What’s Next for E-Commerce in 2022? 5 Predictions About Innovation
January 6, 2022
In recent years, we've seen seismic shifts in the customer experience (CX), with brands aiming to meet consumers' rising expectations for e-commerce and the post-purchase experience. In 2022, these expectations will continue to evolve. E-commerce brands will also have to deal with growing competition, supply chain issues, as well as product and labor shortages
Yet, as General Motors CEO Mary Barra has said, "Remember that hope is not a strategy. Problems don't go away when you ignore them—they get bigger." As such, e-commerce players need to meet their problems and challenges head on by innovating around CX.
Here are five ways they'll do it this year.
Packaging emerges as the "new storefront"
While more consumers are shopping online than ever before, there are also more e-commerce channels for them to choose from. So, with the competition being stiff and consumers moving online, it is critical for brands to create a memorable experience across the consumer journey, from pixel to package.
Currently, e-commerce companies are spending $49 billion on packaging but not using the medium to its fullest potential. In 2022, packaging will be the new storefront, defining brands' ability to provide unforgettable, eco-friendly, and convenient experiences. Take a look at Everlane: The brand has challenged the status quo by including personalized notes while taking measures to eliminate plastic from their logistics.
Everlane shows that packaging is a huge part of the future of the supply chain. Operationally, packaging is usually a line item next to shipping costs and return rates. Yet, it should be thought of as a marketing and CX opportunity in an industry that's constantly evolving.
Data tools see more investment
The last mile of delivery continues to speed up. Just six months ago, Amazon and Walmart started offering same-day delivery for some items, while others like Instacart took it a step further, introducing 15-minute delivery.
As supply chain visibility continues to be imperative in 2022 from the warehouse down to last-mile delivery, there will be more investment in data tools. We're seeing it now with the FTC ordering information on supply chain challenges from major retailers to gain insight on the larger supply chain blockages, as well as the White House's Supply Chain Dashboard that will track progress in relieving the bottleneck of imported goods.
Furthermore, consumers expect to know exactly where their shipment is from purchase to last-mile delivery; the same goes for returns. Consumers expect e-commerce players to deliver on supply chain efficiencies like Amazon, allowing customers to return items in a variety of conditions through multiple drop-off locations. And unless you have the right tools, these things are not possible.
VIP returns grow
The changing nature of retail means brand loyalty — which isn't just credit card points and discounts anymore — is also in flux thanks to e-commerce. Global e-commerce was expected to hit $910 billion during the 2021 holiday season, when online returns were projected to cost brands up to $30 billion.
What's more, Narvar found that 58 percent of online shoppers planned to bracket their purchases during the holidays, meaning they planned to send many items back. With all of that in mind, online returns have emerged as a huge opportunity for brands to build loyalty while improving business efficiencies.
In 2022, more brands will create VIP policies that reward loyal customers with better returns options, while limiting options for costlier customers, like serial bracketers. DSW, Athleta, and Saks Fifth Avenue already offer such policies. DSW, for example, extends free online return windows for its VIP Gold (90 days) and VIP Gold Elite (365 days) customers. Other DSW customers must pay $8.50 for returns. This tiered strategy encourages VIPs to be loyal and helps the brand keep the cost of returns down compared to a free-returns-for-all policy.
Circular e-commerce grows
In the next 12 months, circular e-commerce will continue building steam with brands such as Levi's, The RealReal, thredUP, and Everlane leading the way. Circular commerce is getting more diverse than just branded thrift platforms. For instance, Patagonia and REI are running buyback programs, while H&M and IKEA are creating new items with reuse in mind.
This trend is here to stay and then some. Secondhand clothing is on pace to be twice the size of fast fashion by 2030, and it makes sense for both the planet and retail companies. According to a Forrester research study, 60 percent of online adults in France, 49 percent in the U.K., and 41 percent in the U.S, want to purchase environmentally sustainable products.
Livestreaming takes hold in the U.S.
Nordstrom, Petco, and Bloomingdale's have tested out shoppable livestreams in recent months. Just last month American Eagle (AE) partnered up with influencers Addison Rae, Madison Bailey, and Outer Banks cast member Chase Stokes to host a shoppable TikTok stream — collectively having nearly 100 million followers on the app. AE found the average watch time was a staggering 11 minutes, and while the retailer has not shared broader impact numbers, you can expect more U.S. retailers to try their hand at it in 2022 after seeing the success from these brands.
Roughly 30 percent of China's population took part in livestreamed commerce in 2020, and China is often a leading indicator for things to come in western countries. These formats are driving billions of dollars in e-commerce sales for Chinese tech giants Alibaba, Baidu and JD.com.
In closing, 2022 will be another year of retail challenges that can be met with e-commerce innovation around packaging, the post-purchase experience, data, circular e-commerce, livestreaming, and other emerging ideas. And as these concepts take hold, they will be of greater importance because the brands that excel at them will be meeting or exceeding their customers' expectations.
Catherine Dummitt is VP of Marketing at Narvar, a post-purchase engagement platform.
The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.