impact the ability to deliver the typical discounts, sales and special offers that brands have relied on in the past. In 2022, brands must think of new, more experiential incentives such as providing early access to sales, or next-day delivery to attract and retain customers. Good communication will be paramount to navigating this challenge.
Back to the Drawing Board for Digital Ads
Finally for this year, we see the cost of digital advertising being on the rise yet again. Brands that are investing in the promotion of their products across channels such as Facebook, Instagram and TikTok may want to take inventory of their return on investment before increasing budgets in line with increasing costs. Brands may begin to diversify their use of these channels. Some examples include using ads to display their values or retargeting existing customers by giving them loyalty points to spend. These tactics drive retention by better communicating brand messages and building customer relationships rather than focusing purely on product-led messages to drive sales.
Charlie Casey is CEO and co-founder of LoyaltyLion, a data-driven loyalty and engagement platform that powers ecommerce growth.
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Charlie Casey is CEO and co-founder of LoyaltyLion, a data-driven loyalty and engagement platform that powers ecommerce growth. Proven to increase retention and spend, LoyaltyLion is trusted by thousands of fast-growth ecommerce merchants worldwide. Prior to founding LoyaltyLion, Charlie joined the Foreign and Commonwealth Office as an Economics Advisor before becoming a consultant at Deloitte.