E-Commerce Trends and Opportunities for 2022
The future has potential
It is no longer possible to simply be in the online marketplace with your branded e-commerce offering, regardless of whether you are B2B or B2C. There has now become a need to differentiate your business from others, and thus not just be data driven, but be data enabled, with access to and use of your data in real time to make effective use of it.
The complexity of data is increasing, and the executive team expect more from their data teams in assisting all aspects of the business from operations, marketing, to sales. As companies start to see real-world impact from machine learning models, large-scale A/B tests, predictions, and personalization, it teaches them that data can be directly utilized and shown to be an effective asset across the organization.
Data is the secret recipe, the sizzle, that special something. Using it properly is how you can compete and potentially win, especially in e-commerce. This year’s e-commerce trends can be categorized into two primary areas of focus: business trends and societal trends. We will take a closer look at both.
Business trends are all about the customer, their expectations, experience, and journey. These trends are the priority for any online business and will often require stepping up your level of working with data – becoming data enabled not just data driven.
Customizing your website, enhancing the user experience (UX), and site tuning, to offer an improved online (retail) experience will reap significant rewards. Constantly reviewing your reports and statistics through the utilization of data analytics will often contribute towards new ideas.
One of the most important things to do first that enables your ability to harness the following trends is the creation of single customer profile (or 360-degree view of your customers). Harmonizing data across multiple systems and customer matching can enable the unification of customer data with the creation or identification of master customer records.
Machine learning (ML) and artificial intelligence (AI) will also play an increasingly vital role as we go forward into the future. All these data, reports and smart insights will drive better business results.
Personalization and personification
What is the definition of personalization and personification? The difference is that personalization is using the personal data of your customers to personalize the experience exactly to them, whereas personification is trying to mimic this experience for new, unknown visitors based on lookalike characteristics. We described both in detail in our recent blog post – The Importance of Customer Data for Personalization and Personification.
Personalization will start to go beyond just making a purchase to making a bond with customers. We describe the personalization scenarios for different sizes of businesses and use cases for e- shops in another of our recent blog post – Personalization Opportunities for E-shops.
Subscription and loyalty programs
Two of the hottest areas for businesses to focus on are subscription and loyalty programs. Gartner says that 73% of CMOs will focus on existing markets to fuel growth as this is low risk strategy. And according to Forrester, spending on loyalty and retention marketing will increase by 30% in 2021. Forrester emphasize that this needs to be done by putting “the customer at the center of everything you do: leadership, strategy, and operations.”
Customer loyalty can be boosted through data insights from mapping the customer journey, customer matching and segmentation, and improving the customer experience resulting in increased customer lifetime value (CLTV). But most of all, loyalty programs are easily improved and marketed when utilizing good, quality data, and the analysis of it thereof.
Omnichannel customer experience
What is omnichannel versus multichannel? Multichannel is selling your product or services on different channels such as online plus traditional bricks and mortar stores. Your interaction with the customer is through multiple, separate channels such as physical stores, telephone, email, online chat, social media.
Omnichannel starts with the multichannel approach, in fact it can’t exist without multichannel in the first place, but the big difference is that omnichannel joins everything together. Your customer will have a seamless experience across all channels.
An example is that your customer may buy something in a physical store and want to return it, they make initial contact via telephone, continue communication via email, and ultimately return the product via an online returns’ platform. This becomes smooth and painless when your systems and data are interconnected.
Again, single customer view is vital to achieve this seamless experience and minimize the friction. An omnichannel strategy is fast becoming the norm but requires unified data and processes including analytics, marketing, sales, and customer service. If your business does get these solutions correct, it will generate more sales, increase revenues, and improve customer loyalty.
Why not check out our latest whitepaper How to Boost E-commerce Success with Customer Analytics?
Customer journey optimization
To personalize the customer experience and remove any disruptions in the customer journey, mapping of the customer journey is vital, by making a list of when and how customers engage with the brand. Customer’s social media behavior and life events can give significant advantage to win the customer over the competition.
The online digital marketplace can be a fickle arena with customers leaving for competitors at the click of a button, so e-commerce sellers need to fight for customer retention. Data analysis can map a customer’s journey identifying reasons why customers are leaving and pinpointing any friction during their time spent with you and your brand.
But to achieve this, appropriate data preparation and integration to create master customer records, followed by data stewardship excellence is needed. However, by doing this it will permit your business to take advantage of having a 360-degree view of your customers and enable you to make important decisions regarding customer journey optimization strategies.
Gartner states “70% of customer experience (CX) leaders struggle to design projects that increase customer loyalty and achieve results” so it is important to get this right.
Conversion Rate Optimization
This challenge is always a particularly sticky one to deal with but it’s all about converting shoppers into paying customers. Based on data from 41 different studies, the average cart abandonment rate is just under 70%. That means roughly seven out of every ten shoppers will not complete their transaction – a number many e-commerce store owners will find very troubling. Hubspot found that only a paltry “17% of marketers use landing page A/B tests to improve conversion rates”.
The fundamentals of conversion rate optimization are the data, the right tools, the right people, and proper testing methods, such as A/B testing, all of which will help with conversion rate optimization.
Proper analysis of your data and recommendations using machine learning to ensure precisely targeted offers will result in increased customer satisfaction with the buying process. And such customer experience ultimately brings more upsells and cross-sells resulting in higher revenues.
To learn and obtain the best practices for conversion rate optimization it might require help from a services company with dedicated consultants that have much experience in this area e.g., Simplity.
Diverse payment methods / digital wallet support
An emerging trend is to offer more diverse and alternative types of payment methods for your customers over the traditional credit card and PayPal offerings. Digital wallets such as Cash App, Google Wallet, Android Pay, Samsung Pay, Venmo, Alipay, and Apple Pay are all potential online payment methods. Offering diverse payment methods can help boost sales and increase conversion rates.
A recent independent study found that only 16% of small businesses offer more than three payment types and small businesses that accept four or more payment options bring in 7x more annual revenue than those that accept fewer than four payment options.
Remember to publish a list of payment methods accepted during the checkout process, in your terms and conditions, and help/support/FAQ pages. And also remember to be careful about laws around promotion of and charging fees to accept certain payments over others, especially for cross border and international transactions.
Societal trends are driven by changes in society, the whims of customers, and innovative technologies. These should always be on your radar, but careful consideration is needed depending on your brand, marketplace, budget, and stakeholder attitudes. Privacy and security are paramount and should be considered from the start, not as an afterthought. In many locations, such as the European Union (EU), and sectors, such as finance/banking, there are very specific rules, regulations, and laws all of which should fall under your data governance policy.
Mobile shopping and social media (as a sales channel)
Life is moving at an ever-quicker pace and the speed of the purchase could be a significant factor in a customer’s experience and decision to buy. The ability for your customer to purchase quickly and simply on their mobile device or directly through social media channels is key - Instagram and Facebook already have shoppable post types that allows a customer to buy with a single click. All this ties in with the omnichannel customer experience mentioned in the business trends section above, but it does require significant data intelligence commitments. Statista recently reported that “only 12 percent of e-commerce companies planned to introduce direct sales through social media platforms in 2021” so this is a huge opportunity to get ahead of the competition.
With concern over climate change, carbon emissions, environmental sustainability, and an increasing desire in customers for supporting eco-friendly businesses, local producers and suppliers, a key business generator would be to introduce corporate social responsibility (CSR) and follow a green commerce strategy. With proper data and planning it might even be possible to save money but most likely it will be a cost factor. Nonetheless, being able to market your green credentials will send a very powerful message to a particular customer segment which sees rapid growth and could ultimately help offset some or all of those costs. It may well be worth it considering Hubspot reported that “customers are around four times more loyal to eco-friendly businesses”.
Deliveries and returns
Flexible delivery options and smooth returns processes have now become a differentiator in any e-commerce market. COVID19 created a significant rise in working, shopping, and eating from home with requirements for socially distanced shopping, delivery, and even, in some cases, no contact curbside pickup/drop-off. The simplification of all these customer services along with the diversity of such offerings will improve the customer experience, gain their loyalty, and increase return on investment (ROI).
Finally, there is always something new just around the corner. Being able to have your business with not just its finger on the pulse of up-and-coming technologies but starting to take advantage of them might just give your business that edge in a crowded marketplace. So, what does the future hold for e-commerce? We singled out three specific areas of importance that might just make all the difference:
Voice shopping, voice search optimization (VSO), and voice verification – many electronic devices that a consumer now owns will often be voice enabled, such as with voice assistants Alexa or Siri. In America alone, Hubspot reported “24% of Americans 18 and older own a Smart Speaker, or around 60 million people”. The ability to search, shop, and obtain customer services via voice command is an attractive proposition for many customers. Apart from the need for clear and concise descriptions, metadata and personalization will play important roles with your data if you are to offer these facilities.
Improved Chatbots – chatbots have been around for some years but because of that the simple presence of a chatbot is no longer a differentiator. The quality of the artificial intelligence (AI) and its ability to be personalized and interconnect with multiple data systems is more important
Embracing augmented reality (AR) – the fact that your physical store may be closed due to COVID, or the number of customers limited, or the customer is simply shopping from home because they have become used to it, perhaps the future of shopping is AR? It is surely going to transform the way customers try, buy, and use your products. Getting your data ready for this next big leap might just be what you need to do.
How to become data enabled rather than just data driven
There are many opportunities to become so much better at e-commerce, but the driving force will be becoming data enabled and not just data driven. Data is already important, but being able to manage and govern it properly, connect it all together, make sure the data is of a quality needed, and utilizing the data properly, in real time, once you have it, has to become the primary focus.
Simplity has a deep understanding of the requirements for analysis, consulting, architecture blueprints, designs, development, testing, DevOps, and much more. During the last twelve years we have developed many methods that can improve every step of data project delivery and advanced analytics of customer data, pairing these with organizations through business consultations. And with this comes our understanding of the needs and requirements for a data enabled business along with the changing trends and focus areas each year.
Feel free to get in touch with our business consultants to discuss the challenges of your e-shop.