Will new year mark a radical change in consumer behaviour?
Businesses have dealt with more change in the last two years than in the previous two decades. As a side effect, businesses have grown more resilient.
And it’s a good thing—because there’s a lot more change ahead. Changes like record-high shipping costs, diminishing returns on online advertising, and a massive increase in the number of channels businesses are selling on.
All this will affect the way people shop, sell, and ship. For that matter, Shopify is sharing every insight it has to help businesses succeed.
Saying it is more than speculation, Shopify says the report is based on in-depth analysis of exclusive survey data from businesses and consumers around the world.
“We paired this with data from millions of Shopify-powered businesses globally. The result is a trends forecast with unparalleled views into the future of commerce.
“We’re shining a flashlight into 2022, and we’re ready to show you the way,” it says.
Spending habits are shifting
A radical change in consumer behavior is noted. People are more willing than ever to buy from brands that resonate with them because of geography, company values, or sustainability.
According to the Shopify eCommerce Market Credibility Study, a commissioned survey conducted by Forrester Consulting on behalf of Shopify, September 2021, 47% of the consumers says having a local presence was a significant factor for which brands they shop from.
Consumers are 4x more likely to purchase from a company with strong brand values. And a whopping 77% are concerned about the environmental impact of the products they buy.
They’re willing to spend more money and accept slower shipping times—for the right brand. They’re also returning to in-person shopping, and shopping in new ways: social commerce sales are set to nearly triple by 2025, and 40% of consumers say they plan to pay with cryptocurrency in the next year.
“Businesses that not only own their customers and know who they are, but are speaking to them and listening to them, will have a definite advantage going forward,” says Robert Befumo Head of Ecommerce Strategy and Marketing, Parkfield Commerce.
Caution: obstacles ahead
What got you where you are won’t get you where you’re going.
There’s no sense sugarcoating it: Our retail woes aren’t over. “Shortage” is a word that will define the coming year. Supply chains, resources, and access to staff will remain constricted for businesses while consumer demand keeps going up.
Know what else is going up? Shipping and acquisition costs. The average cost of a shipping container is now over $10,000, four times higher than a year ago.
And as third-party cookies phase out and advertising conversion rates continue to plummet, 80% of marketers will likely abandon personalization efforts by 2025.
Hiring and retaining employees will continue to be a top challenge for businesses in North America, and Europe. Retail workers will need to become far more versatile, helping with things like virtual shopping, appointment shopping, click and collect, and local delivery. These obstacles and others are chronicled in our report so you can prepare for the road ahead.
Look at obstacles as opportunities
Differentiate and diversify: These are your two keys to succeed in 2022. This is the year of competing not on price, but on brand proposition. People want to buy from brands that stand for something, brands that align with their personal beliefs.
According to the survey, fifty-two percent of global shoppers are more likely to purchase from a company with shared values. Given this, brands should focus on customer retention and lifetime value, especially as advertising costs and uncertainty continue to climb.
Prepare to invest more in your customer experience, and build a community that keeps customers coming back.
“As the world has moved online and as commerce has had its second renaissance, the side effect is that customer acquisition costs have risen to enormous levels. The clear solution for brands is to increase their repeat rates and increase customer lifetime value,” says Carl Rivera VP of Shop, Shopify.
Don’t forget about the magic of in-person experiences: in-store shopping is ramping up again. But it’s not about one or the other—consumers want it all. These days, commerce is omnichannel.
The best brands understand that digital and physical retail don’t operate as silos. It’s all just retail. Your customers want to be able to order online but return in-store, or look at a product in a showroom and buy it online.
Over the next year, 54% of the consumers the company surveyed say they’re likely to look at a product online and buy in-store, and 53% are likely to look at a product in-store and buy online.
“Future-proof yourself further by building diverse business relationships across your supply chain, shipping, and fulfillment networks. And give yourself a Plan B, C, and D to build resilience in your supply chains. Most importantly, make sure you can deliver on your promises to your customers,” says Shopify.
According to our survey, 66% of them are already aware of supply chain delays, and they’re looking for transparency. Forty-five percent of shoppers are actively looking to shop from businesses that clearly show anticipated delivery times.
Perhaps the largest opportunity ahead is to differentiate yourself with sustainable business practices. In the past year, nearly half of customers chose to buy from brands that have a clear commitment to sustainability. Studies have shown a 71% rise in online searches for “sustainable goods” globally since 2016.
“It could be said that if you don’t go green, you’ll go red—so seize the chance to build a sustainable business.”
This article is taken from “The Future of Commerce in 2022” – “Your roadmap to the future of commerce.”