Table of contents
- Ecommerce Growth Over the Past Years
- Main Takeaways from the 2021 Ecommerce Industry
- Long-Term Retention
- Ecommerce Trends to Look Out for in 2022
- Social Ecommerce
- Augmented Reality Ecommerce
- Livestream Ecommerce
- Conversational Commerce
- Food Ecommerce
- Subscription Models
- Ecommerce Future Growth
Another year has come and gone, and with it the trends of yesteryear. Ecommerce continues to dominate the global marketplace, finding new ways of circumventing modern obstacles with unique, sometimes unexpected solutions. With millions of shoppers generating $4.912 trillion dollars in 2021, it’s safe to say that the industry is growing faster than ever.
Today, eCommerce amounts to more than one fifth of all retail sales. Generation X is the greatest constituent of all online shoppers, holding down the fort while Generation Z and Alpha come into their own. Staying abreast of new changes and upcoming developments in the eCommerce world will be crucial for ongoing business success.
As we begin to shift into 2022, now is a great time to reflect on last year’s biggest trends, examine current realities, and evaluate future opportunities for growth and strategy. Although many of last year’s trends will continue into the coming months, changing business landscapes and growing consumer needs are poised to reinvent the playing field for many brands.
Ecommerce Growth Over the Past Years
Ecommerce is quickly becoming one of the biggest subsections of the GDP. More customers are shopping online than ever before, with 93.5% of the global population having purchased an item from an online source. By 2040, almost 95% of all sales are projected to come through eCommerce, with the industry growing nearly 31.7% year over year.
There has been a noticeable increase in online shopping over the past 12 months, with an estimated 2.14 billion shoppers worldwide (nearly 28% of the Earth’s current population). This trend is expected to rise almost 5% every year on a global scale. In the United States alone, 230 million shoppers generated $469.2 billion dollars in 2021.
Slowly emerging from the vice grip of the pandemic, eCommerce companies have quickly adapted to the shifting retail landscape. Heavy hitters such as Amazon attempted to enhance the eCommerce experience through grocery sales and food-based subscription programs. With more than 75% of households projected to own a smart speaker by 2025, voice search purchases are becoming more viable in the marketplace. In the meantime, companies continue to optimize their interfaces and UX, adding chatbots, headless APIs, and new ways to pay for their goods.
Main Takeaways from the 2021 Ecommerce Industry
Three major trends dominated the eCommerce industry of 2021: sustainability, fulfillment, and long-term retention.
Purpose-driven, customer-centric brands led the market in droves. In a poll conducted by Insider Intelligence, more than 44% of consumers wanted to support brands that valued social responsibility. 40% wanted brands to support ‘good’ or charitable causes, while 41% wanted brands to reduce their environmental impact. Authentically sustainable missions, packaging, and messages were prevalent across all sectors.
Fulfillment became a surprise differentiator for eCommerce businesses around the world, with 73% of consumers more likely to shop at companies offering fast shipping times at low to no cost prices. Brands scrambled to establish an edge, focusing on improved inventory management, greater productivity, and enhancements with their handling processes.
2021 also saw massive spikes in the acquisition costs of new customers, with paid social advertising prices increasing by 24%. In response, eCommerce brands turned to new fields such as voice commerce and doubled down on customer retention efforts. Loyalty programs and SMS marketing became important for companies large and small, as well as ongoing personalization campaigns.
Ecommerce Trends to Look Out for in 2022
2022 will see a lot of major changes in the eCommerce industry, notably in social eCommerce, augmented reality, live streaming, conversational commerce, food trends, and subscription models.
Social eCommerce reached new heights with greater cohesion in the marketplace, while AR and subscription trends became more widely accepted. Augmented reality was an important element of innovation, with a projected 100 million customers trying out the software in 2021. Food remains an influential element of conversational commerce, with millions getting in on the trend – and millions more to come.
Let’s take a closer look at each trend below.
Social eCommerce is a growing method of eCommerce distribution that sells products directly through social media platforms. Currently a $89.4 billion dollar market, social eCommerce can easily reach the 81% of all shoppers researching products through Facebook and Instagram. Nearly half of all internet users have made a purchase through social media in the past – making the field of social eCommerce extremely desirable for 2022.
Augmented Reality Ecommerce
Augmented reality is eCommerce’s answer to the tangibility of online stores. This technology allows shoppers to visualize the impact of a product within their own lives, integrating virtual inputs with elements of their environment, and 66% of customers are interested in using AR for their online shopping sprees. The icing on top: a 90% increase in conversion rates for businesses using AR.
The livestream eCommerce trend truly began in the Chinese market, where nearly $6 billion worth of sales were made in a single day. Showcasing online products in an interactive format has a number of benefits to omnichannel marketing, mainly in terms of awareness. For one thing, livestreams are extremely personalized. Questions can be answered almost immediately, and by an engaging host. For another, it’s extremely profitable. Livestream sales reached $11 billion in the US in 2021, and are projected to reach $25 billion by 2023.
Conversational commerce has become one of the leading drivers of online purchasing behavior in 2022. Named by Chris Messina in 2015, conversational commerce refers to the increase in sales that are linked to the increase of customer communications. Chatbots, social media, and instant messaging apps are taking the industry by storm as customers look for ways to connect with brands instantly. It’s projected that up to 80% of businesses will use chatbots by 2022, reducing customer service costs by 30% or more.
Partially thanks to COVID-19, the food ecommerce industry is bigger than ever. Customers are using subscription services such as HelloFresh, Amazon Grocery Delivery, and Misfits Market to fill their kitchens and pantries. Online food delivery already generates more than $4 billion a year, with huge potential for growth. By the end of the year, online purchases could make up 20% of all food and beverage sales.
Companies that provide products to their buyers on a predetermined basis are considered to operate on a subscription model. As mentioned previously, eCommerce subscription models are increasingly in popular demand, with more than 50% of all consumers subscribing to one. The business model also leads to a number of benefits, namely better retention rates, steady growth, and increased yearly profits.
Ecommerce Future Growth
If we know anything about the future of eCommerce, it’s that the next few years will continue to look brighter and brighter.
Current research suggests that total eCommerce revenue will reach $563.4 billion by 2023. Despite the boom experienced in 2020, year-over-year growth is projected to drop to 11.2% in 2023 – then drop again to 9% in 2025. It’s important to note that this is still growth, just at a slower pace. Counterintuitively, retail sales are expected to rise to nearly 20%, with the potential to reach 24.5% by 2025.
In terms of ecommerce trends, the figures suggest that subscription models and food eCommerce will continue to dominate the market. More digital buyers and a growing normalcy around online shopping will drive competition and brand differentiators, spiking the innovation of new technologies in the industry. Augmented reality will become more commonplace for SME businesses, while conversational and livestreamed eCommerce will continue to become mainstream.
As you prepare yourself and your business for 2022, keep yourself in the loop with the industry trends and news you need to make informed decisions. 2022 isn’t on the horizon anymore – it’s already here. What will you do to make yourself competitive?