The ecommerce landscape has changed dramatically over the last couple of years. Driven by the COVID-19 pandemic, businesses had to deal with more change than in the previous two decades. Shipping and acquisition costs are rising at an alarming rate, while returns on online advertising are plummeting.
At the same time, consumer behavior is rapidly evolving. As more money than ever before is being spent online, customer expectations are through the roof. People are more selective about which companies to buy from and less accepting of slow delivery times (unless it’s for the right brand), while ongoing supply chain issues are forcing merchants to permanently change their fulfillment strategies.
How do you navigate these challenges and set yourself and your clients’ businesses up for success in the new year? We asked leading Shopify partners for their thoughts on the most important shifts in online shopping and how you can support your clients in addressing them to ensure sales will thrive in the new year. Follow their advice, and you’ll be more prepared for what merchants need in the months ahead to stand out from the competition.
For a deeper dive into the trends that will shape 2022, check out Shopify’s Future of Commerce report.
1. Meet and exceed customer expectations
With 2021 ecommerce sales topping the record highs of 2020, we can expect online shoppers in 2022 to be even more experienced and sophisticated.
“Customers expect more,” he points out. “Merchants will need to meet them where they're shopping through multichannel, provide on-demand customer support through automation and agents, and fulfill orders within 48 hours or less. That's the new bar for good.”
To take it to the next level and create a truly great experience, Elster recommends merchants provide novelty to customers, for example with limited edition products and emerging technologies like augmented (AR) and virtual reality (VR) when applicable.
“Whether they know it or not,” Elster points out, “some online merchants will find themselves in a technological arms race with their competitors.”
2. Tell the story of your client’s brand
In 2022, to really set themselves apart from their competitors, merchants need to nail their brand identity. It’s the foundation for all marketing communications and an opportunity to highlight unique differentiators: Fifty-two percent of shoppers are more likely to purchase from a company with shared values.
“The brand is what separates businesses that are growing at a rapid rate from businesses that are just getting by,” ecommerce consultant and growth marketer Kate Collinson believes. “Run a workshop with employees and really hone in on the brand identity and its values. Why does the brand exist? Who are they, what do they bring to the table, what do they look like to customers, and how are they going to be recognized in the market? What are their key differentiating factors?”
“Independent brands need to tell their story,” agrees Ben Jabbaway, founder and CEO of ecommerce marketing platform Privy. “There was a reason they started their business. Maybe they were passionate about a product or service and left their job to work on it full time. Telling that story, and anchoring the marketing around it, builds a connection with the customer. That’s going to take the business to the next level.”
3. Authentically engage customers with social commerce
Social media presents new commercial opportunities, from brand marketing and product discovery to customer service and shoppable advertising. About 30 percent of internet users in the United States already make purchases directly within social platforms, and sales through social media channels around the world are expected to nearly triple by 2025. In 2022, merchants can’t avoid social shopping anymore: More than one-third of Facebook users alone are planning to make a purchase directly through the platform in 2022.
“A lot of brands are also taking advantage of selling on TikTok, and it's been fun to see how they are experimenting and getting creative,” Kelly Vaughn, founder and CEO of Shopify Plus agency The Taproom, comments. “What’s important to realize, however, is that there’s not a single one-size-fits-all option. You need to carefully weigh which social channels to sell on, especially as your client's customers don't necessarily all belong to the same community.”
Nadine Iacocca, partner and chief strategy and growth officer at Shopify Plus agency Stream Commerce, agrees. Merchants need to sell where a lot of customers spend most of their time, and that’s on social media.
“Content is key, and it’s crucial to always have an eye on the consumer journey, " she advises. “Make the speed to purchase as easy and as positive as possible for the consumer. You aren't just pushing a sale, you're driving equity and a relationship with the brand. Every touchpoint is key to the overall experience. So make sure that you're looking at it from all angles.”
“To really gain the acceptance of teenagers and consumers in their 20s, brands’ activity on social media needs to be genuine,” adds Robert Befumo, head of ecommerce strategy at Parkfield Commerce, a Shopify Plus agency that specializes in helping B2B brands scale their online DTC operation. “As soon as it looks forced, you will lose that group. You need to have a true understanding of the audience and speak their language.”
4. Create live shopping experiences
Live shopping—video livestream events similar to QVC-style product demonstrations—is establishing itself as the rising star of social commerce. Brands are rushing to adopt this trend, which originated in Asia, to engage with customers in a more interactive way.
According to research conducted by Shopify for The Future of Commerce report, the number of app installs for livestream selling grew by 61 percent globally between January and September 2021, compared to the same time period in 2020. Dan Conboy, managing director of Shopify Plus agency Statement, puts live shopping’s popularity down to the opportunity to not only showcase products but also link directly to a brand’s ecommerce platform to drive sales.
“Global brands such as Avon, Uniqlo, and Tommy Hilfiger have been innovating in this arena for several years, but the technology is now accessible for brands of all sizes,” he explains. “There is a wide range of apps that integrate with Shopify including Bambuser, HERO—recently acquired by Klarna—and Livescale, which offer a seamless way to connect brand stories with commerce features to monetize the experience.”
Services like dedicated livestream shopping app OOOOO also enable merchants to expand their reach and improve brand and product discovery.
“Customers seek ever closer and authentic relationships with the brands they choose to shop with,” Conboy points out. “Live shopping could be a great innovation to consider as part of your strategy in 2022 to further build customer engagement, loyalty, and brand differentiation.”
5. Rethink personalization to build truly tailored customer experiences
Personalization has always been important to online retail. Successful programs have proven to lift revenue by up to 20 percent, reduce cart abandonment, and increase customer satisfaction.
While a vast number of apps have made personalization attainable for merchants of all sizes, Gavin Ballard, founder and CEO of Shopify Plus partner Disco Labs, believes a couple of macro trends mean brands will need to heavily invest in this space in 2022.
Own your customer data
With an increased focus on consumer privacy and efforts by platforms like Facebook to silo and protect their valuable data, it’s getting harder and harder for merchants to learn who their customers are and where they’re coming from.
“Personalization is only as good as the data it’s based on,” explains Ballard. “So brands will increasingly need to acquire information directly from their customer base.”
He suggests two important ways for merchants to do this: First, by ensuring they’re selling on a platform like Shopify that lets them “own” their customer relationship; and second, leveraging zero-party data solutions like EnquireLabs or OctaneAI to garner further insight directly from customers.
Use the data effectively
It’s critical for merchants to carefully consider how they then use that data to provide customers with truly useful and personal experiences.
“For me, one of the most frustrating things to see is a brand with lots of valuable insight into their customer base simply handing all that data to third-party marketing software in the hope it’ll generate a conversion lift,” Ballard laments. “There absolutely has to be a thoughtful review of how that data can be used to help customers—and the merchants themselves are in the best position to do that.”
A good example is Australian Shopify Plus merchant PetCulture, which uses zero-party data acquired from customers as part of an onboarding process to merchandise products most appropriate for their cat or dog. Taking this a step further, Yumi sells a baby food subscription that’s tailored to not only the age of a customer’s child but their food allergies and preferences as well.
6. Craft effective content to improve customer retention
As third-party cookies are phased out, brands will need to explore new ways to attract customers and build long-term relationships with them. One way to do this is by designing a post-purchase experience and using content to enhance it.
“Customer service post-purchase is incredibly important,” Taproom’s Kelly Vaughn advises. “If someone is purchasing something that they’ve never bought before that requires an educational component, you need to have content for that. Create how-to videos, show how other people are using your products, and build a community around them to really own that customer relationship.”
This relationship doesn’t end at checkout, and so the continued popularity of subscription models is another opportunity to create personalized experiences tailored to suit customers’ unique needs. Dan McIvor, founder and chief future officer at Shopify Plus agency Swanky, says the easy, automated regularity of subscriptions is perfect for consumers who highly value convenience and flexibility and predicts the potential for further growth is huge.
“Get it right, and there are plenty of perks to be had,” McIvor explains. “Subscriptions are a great way of improving customer retention and tackling the age-old ecommerce challenge of the ‘one-time buyer’—particularly pertinent post-Christmas when brands are fighting hard to get their holiday shoppers back buying again. Plus, there’s the predictable recurring revenue, reduced uncertainty around inventory management, increased return on acquisition spends, and richer customer relationships.”
Whatever channel you use or campaign you create, ensure the messaging is seamless. “Work hard to have a lot of continuity between the front-end design, the customer journey, and the marketing,” suggests Chris Pointer, CEO of Shopify design and development agency Pointer Creative. “Make sure that the same language is used, and that the look and feel is consistent.”
7. Experiment with AI for content creation
Artificial intelligence has had a big impact on ecommerce over the last few years. It plays a key role in improving product recommendations, product search, customer segmentation, and customer support, which led to significant performance improvements for brands. So where will AI take ecommerce next?
Ross Beyeler, chief operating officer of Trellis Commerce, believes that AI-technology will soon also bring automation, intelligence, and scale to brands’ content production and marketing.
“The ability to augment existing staff with AI-enabled tools will provide merchants with a significant expansion of their capabilities without having to scale costs with headcount,” he explains. “This could lower the barrier for more merchants to gain a pathway to profitability and growth in what is becoming an increasingly competitive space.”
Beyeler says AI can help teams in the following areas:
- Content marketing: Services such as Frase and Jarvis use AI to help merchants generate blog copy, product copy, and landing page copy.
- Visual design: Tools like Designs.ai and Synthesia use AI to generate logos and social as well as video content.
- Ad campaigns: Platforms such as Pencil, EXOD, and Bannerbear automate the creation, testing, and optimization of ad creatives.
8. Build customer loyalty with group buying
Deb Mecca, director of marketing at Shopify app In Cart Upsell, predicts that the next wave of referral and loyalty that will take center stage is group buying to upsell within a brand’s customer base and widen it to their networks.
“It’s been prevalent in China for years and slower to adopt in the US, although that is swiftly changing,” she points out. “TikTok has this capability already in the Chinese version of the app, which enables several people to participate in an offer together.”
Outside of social network group buying, post-purchase upselling has also made a huge wave in 2021—another sign that people respond well to opportunities to deepen their relationship with brands.
“Though discounting has become a dirty word these days, so has spending more money on advertising,” Mecca cautions. “If discounting is done more creatively in a group buying setting, however, stores will want to increase reach and the value offered to customers and their networks.”
9. Share your client’s sustainability efforts
Recent political events and the increasing visibility of climate change have put sustainability at the forefront of people’s minds. In fact, according to Shopify’s Future of Commerce report, which includes proprietary research by Forrester Consulting, in the past year, nearly half of customers chose to buy from brands that have a clear commitment to sustainability.
However, as more brands start pushing sustainability, it will become harder for customers to determine which ones are truly changing for the better, and which are greenwashing. Freyja Wedderkop, marketing assistant at Shopify Plus agency We Make Websites, believes that in 2022 brands need to be more transparent than ever.
“It’s not enough to say you are sustainable or to just offset purchases,” she warns. “Customers want to see every step of the supply chain: Where products are made, who by, and how they’re delivered right through to how returns are handled. Fashion brand TOAST, for example, publishes a social conscience report that details initiatives like reselling all non-faulty items that have been returned by customers to avoid them going into landfills.”
Wedderkop and her colleague Josh Lamb recommend clearly and honestly communicating the positive changes a brand is making to reduce its impact on the environment throughout the website:
- The homepage: Use UX/UI design to share a brand’s stance on sustainability with customers. Brands can take this to the next level by getting a BCorp Certification, which lends credibility to their sustainability statements and decisions.
- The product detail page: Explain what goes into making the product, how the materials were sourced, as well as who made the product and where. Ethical clothing brand Pangaia, for example, shares the science behind the innovative sustainable materials they use. If your business is in the consumer packaged goods sector, consider partnering with waste management company TerraCycle to showcase the lifecycle of your product (Example: Good Chemistry).
- The checkout: Be transparent about how you will offset the carbon emissions from customers’ purchases. Shopify offers multiple ways to offset the carbon through deforestation protection projects, for example, with the Offset app.
- The About Us page: Highlight all your business’s efforts to lower the impact of your products on the environment. Buyback programs are a great way to show you understand and prioritize the lifecycle of your products (Examples: Girlfriend Collective and Patagonia).
10. Clearly communicate delivery times with customers
Customers now expect fast, free, and on-time delivery and look for the estimated timelines before purchasing. If the shipping promise isn’t met, it can have a significant impact on the consumer’s trust: A 2020 survey found that when packages are delayed but consumers aren’t informed, 69.7 percent of customers would be less likely to shop with that retailer again.
Brands, therefore, need to be more transparent throughout the checkout experience and proactively communicate with customers. It’s another opportunity for brands to innovate and differentiate themselves from the competition. Sharon Goldstein, founder of AI-driven ecommerce personalization platform LimeSpot, recommends building an experience around the supply chain.
“Don’t just think about it as fulfillment,” she advises. “As the inventory gets more complicated, we need to give consumers the flexibility to place pre-orders, split orders, or pick up a product in store. If you only offer one way to deliver, the cart abandonment rate is likely to be higher. The consumer needs to feel like the time from shopping to having the product in their hands is a shorter and less complicated experience.”
P3 Media’s David Wagoner agrees that adding pre-order functionality to an online store helps build pre-drop buzz and absorbs the impact of delays. “Also consider adding an option to the product detail page to notify the customer when a product is back in stock, which is a great lead capture opportunity. And then just be transparent about fulfillment issues. Use areas of the website like the promo bar, and automate emails or SMS messages to keep customers up to date. For higher ticket items, give them a call if you can. The human touch has become a competitive differentiator in the modern economy!”
It’s all about the customer
While there are undoubtedly many challenges facing ecommerce at the moment, they also pose more opportunities than ever to innovate and stand out from the competition.
There’s a massive increase in the number of channels businesses can sell and engage customers on, but what’s key to being successful in 2022 is how you communicate. Create a consistent and seamless customer experience across all platforms. Make it fast and easy, offer flexibility and convenience. Pay close attention to the entire customer journey and go beyond the purchase. Experiment with technology but ensure it’s the right fit for the audience.
Critically, merchants need to have a strong, memorable brand identity, be vocal about their values and what they stand for, and know their audience inside out. Ecommerce is changing fast, but if you’re ready for it, you can help merchants offer better experiences and foster deeper, long-term relationships with their customers.
Learn more about the rapidly changing ecommerce landscape with the top trends shaping 2022 and beyond, and the recommendations you need to help merchants build brands that last.