For the past 2 years, we’ve seen a tremendous spike in online activity. As we move into 2022, we expect these e-commerce trends to continue despite the constantly changing state of societal restrictions due to the pandemic.
In 2019, the market share of e-commerce sales as a component of total retail was at 13.8%. The figure is expected to increase to around 21% by 2022, and eventually 24.5% by the year 2025. If we go by the tally of e-commerce sales by 2022, the projected growth of 52% will occur in just 3 years.
The significant change in customer behavior has challenged retailers to think on their feet, but the shift is not one-sided in favor of purely online shopping. With a lot of individuals craving for live interaction, physical retail is still expected to be responsible for 72% of total retail shares in the U.S.. Amazon, for example, has begun investing in a number of physical stores operating under different banners despite the online-driven trends..
One thing, however, is becoming increasingly clear: retailers have to pay attention to a number of fast-growing technologies and trends in order to keep up with their competition. For many, 2022 is a pivotal year – a year of optimistic growth and expansion, but it isn’t as easy as taking the stores online.
So what does it take for an online business to thrive in 2022? Let’s dive into some of the key trends:
1. Social Commerce
With an expected 97% of Gen Z users using social media as their primary shopping channel by 2025, Social Commerce is a rising force in online retail.
Users have relied on social media platforms to research brands before deciding on any purchases. In a survey conducted by the Influencer Marketing Factory, 57% of respondents purchased a product during a livestream, with 39% of them preferring to discover products during livestreams. Furthermore, 42% of online shoppers are very likely to check out using a social media app as opposed to a dot com website or online marketplace.
As of 2021, there are over a billion users on Facebook Marketplace, and over 250 million users on Facebook Shops. This allows small businesses to access and tap a wide customer base despite being only on one platform. Since the number of channels a retailer can sell on is increasing, the notion that setting up a business is expensive is being challenged.
2. Mobile Commerce
In heavy relation to social commerce, users that discover or search for products online often use their mobile phones. Not only are customers using their phones to discover products, but most purchases are happening on mobile.
At present, over 70% of online customers are expected to prefer purchasing products on mobile phones as opposed to other mediums, indicating how important the connection between social media and mobile shopping is. Since a good portion of shoppers use social media for a variety of reasons, the convenience of being able to make purchases alongside personal activities within social media has influenced them to consolidate both social interaction and online shopping into one hybrid activity.
Another feature of mobile commerce is its convenience. Since mobile brands have been diversifying and creating more affordable units, more and more individuals have been able to acquire and utilize smartphones as part of their daily life.
In combination with the rise of social commerce, retailers can manage their stores on the go, while customers can shop in transit. What started as an increased societal access to mobile usage & social media interest has now branched out into a full-blown mobile shopping ecosystem that happens completely inside social media marketplaces.
3. Hybrid Setup
Physical retail seemed poised to make a comeback late in 2021, with foot traffic slowly returning to normal. Individuals were experiencing burnouts from staying at home due to the lockdowns, and they were looking to get a change of environment after noticing the pandemic slow down. However, the Omicron variant arrived rapidly, and physical stores were forced to shut down once again.
Uncertain now whether brick and mortar store operations can sustain some level of consistency, retailers are back to prioritizing e-commerce channels. This doesn’t mean, however, that physical retail is going away – far from it.
For example, Toys ‘R” Us is partnering with Macys to open around 400 outlets in Macy stores, while Dollar General will be opening close to a thousand stores by 2025. This speaks about the trust and investment that brands are committing to the idea that physical retail is an integral part of the whole retail ecosystem, and that customers will never completely give up the in-store experience.
4. Personalized Experience
The shopping experience of a customer matters just as much as the products and services themselves. Customers aren’t just looking for more avenues to make purchases, they’re also becoming more specific and demanding about the purchasing journey. They’re looking for accessible, easy, and consistent experiences.
Brands are catching on to the changing preferences of customers, and are tailor-making their services to include targeted marketing campaigns. There’s also an increased emphasis on creating individualistic experiences, designed to pamper customers by utilizing data regarding their purchase preferences and tastes.
To achieve this, brands are looking at omnichannel strategies in order to connect in-store shopping experiences with their online counterparts. Since customers demand the same experience no matter which platform of a brand they’re making purchases on, omnichannels have paved the way for retailers to achieve a consistency of voice, tone, and service in order to match the needs of their customers.
The bare minimum for a retailer to grow their business in 2022 is their ability to see trends from miles away, and to adapt to them. Resistance to change has cost many businesses their opportunity to expand, especially with the advent of the pandemic. Brands that open up themselves to the possibilities – to accommodate both physical retail & online retail, both mobile & desktop, both social media & third party websites – they’ve given themselves a head start in the retail relay race.
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