Ecommerce Trends in 2022
With ecommerce sales in the US set to surpass $1 trillion in 2022, it is safe to say that ecommerce across all industries is reshaping the way people buy from and interact with businesses and their products.
With this in mind, it is imperative for businesses to adapt to the rapidly changing commerce landscape and understand how consumer behavior is constantly evolving. To help you stay current with retail industry trends, we’ve put together a list of the top ecommerce trends for 2022 as you prepare for a year of growth ahead.
1) Sustainability
As customers increasingly view their purchases as statements about their values, a rapidly increasing amount of businesses are incorporating sustainable practices into their ecommerce business. In the past five years alone, search queries for “sustainability” across the world have skyrocketed, from 164.5K in December 2016 to 724K in November 2021.
Additionally, 77% of consumers are concerned about the environmental impact of the products they buy, and in the past year, 44% of customers chose to buy from brands that have a clear commitment to sustainability.
To gain the trust and loyalty of their customers, it is vital for organizations to think about how they can become more sustainability-minded and climate-efficient as a business, as well as prove to their customers how they are offsetting carbon emissions and giving back to the planet. Below, we have outlined two sustainability initiatives (of many) that we have seen companies implement, and will continue to in 2022.
Transparency in Corporate Sustainability:
Consumers want to buy from brands that can prove how they offset carbon emissions, reduce single-use packaging, or give back to the planet. Ethically-minded companies have now started sharing specific information about their carbon footprint with consumers, and are being held accountable to achieve their goals through certification organizations such as Climate Neutral and B Corporation.
Companies are communicating their carbon footprint and sustainable progress to customers in a variety of ways. For example, Nike maps its manufacturing plants, Patagonia shares details about vendor operations and staff on its Footprint page, while Reformation offers detailed information on everything from local manufacturing to the use of recycled clothes hangers. Some companies, such as Another Tomorrow, are even sharing their water consumption and sources of energy used in production.
As an example, Mastercard just unveiled a new carbon footprint calculator, for banks. This feature allows banks to equip its customers with carbon footprint data and insights to help inform spending and offer ways to contribute to sustainable initiatives, such as reforestation.
It offers consumers a snapshot of the carbon emissions generated by their purchases across spending categories. They then convert the data into digestible equivalents, such as the number of trees required to absorb the same amount of CO2, as well as tips for how to live more sustainably. Consumers also have the option to contribute to reforestation projects.
"The Mastercard Carbon Calculator informs consumers about the carbon footprint of their purchases, so that they can make more mindful spending decisions and contribute to forest restoration,” said Jorn Lambert, Chief Digital Officer, Mastercard.
Meanwhile, the Responsible Business Coalition, with support from Accenture and Vogue, has created an Impact Index, intended to make it easier for brands to communicate their overarching sustainability progress. The index is a digital logo that will appear on websites for garments and will show the environmental or ethical criteria the garment meets.
Other platforms including Remake’s Seal of Approval and Good on You’s ratings platform are all working on similar initiatives.
In order for these companies to hit their sustainability goals, they have signed on to become members of Climate Neutral and B Corporation – nonprofits dedicated to converting more companies to eliminating carbon emissions and providing ways for them to achieve a net-zero future.
Over 350 brands are currently participating in the Carbon-Neutral certification program and over 4,000 in B Corporation certification. We are seeing their popularity increase, as more brands are signing on to work with them towards a better future.
Finally, studies have shown that businesses with better environmental standards and corporate responsibility have higher productivity and lower staff turnover. 56% of professionals report being more likely to stay in a company with a sound sustainability agenda. Not only are customers demanding transparency, employees are seeing out work environments that have put sustainability at the forefront of their business.
As consumers demand transparency, brands are holding themselves accountable and sharing their sustainability initiatives with their consumers.
Packaging:
Businesses are also re-examining their packaging and changing the packaging materials they use, as they think about ways to become more sustainable organizations.
According to IBM, 72% of global consumers want brands to use sustainable packaging, meaning packaging can have a big impact on a purchasing decision. We will see sustainable packaging play a major role in the next era of shipping.
States like Oregon and Maine have recently passed laws requiring companies that sell packaged goods in their states to join a producer responsibility organization (PRO), pay membership fees and report the quantity and type of packaged products they sell.
On top of this, Oregon’s law requires that 25 of its largest producers periodically evaluate and disclose the life cycle and environmental impacts of a fraction of their portfolio. California, New York, Vermont and Connecticut may move on passing similar legislation this year.
These laws give consumers insight into a brand’s sustainable packaging efforts and should incentivize companies to develop more environmentally friendly packaging.
Additionally, California passed a groundbreaking Truth in Labeling for Recycled Materials last year, which will include recycled content mandates that establish minimum requirements for post-consumer recycled content in packaging.
"We are buying products because we are being fooled by the labels to think that they are recyclable, biodegradable…because there is no federal standard that has any sort of enforcement," said Heidi Sanborn, founding director of the National Stewardship Action Council and chair of California’s Statewide Commission on Recycling Markets and Curbside Recycling.
This legislation will require brands to actually use recycled materials, reusable packaging, shift away from plastic, etc. and include product information about the origins of materials and how to recycle them. It will also encourage consumers to continue to double down on their demand for sustainable packaging, and retailers to increase their efforts on using sustainable, recycled packaging.
Brands such as Boox and RePack have also entered the market and have designed packages that are meant to be shipped, returned, then reused over and over again. These brands supply ecommerce retailers directly with their boxes to use for future orders.
These trends highlight the shift in consumer focus toward the environment, and present significant opportunities for ecommerce businesses willing to incorporate them into their practices. As millennials make up the largest part of the buying ecosystem, a focus on sustainability will undoubtedly continue as one of 2022’s ecommerce trends.
2) Augmented Reality (AR)
As technology gets more advanced, so does the ecommerce shopping experience for customers. In 2022, businesses will continue to experiment with technology as a way to differentiate themselves from their competition. This can range from 3D mapping to Augmented Reality to product visualizers.
Augmented Reality (AR) offers customers the ability to “try before you buy,” using 3D mapping to help customers try on products or preview experiences before making a purchase. Brands are already using this, allowing customers to virtually place a piece of furniture in a room or try glasses frames on their face.
While customers are trying out the products online, brands are able to create the offline retail experience that many customers still crave. Yet, they are able to test on their own time, and provide them with an engaging and easy buying experience. Platforms such as Facebook and Pinterest have already invested in AR technology of their own to add to the social shopping experience.
Additionally, this has a positive impact on the environment, as customers are able to preview items and experiences before purchasing, their purchase decisions are more informed, thus leading to fewer returns. With the development of AR technology and the trend of social shopping rising, AR commerce will continue to grow in 2022.
3) NFT’s
With Shopify’s recent announcement that eligible sellers can now sell NFT’s (non-fungible tokens) via its platform, a whole new world for ecommerce merchants has just opened up.
This began with the NBA’s Chicago Bulls launching its first ever NFTs, including digital artwork of NBA championship rings, purchasable on Shopify. The Bulls sold out of the NFTs within just 90 seconds of launch.
“By making it possible for merchants to sell NFTs directly through their Shopify storefronts, the company says it’s creating access for merchants who want to sell NFTs. They will eventually be able to choose which blockchain they’d like to sell on based on their products and customer base since Shopify supports multiple blockchains,” Kaz Nejatian, Shopify’s VP of Merchant Services said. The NFT Beta program is currently available to Shopify Plus merchants based in the US.
Additionally, brands like Visa, Adidas, and Nike have already begun investing in the NFT space, including Nike acquiring a startup that creates NFTs of sneakers and other collectibles.
Brands have launched NFT collections that range from digital collectibles and in-game assets, to exclusive access passes for a brand’s event or experiences. Loyalty programs will arise, with brands offering exclusive benefits, such as private forums, exclusive merch, discounts, etc. through limited edition collections of NFTs.
While NFTs are still in their infancy, they have huge potential to reshape the way consumers and brands interact. 40% of consumers say they plan to pay with cryptocurrency in the next year. As technology evolves and adoption increases, not only will we see brands using blockchain technology as a payment option, but also as a way to truly build, grow, and ultimately, monetize off large-scale brand communities.
4) More Payment Options
If your business only accepts payment via check or credit/debit card, it is time to consider new options. Many retailers are diversifying their payment technology options, such as allowing seamless 1-click payment options, mobile wallets and apps, or buy with a payment plan - with no extra fees (Buy Now Pay Later). Additionally, offering one click reordering based on order history (by saving payment method information).
With COVID-19 cases still present, the demand for touch-free payments and digital payments has been more imperative than ever. Diversifying payment methods allows customers flexibility when they are shopping and ensures a seamless and quick checkout process when they are ready to buy, thus improving your customer service experience.
To follow this trend, you can start with two easy steps: adopting e-wallet payments such as Apple Pay, and Paypal, and looking into interest-free financing solutions.
Businesses that are able to offer a variety of payment options are more likely to reduce cart abandonment, build trust, and in the end, encourage shoppers to spend more. Nothing increases your business’s chances of getting paid like diversifying your accepted payment methods.
5) Recommerce (Upcycling, Vintage, Second Hand)
Recommerce is the selling of previously owned, new or used products, through online distribution channels to buyers who repair the item, if necessary, then reuse, recycle, or resell them.
We have already seen a sharp rise in brands participating in recommerce programs, but research firm Cowen now predicts recommerce will account for 14% of the apparel, footwear, and accessories market by 2024, up from 7% in 2020. Resale platform ThredUp suggests that apparel resale alone will be a $77 billion market by 2025.
Retailers such as Ikea, Outerknown, Day Owl, Best Buy, etc are now expanding their inventory to include used items, as well as offer buyback programs to their customers.
Outerknown offers customers the option to sell their pre-owned products for store credit through their online marketplace. Arcteryx apparel buys back, cleans and repairs, and then resells their gear to those looking for sustainable options at discounted prices.
Some businesses are focusing their entire business platform on second hand items: Poshmark and Depop are two leading platforms focused on second-hand growth. Poshmark’s resale platform is estimated to be worth an impressive $3 billion, with over 60 million users.
Recommerce is both cheaper and greener, and we expect to see more and more brands offering these initiatives to customers throughout 2022.
6) Social Commerce
It is probably not a surprise that more people are turning to social media to search for new products and brands. 73% of businesses are already participating in social commerce while 79% expect to be doing so in the next three years. By 2025, social commerce sales are projected to reach $79.6 billion, giving merchants another channel for sales and marketing.
As consumers are already learning about products and brands on social media, it makes sense for them to purchase items through the platform. It is one less click for customers to take and one less chance for them to abandon the cart.
Many options exist for selling on social media, including turning Instagram feeds into end-to-end retail shopping experiences, and selling items via Livestream. Platforms such as Facebook, Instagram, Pinterest, and WeChat are already offering social commerce, and plans to add social commerce have already been announced by Youtube, TikTok, and Twitter.
If you haven’t already started selling on social media, there is a good chance that your competitors already are or are planning to over the next year.
7) Chatbots & Conversational Commerce
Customers want a personalized shopping experience, yet with everything digital these days, that has become harder to achieve. Enter: Chatbots and SMS. Customers are finding ways to take mobile shopping, mobile checkouts, and mobile payments to another level, through Messenger platforms, SMS, and chatbots.
“Consumers feel about messaging with brands the same way they do about micro-influencer marketing,” notes Katie Krische, the Marketing and Partnership Manager at Octane AI. “Because they’re delivered where young and older people feel at home and because they’re one of the few remaining one-to-one methods of communicating, trust is higher and relationships can develop through engagement.”
Further, “brands have to reach their customers where their customers are. Never the other way around. The average person spends about four hours a day on their smartphones. And they’re spending them within apps like iMessage, Messenger, WhatsApp, and the DMs”, said Arri Bagah, founder of DTC Day and Conversmart.
Conversation commerce helps your brand to be “always on.” Having a personalized shopping experience for consumers builds trust and offers a more frictionless buying experience.
With the help of a chatbot or SMS messaging, you can route questions to the right person and always be available for your customers. As technology and chatbots improve, we will see more consumers using these methods to communicate and connect with brands for their shopping experience.
As you can see, the world of ecommerce is rapidly evolving to meet new consumer preferences. Investing in the right ecommerce trends and platforms will allow you to adapt to these fast-changing consumer needs.
Photo credit: Mackenzie Freemire
