To help eCommerce brands set themselves up for success in 2022, Orla Power, Marketing Director at Luzern eCommerce, examined the past and present to provide insights into the future of online shopping.
With the new year fast approaching, many of us are taking this time to reflect on the past year and make plans for the year ahead. While these last few years have been anything but predictable, one sector that is beginning to see a bit of consistency is eCommerce. However, for online brands to remain viable this is not the time for them to rest on their laurels but rather put plans in place to stay ahead of the curve so it’s time for some 2022 predictions.
To help eCommerce brands set themselves up for success in 2022, Orla Power, our Marketing Director examined the past and present to provide insights into the future of online shopping.
1. Brands will invest in expanding sales on multiple online marketplaces
As brands look at ways to reach new audiences and increase sales, the use of online marketplaces will only increase further in 2022 and beyond and their popularity among consumers will see an uptick in 2022. Adapting to this new competitive multi-channel landscape is the most pressing challenge facing ecommerce brands. Marketplaces bring buyers, brands and third-party sellers together in one place. Getting it right requires agility, strong partnerships, and clear business goals to build the right marketplace strategy and turn opportunities into sustainable, profitable, long-term growth.
2. Amazon will continue to thrive and dominate
As the world’s largest online retailer, Amazon will remain the platform that ecommerce brands will need to be on in order to survive. Just prior to the pandemic, worldwide retail ecommerce sales stood at USD 3.35 billion. By the end of this year, projected sales are estimated to reach nearly USD 5.0 billion with Amazon remaining the most popular retail website in terms of online traffic.
We predict that the ongoing shift in buyer behaviour and subsequent move to online shopping will be the driving forces for brands to continue and even accelerate the pace of their Amazon digital transformation sales strategies, as well as use this as an opportunity to improve their digital commerce operations.
3. Social commerce – More brands will use social to test and learn
There has been increasingly higher usage of social media platforms among consumers looking to make purchases. It’s no secret that consumers trust word of mouth – such as recommendations from friends and family, above all other forms of advertising. Gen Z, in particular, are pervasive users of social media, which has positioned social commerce as a breakout trend for ecommerce in 2022. The opportunity for social media as a sales channel cannot be underestimated now should it be ignored. We predict that social commerce will be an important ‘test and learn’ selling channel for brands in 2022, however, brands must move swiftly to follow where their customers are with the right online offerings in order to catch the social wave.
4. Headless commerce will continue to gain traction
Traditional ecommerce platforms constrain brands to just the front-end design while keeping them locked into the rigid processes of monolithic solutions. Since headless commerce platforms (the back end of the platform is decoupled from the front-end) don’t control the front-end design, brands have more freedom to create the type of user experiences they desire to provide.
While not a new concept, it’s only been over the last few years that larger ecommerce ecosystems have embraced the headless model. With online shoppers having little to no tolerance for inconsistent or fragmented shopping journeys, brands will need to deliver on increasing expectations in order to remain relevant. The agility that headless commerce provides will enable brands to deliver the type of experiences online shoppers are increasingly demanding such as fast, easy, and frictionless shopping and checkout experiences – which will also help brands reduce shopping cart abandonment.
5. Technology to become even more prevalent
Artificial intelligence (AI) is already revolutionising the online shopping experience and the use of this technology will become even more ubiquitous in the coming year. Early adopters of AI have been able to create and deliver personalised online experiences by helping shoppers visualise products and how the products can meet their needs. Similarly, AI-powered chatbots are becoming increasingly sophisticated in their ability to deliver exceptional customer service.
In 2022, we can expect AI to take on a more strategic role by helping brands find new customers. This will be accomplished through algorithms that will analyse and compare shopping trends in conjunction with brand offerings, examine sales channels as they relate to shopping trends, and deliver the insights brands need to perfect their marketing, sales, and pricing strategies. We predict that brands will take this beyond dashboard analysis and partner with technology providers that can provide the capability for them to take immediate action based on data driven insights. This, however, will require automated functionality in order for brands to proactively manage sales margins, improve competitive standing, and drive online conversions – in real time.
6. Flawless fulfilment and delivery to be table stakes
As the number of online shoppers continues to rise, ‘last mile’ delivery services will equally flourish. We’re already seeing a drone and self-driving delivery vehicles becoming commonplace. However, this change will result in casualties for brands that are unprepared to make the transition.
We can expect to see brands convert to fulfilment hubs and distribution centres for ‘last mile’ delivery, providing both customers and the brand with more flexibility for deliveries, pick-ups, and returns. A clear trend is in the shift from traditional warehouse fulfilment models, as well as the re-modelling of supply chains to third-party logistics and the use of drop-shipping. By using drop-shipment, brands will simply sell the product and pass the sales order to a third-party for fulfilment and delivery – eliminating their need to manage inventory.
The online marketplace is now a shoppers' powerhouse, where consumers can purchase virtually everything they need. While the trend towards online shopping has been increasing year-over-year, the pandemic quickened the pace of adoption, changing shopping habits forever. Remaining relevant and profitable in 2022 will require brands to be increasingly agile in order to meet rising customer demands and adapt to the dynamics of the ecommerce landscape.
About Luzern
Luzern offers a managed eCommerce platform that optimizes sales, margins and inventory across channels and geographies for leading brands across the globe. We have a proven track record of dramatically growing online revenues for brands and we are trusted by household names such as Philips, Fossil, JDE coffee, Panasonic, Petsafe, HTC and Nestle.
By using our deep expertise and technology, we extend your eCommerce capabilities to attract and convert buyers, boost margins and improve customers’ experience of your brand. Our technology enables us to excel at the execution-end of eCommerce, bringing you speed and agility across channels (Amazon & other marketplaces, D2C) and geographies.
So What’s next?