What to Expect of E-Commerce in 2022
Heading into another year clouded with the effects of COVID-19, business leaders across the globe had concerns about the success of their brands and the pressures on e-commerce in general. B-to-B and B-to-C e-commerce and brick-and-mortar sellers alike have felt the impact of COVID-19 in one way or another.
We may be gearing up for another wild ride in 2022, but that doesn’t mean sellers can’t learn from past trends to better equip themselves for the challenges ahead, and the shift that will be felt in the retail industry for years to come.
Ways Sellers Pivoted Strategies in 2021
Given the increased appetite for consumers to shop online due to safety concerns and changing regulations, sellers needed to expand their digital presence quickly.
Sellers expanded to multiple marketplaces in order to raise brand visibility and capture new audiences. With dozens of marketplaces to choose, from Amazon.com to Walmart, sellers had to compare the right channels for them. As marketplaces are poised to explode in 2022, with companies like Macy’s announcing it will launch its marketplace in 2022, sellers will continually have to review which channels are the best fit to reach their target audiences and reap a profit.
A shift in digital presence meant sellers also had to pivot their marketing and advertising strategies to stand out in a crowded online space. Data shows that 80 percent of major purchases start with online research, so ensuring that a brand is visible to consumers in ads and searches during their decision-making process became more critical than ever.
How Sellers Can Survive and Thrive Next Year
For some sellers, it’s the obvious. A recent survey finds that one in four small retail businesses still don't have a website. A digital-first approach in modern day will be critical.
As the nation untangles its way out of a crippling supply chain pile-up, which is at about a two-month backlog, optimized inventory planning and execution will be critical. Sellers must continue to factor in longer lead times and top up inventory to account for shipping delays ahead of peak seasons. Companies following the traditional three-month logistics timeline, the industry standard pre-COVID, may experience more items out of stock.
We expect to see companies shift to a more proactive model and reconsider their logistics strategy, whether that be working with an innovative third-party logistics partner, leveraging direct-to-consumer fulfillment, or determining the best way to optimize last-mile logistics.
All great in theory, but sellers cannot thrive without the right capital in place, and access to that capital quickly in case of an emergency or unexpected costs. Maintaining a close relationship with a funding partner will be critical for small retailers. It's hard to top up on next season’s inventory when you still haven't been able to pay off last season’s supply. A reliable source of working capital is paramount to ensure seamless operations.
The Crystal Ball Says Diversity in Channels and Payments Will Become the Norm
As society rides out various COVID-19 waves and preferences quickly swing from wanting to stay close to home to wanting tangible experiences, a major focus will be on providing an omnichannel retail experience. Sellers should be prepared to put their best foot forward in-store, online, via mobile and social media. Social commerce in particular is on the rise as progress in analytics is able to better inform sellers on their return on investment.
Consumers will also increasingly expect to pay by means other than cash and credit or debit card. Sellers should account for strategies that allow for diversity in payment, whether that be buy now pay later (BNPL), Apple Pay, and so on.
Ricardo Pero is the CEO of SellersFunding, an all-in-one financial solution platform designed for growing e-commerce merchants.
Ricardo Pero is the CEO of SellersFunding. Ricardo has 20+ years of experience in Corporate Treasury, Wealth and Asset Management. He is and has been an investor and advisor to companies in the US and LatAm. Ricardo has taken on various director roles in leading financial institutions such as JPMorgan, Citigroup & Merrill Lynch. He has an MBA in Finance from Columbia University.