Top 5 Ecommerce Trends of 2022
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The Future of Commerce is a topical monthly newsletter, brought to you by THG Ingenuity, focused on highlighting the latest, global industry insights and trends.
To find out more about THG Ingenuity, visit www.thgingenuity.com, where blogs, infographics and reports relating to all things commerce can also be accessed.
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Top 5 Commerce Trends of 2022
It is without question that the COVID-19 pandemic has fundamentally redefined every aspect of our lives, from working and shopping, to socialising and how we pay for services, but as we navigate from the ‘new-normal’ to an ‘even-newer-normal’, which major commerce trends are expected to experience continued growth?
To commence our monthly series, we’re recapping our Top 5 most popular trends of 2022 that continue to dominate the commerce sphere.
1. Digital Transformation
“Retail ecommerce sales are projected to grow to $5.4 trillion worldwide in 2022 from $3.3 trillion in 2019” - Statista
The retail industry is a prime example of how brands have had to adapt to remain competitive. Since the birth of the internet, in 1983, digital commerce has gone from a “nice to have” to a “must”. Further accelerated by the pandemic, for brands to survive and thrive, striking the balance between technically advantageous and authentic in their online customer experience is essential.
Yet, the additional challenge upon converting to a digitalised world, whereby attention is the most prized currency, is that branded content and communications must be engaging and provide purpose. In partnering with StoryStream – the User Generated Content platform for ecommerce – THG Ingenuity is helping brands make the most of the opportunity presented by human-to-human marketing.
Consumers worldwide are expected to continue to evolve their online purchasing patterns and priorities to conform to their new realities. Realities whereby content must be captivating, ease of accessibility is paramount, and virtual spheres are increasingly popular. Take the metaverse, for example, with an anticipated 2030 global marketing valuation of $678.8 billion USD.
Retailers able to respond quickly to growing consumer expectations will gain a competitive advantage in an age of accelerated change. Reshaping the identity of many retailers, leading them to become platforms, ecosystems and true omnichannel players. Read our Digital Transformation report, exploring the best ways to create authentic, personal connections with customers through digital channels.
2. Direct-To-Consumer (DTC)
“The business model to facilitate digital transformation” - THG Ingenuity
While most brands were already operating online long before the pandemic started, for many, the global shake-up brought about by Covid-19 marked a turning point, emerging as a favourable moment to assess and rethink their digital models. In breaking away from a heavy reliance on third-party resellers and online marketplaces or intermediaries, DTC offers the opportunity to gain greater control of operations, as well as heightened ownership of the full customer experience. This, all the while, providing flexibility to scale both locally and to foreign locales efficiently.
The online beauty reseller Cult Beauty, acquired by THG in August 2021, offers the perfect example of how efficient and speedy a platform migration can be, and the extent of the positive impact it can have on performance and conversions. THG Ingenuity successfully migrated Cult Beauty to its platform in 10 weeks, within just six months of acquisition. This change delivered immediate improvements to Cult Beauty’s site, including a 30% uplift in conversion rates, a 6% increase in average order values and a 36% reduction in page load times.
Find out more on DTC and the benefits of a single service provider here.
3. Personalisation
“The global and personal care industry is valued at $532billion USD and is expected to reach $800billion by 2030"– Forbes
The beauty industry, specifically, has undoubtedly seen an incremental shift to the way its consumers expected - and continue to expect - increased personalisation. An industry with products that typically tended to be, almost exclusively, purchased in-store, consumers were directed into buying products online due to closures of physical stores throughout 2020/21.
With over 50% of global beauty consumers planning to shop more online since the pandemic (WSJ), this move toward digital shopping has irreversibly pushed brands to update how they interact with customers, with the use of emerging technologies, and advances in VR and AR, proving to be increasing popular in facilitating personalised ways of virtually trialling products and services (see PerfectCorp, for example).
Read more in our Evolution of the Beauty Industry report, where we further explore key trends in the beauty industry and discuss what the future holds for the sector, with our Global Beauty Tech Trends infographic demonstrating how advances artificial intelligence (AI), virtual reality (VR) and augmented reality (AR) technologies continue to improve the customer experience and keep audiences engaged in a fiercely competitive market.
4. Social Commerce & Gen Z
“Gen Z have the fastest growing income, expected to reach $33 trillion by the end of the decade” – Euromonitor
With the growth of platforms like Facebook, Instagram, Twitter and, more recently, TikTok, the digital environment has become more and more social, changing not only how billions of people connect with one another across the world but also the ways in which they interact with brands and shop for products. The majority of these platforms, of course, favoured by the digitally native Generation Z (Gen Z).
Born between 1997 – 2012, Gen Z, arguably, continue to be the generation brands are [the most] eager to understand when it comes to social commerce. Gen Z account for a third of the global population and spend an average of three hours on social media everyday - not just to communicate with others, but also for entertainment and shopping-related activities. So, whilst older generations are streaming their favourite Netflix series, Gen Z are streaming YouTube and TikTok videos (The Drum).
Whilst considerable lengths of time spent online may sound frivolous to generations not so digitally savvy, Gen Z are a generation with strong values and convictions, who crave authentic brands that align with their own beliefs. They seek transparency and want to add a positive contribution to the world, championing diversity, inclusion and sustainability.
As Gen Z’s spending power continues to grow exponentially, retailers are seeking ways to understand this rising consumer demographic and learn how to better connect with it. Discover more about what drives these digitally native, pragmatic consumers and what they expect from brands in our latest Gen Z infographic and Gen Z report.
5. Payment & Delivery Options
“The number of digital buyers is predicted to surpass 2.14 billion worldwide in 2022.” - Statista
The past five years have proven to be transformational for the retail sector. As retailers were forced to adapt to changes in customer behaviour - including shifts in channel preferences across the consumer journey – expectations surrounding speed and convenience were also on the rise. Today, 46% of global consumers expect to receive their deliveries within two to three days, whilst 30% of customers want their order delivered within 24 hours (Statista).
Yet, increased expectations surrounding delivery times were not the only thing on the rise. Since the introduction of By Now, Pay Later (BNPL) financing options - which not only allow consumers to spread the cost of goods over short periods of time but also make cross-border commerce ever-more possible – more and more consumers bank on brands offering delayed payment options. To compliment this, as well as partnerships with several global BNPL providers - including PayPal Credit, Klarna and clearpay - THG Ingenuity most recently partnered with Atome, Asia’s leading By Now Pay Later brand, with over 10,000 online and offline retailers in 10 markets across Asia.
Naturally, as the world simultaneously speeds up and slows down, retailers must continuously optimize their supply chains and accelerate fulfilment operations if they wish to remain competitive. Some of the recommended ways of doing this are to:
- Understand that fast delivery is key
- Offer alternative payment methods (BNPL)
- Make returns easy
- Adopt automation technology and robotics
- Leverage inventory analytics
- Research customer preferences on delivery methods
Explore the above in more detail via our top tips to improve customer delivery services blog.
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THG Ingenuity is the leading end-to-end provider of ecommerce services, helping brands of all shapes and sizes grow their digital operations and reach global audiences effectively. We have helped beauty brands including Cult Beauty, Neal’s Yard Remedies, LOOKFANTASTIC, ELEMIS and many more, thrive in international markets and grow into key players in the beauty sector.
Find out what we can do for your brand: [email protected]
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