The rapid acceleration of digitalization that was brought on by global lockdowns is continuing apace. According to Statista, online sales as a percentage of all sales peaked at 22% in the US and over 31% in the UK during the height of the pandemic, and this growth will stay.
Tech advancements and ecommerce innovation – particularly in the social commerce space – are being announced almost every day. It’s enough to make your head spin, never mind thinking about what to prepare for in 2022. So what are the commerce trends we should look out for in the next twelve months?
Trend 1: The dawn of the Metaverse and the rise of NFTs
Facebook announced the launch of its metaverse project in 2021, and it’s going to be big, maybe even bigger, than (our) world! It's not just a virtual reality playspace; the metaverse will blend augmented reality into the experience. Augmented reality will be accessible through special glasses the Metaversian can wear whenever they want. But how are they going to monetize this?
If you haven’t heard of NFTs before, you’ll know all about them by the end of 2022. Once something of a joke - digital authenticity used to be an oxymoron – non-fungible tokens offer infinite possibilities for online or offline transactions or in metaverse environments. Opensea, the largest NFT trading marketplace, experienced a 12,000% rise in trading in August 2021 alone compared to the same period in 2020 – it traded over $3 billion in volume.
It will come as no surprise that Big Retail has seen the writing on the meta-wall and gone into the Metaverse. Soon after Adidas announced their collaboration with the fantastically successful digital collectible space and “online social club” Bored Apes Yacht Club, Nike acquired RTFKT, an NFT art studio that creates collectibles. The opportunities in the Metaverse are endless.
Buy a Rolex watch and receive its digital NFT twin at the same time, or purchase a pair of digital Asics sneakers to wear on your meta-jog. Augmented reality will guide people to offline stores where virtual assistants can serve them, or they could take the same shopping trip from home virtually. These are just some examples of the exciting new commerce developments that will open up in the digital world. It’s not just Mr. Zuckerberg’s Metaverse and Instagram that are adding NFT support, Twitter and TikTok have already begun work on integrations.
The challenge for businesses lacking the kind of innovation funds Asics, Rolex, or Nike have at their disposal, will be finding low-tech means or partners to design collections, mint the NFTs, and provide access to the wallets needed to store them – without breaking the bank.
No matter what the commerce environment is – virtual or augmented reality or traditional stores – what never changes is the age-old demand that vendors place items in front of customers in a way that appeals to them, strengthens the brand, and triggers a sale. Some aspects of consumer marketing may never change, but rethinking commerce ecosystems that can integrate the new Metaverse and its commercial opportunities will require radically different product information value chain models (PIVC).
Trend 2: Livestream shopping – Millennials rebrand home shopping
One of the most talked-about and surprising trends to emerge in 2021, was the rebranding and rebooting of good old home shopping TV. Now totally digital and renamed “livestream shopping”, Millennials and Gen Z are looking to older shopping formats as inspiration for their future retail experiences.
Don’t let the old-school formats fool you. The combination of influencers and live shopping will be huge. With social commerce enabling in-app purchases for billions of trusting and active users, the potential for conversions is off the scale. Pinterest TV and Instagram’s Live Shopping events are just two of the more significant projects recently launched. Walmart also linked up with Twitter who has been offering Livestream shopping deals in North America since November 2021.
Trend 3: Sustainable shopping shakes off its niche status
Previously, consumer demand for products sourced, manufactured, transported, and sold according to objective sustainable criteria was limited to a minority of shoppers – coffee and chocolate being two notable exceptions. This is no longer the case. The 2021 European E-Commerce Report confirmed that sustainability was high on the agenda of e-shoppers in every country in Europe.
The shift to social and mobile commerce has provided shoppers with instant visibility of supply chains, sourcing, ingredients, packaging, and delivery options. In short, everything! Crude greenwashing – thankfully – is becoming a thing of the past – and the risks to a brand’s long-term reputation now far outweigh any foreseen short-term benefits. Buyers who understand the links between environmental issues and unsustainable manufacturing and supply chains are now drivers behind the phenomenal growth of sustainable shopping.
Aware of the internet’s transparency, businesses are becoming serious about integrating their sustainable credentials into those crucial micro-moments when consumers contemplate a purchase. In a 2020 survey, IBM estimated that 75% of respondents found it either “very important” or “moderately important” that their purchases were sustainable and/or environmentally responsible. Fast forward to 2022, instant feedback loops from customers to vendors have never been so important. 3D commerce systems will be an essential tool for marketeers asserting sustainability credentials to a woke, sincere, and wary public.
There are currently myriad forms of scoring and certifying systems for sustainability. We'll witness a gradual norming of these standards and their transfer to legislation in the coming years. This, in turn, will have a huge impact on vendors and marketers as they try to market the true sustainability of their product and supply chains – end-to-end green marketing campaign agencies are already surfacing. In the meantime, expect sustainable shopping – and the hugely important value system which underpins it – to continue cementing its presence in the retail mainstream.
Trend 4: More hyper-personalization and buyer customization options
One of the great contradictions of mass digitization hasn’t been the weakening of individual consumers' identity. In fact, there’s been an increase in personalization and customer-centric thinking. The trend towards hyper-personalization and 1-to-1 consumer interaction will continue to accelerate in 2022.
Why? Because this is what consumers expect from the brands they choose to buy from. Social commerce platforms and digital marketplaces have led their consumers to expect tailored shopping experiences wherever they shop. Online shopping experiences have led to an omnichannel consumer evolution across all commerce spaces.
This thinking has transferred from ecommerce to offline retail commerce. Consider Ralph Lauren’s custom sustainable colorization for apparel available in their stores. The fashion giants are giving consumers the option to request their favorite polo shirt in the colors they want. Nike for You sneakers and personalized shoes from Adidas are just two examples of previously offline flagship products being used to grow online market share with the promise of personalization.
2022 will almost certainly see a substantial increase in customizable fashion and the hyper-personalized shopping experience required to support it. The consumer-to-vendor feedback loops empowering tailored shopping require continued expansion of 3D commerce tech, which, in turn, will enable the identification of, and implementation of new product information value chains.
Trend 5: Lines between offline and online commerce continue to blur
The pandemic-induced global lockdowns forced offline high street retailers to invest in digitalization and new business models or face extinction. The result has been an explosion in online-offline hybrid business models, which have saved many city streets and shopping malls from ruin.
As offline brands move online via click & collect, or transform their physical locations for customers to look at products before going home to purchase online (see Tesla’s Design your Model), there’s been a similar move of online marketplaces going brick-and-mortar. Apart from Amazon’s huge move toward in-person stores, smaller brands that began online are also creating an offline presence for their brands and products in real-life stores: Peloton, Warby Parker, Allbirds, Gymshark, and Hedoine are just a few examples.
It will be interesting to observe Google’s Local Inventory Ads (LIA) initiative currently being rolled out across Europe. Google’s uber-hybrid shopping model enables online shoppers to find search results of items located in stores around the corner. Buyers can then choose if they want to go to the store and see the items in person before purchasing in-store or choosing click & collect.
As the lines between online and offline continue to blur, the trend towards a seamless omnichannel commerce experience will continue in 2022. Brands are beginning to wake up to the fact that brick-and-mortar and ecommerce are not two separate entities but two aspects of what is quickly becoming the same shopping experience.
Trend 6: Brand loyalty loses out as consumers favor performance
Customers are no longer just the kings and queens of commerce. They are fast becoming unicorns, at least from the branding perspective. Where once people stuck to what they knew, the proliferation of channels is eroding brand loyalty and consumer behavior to the point where first-time buyers can be your last-time buyers. It’s now performance marketing (not branding) that’s becoming key to winning over consumer sentiment. This will be no different in 2022. I envision intense competition to develop solutions to prevent more brand atrophy or even turn the tide.
What was apparent in 2019, crystal clear in 2020, and jumping up and down in 2021, now threatens to overwhelm us all in 2022. Commerce anarchy has increased the chances that brands make mistakes - mistakes that can have immediate and severe consequences - when pushing products to consumers through the gazillion channels and marketplaces available.
Some brands are throwing in their go-it-alone hats and building collaborations with other brands to try to compete with more prominent players – just consider the news that Bed, Bath & Beyond is teaming up with Kroger. Whether teaming up with other brands to increase visibility or turning to P2C management, companies are actively searching for solutions to prevent branding disasters.
Trend 7: As social commerce grows, so do challenges for sellers!
As all the social media giants are busy rolling out or integrating in-app checkouts, social commerce will continue to see exponential growth in the coming year. TikTok, who prefers to label its commerce ecosystem community commerce, joined the social commerce club in 2021. This leaves us all with one important question: How can vendors hit all of these channels at the right time to find the right consumers, and then place perfect product information in front of them?
Because social commerce’s success relies on providing seamless experiences, brands, retailers, marketplaces, and service providers will continue to invest in product-to-consumer (P2C) management to help their products reach their customers across the complex social commerce maze.
We aren’t far from a time when brand/consumer interactions will be streamlined through a single platform. Until that happens, however, companies will need P2C management partners to maintain their market position and create sustainable success.
Trend 8: More marketplaces with fewer sellers - a commerce contradiction?
Online marketplaces are popping up left and right, with once offline commerce giants creating the biggest headlines. Most recently, Michaels announced its own new marketplace to compete with Etsy, and Europe’s big-hitting tech retailer MediaMarkt is set to do the same. The Mirakl platform specializes in making it easier for retailers to become marketplaces themselves.
This trend begs two critical questions. Is it smart for retailers to create their online marketplaces? And how will this impact brands? For the answers to these questions, we’ll just have to wait and see.
Launching a marketplace is one thing, making it work is another. Once a retailer launches a marketplace, they also need to attract sellers, with more and more marketplaces on the horizon, attracting quality sellers will be one of the biggest challenges.
This is especially true given the rate that sellers are disappearing from marketplaces. SellerX is just one example of a startup accumulating, then consolidating mid-range sellers into larger stores – using their tech solutions and investors to entice sellers to take a bow.
While SellerX has begun mopping up sellers on Amazon in Europe, OpenStore has done the same on Shopify in North America: The stores cash out, and the new owner consolidates their acquisitions into efficient super-seller stores. The big question here is if sellers are cashing out for the rewards, or if commerce anarchy is forcing these sellers to consider throwing in the towel.
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