The Future State of eCommerce: 2022 Predictions

Perhaps the most important (and most jolting) news to emerge this year was the announcement of privacy changes from Apple and the depreciation of the cookie from Google. Apple’s move to tighten privacy protections has brought about stricter limitations on targeted ads, data sharing, and reporting capabilities for app users.

Across the industry, marketers have expressed concern over the subsequent heightened acquisition costs. Over 55% of digital marketers believe the changes will lead to less personalized consumer experiences, and 50% of digital marketers say privacy concerns will persist even after cookies go away. Over 29% of companies have lowered their social media advertising spend as a result. 

How will brands pivot to continue to drive growth in sustainable ways amongst these changes?

In 2022, eCommerce brands will come to view data as a value exchange.

In return for first and zero-party data, brands will work to create exceptional experiences beyond their product offering through strategies like superior customer service, loyalty rewards, personalized recommendations, advanced access, and more.

To better collect first-party data, eCommerce brands can look to several strategies, according to Gavin Flood, Senior Director, International Marketing at AdRoll, including selling experiences that ask for customer input, direct contact such as email and text, and post-purchase experiences, like reviews. “The best thing marketers can do is diversify with new strategies now so that the change is easily managed,” says Flood.

“Rather than trying to spend more on ads to acquire fewer customers, brands that invest in authentic ways for customers to engage with them will see dividends in loyalty, community and, ultimately, word of mouth — which in turn will generate higher value customers over time,” says Michelle Horowitz, Senior Vice President and Head of Marketing and Communications for Blink Fitness and a Yotpo Advisory Board member.

According to a Yotpo survey, 44% of brands already believe that first-party data received directly from customers is more valuable than data from cookies. “In some ways, the answer is what we’ve always known: Brands need to create value for customers that gives them a reason to organically choose you, and agree to share their data and participate in your community,” says Rosa Hu, Vice President of Product Marketing at Yotpo. 

Over 50% of consumers plan to use a mix of in-store and online shopping channels in 2022, and more than 65% of consumers are trying different shopping behaviors and intend to incorporate those behaviors going forward. Consumers are active both online and offline; regularly they will shop on a retailer’s site while waiting in line in-store, or they’ll browse online before walking in to purchase. 

In 2022 and beyond, in order to create consistent — and highly engaging —  customer experiences at every touchpoint, brands will need to bridge the commerce gap between online and offline channels. A frictionless experience between in-store shopping and online browsing will be table stakes as consumer expectations continue to rise. 

“In 2022, omnichannel will be non-negotiable for eCommerce brands,” says Samantha Tepper, Business Operations, Assembly. “Consumers expect that brands are selling wherever and whenever they want to buy, whether that’s on Amazon, TikTok, or D2C, and they expect the experience to be consistent.”

Brands will look to create these experiences in 2022 by leveraging online & offline strategies to connect in-store and online experiences while also delivering the personalized experiences consumers crave through cross-channel first-party data collection.

Loyalty programs are the ideal tool to connect online and offline channels. Loyalty program point-of-sale integrations and customer-led redemption options, like allowing shoppers to redeem loyalty perks in store or gain points from in-store purchases or actions to be redeemed online later, enable brands to effectively collect data from engaged shoppers through both online and offline channels. Brands should also look to leverage new channels, like SMS marketing, to drive even higher engagement from their online-offline loyalty program.

Over the past few years, shopping has become an increasingly passive and constant activity. As consumers scroll through their phones between social media apps, making a purchase is now a more serendipitous action than a predetermined decision. Shoppers may simply see an ad on Instagram or an influencer’s product post on TikTok, make a purchase, then go about the rest of their day. 

This form of engagement is lucrative for brands; according to Adweek, nearly half of TikTok users have made a purchase after seeing a product or service advertised there, half of millennials said they’ve purchased something from a brand after seeing it advertised, promoted or reviewed on Instagram, and the average amount spent by a social buyer in a year will double between 2020 and 2025 according to eMarketer.

In 2022, brands will look to make the social commerce experience even easier for consumers, especially through in-app shopping. “TikTok has officially thrown its hat in the social commerce ring by recently partnering with Shopify & BigCommerce,” says Casey Murray, Director of Partnerships at Cohley. “We believe that TikTok will give brands far better return on ad spend vs. its competitors in 2022, and its in-app purchasing capabilities will have a lot to do with that.”

By enabling shoppers to easily make purchases without having to close out of the app or click through multiple screens, brands will build experiences that feel more native and in turn, drive higher conversion. 

In 2022, brands should look to incorporate more social proof into the social shopping experience, like adding reviews to their shops on Facebook and Instagram, to make products easier to discover and enable consumers to purchase more confidently. “We’ve been able to create a section of our website where you can shop Instagram from our homepage,” says Chaz Olajide, Founder, Sir Dogwood. “Now, people are not only shopping from Instagram on Instagram, but also from our website, which is great.”

Social channels help to engage brand communities and foster loyalty through high-value experiences, including sneak peeks, customer spotlight features, and exclusive events. Brands should look to leverage social channels to better understand shopper preferences and tailor content accordingly, especially in the wake of third-party data loss.

In 2022, brands will continue to grow their investment in mobile channels as a way to optimize shopping experiences for their mobile customers. However, privacy changes are driving the push toward mobile conversation via SMS in particular.

The iOS audience is a mobile audience, meaning SMS marketing is already adapted to the mobile-first, customer-first, privacy-first reality of Apple’s changes. Because of the inherent mobile usage, SMS is an ideal way for brands to continue to learn about (and effectively engage) mobile consumers as privacy policies tighten.

SMS marketing is powered by zero-party and first-party data. In 2022, brands will use SMS marketing to more easily collect information about customer behavior and purchase history, as well as gain access to data that customers share willingly and proactively through interactive SMS experiences.

“As more merchants grow their eCommerce presence, more consumers will access websites via mobile to shop,” says Zach Bailey, Lead Partner Strategist at Justuno. “There has been an increase in SMS providers that integrate with eCommerce platforms because the demand is growing quickly.”

“SMS mobile rates are not as costly to the visitor as they were in the past, so mobile users are increasing the use of SMS promotions from brands they want to hear from. Additionally, custom SMS messaging and visitor journey flows are creating improved communication for both brands and customers.”

eCommerce brands will double down on more than their investment in loyalty — they’ll double down on building the emotional connections that are foundational to retention. 

According to a Yotpo survey, consumers are more emotionally invested in their favorite brands now than they have been in the past, viewing the shopper-brand relationship as more than just a transactional exchange. Survey respondents were more likely to spend more on a brand they’re loyal to because for most consumers, it’s no longer just about the money.

“If a brand isn’t building an emotional connection through engaging and relevant content, a prospective buyer will have no problem moving onto another brand’s site and building loyalty there,” says Russell Klein, Chief Commercial Officer at BigCommerce for the Loyalty Category at BigCommerce. “I expect to see retailers focusing even more on building those emotional connections with customers in 2022.”

True brand loyalty goes beyond sending out coupons, giving away discounts, or creating points programs, says Klein. Building emotional loyalty involves forming storylines, crafting journeys, and creating more organic and deeper reasons why they would choose to deliberately spend those few extra moments with you and the experience you provide.

Brands can deliver on the value exchange required by using zero- and first-party consumer data collected in a loyalty program to deliver personalized experiences. “For example, a U.S. fashion retailer uses the information customers share in style quizzes and challenges to better understand their preferences, and then the brand sends them curated product offers based on their answers,” says Mary Pilecki, VP & Chief Analyst at Forrester. 

Smart brands will use the zero-party data they collect in a loyalty program to improve customer journeys and experiences, as well as generate positive customer emotions that ultimately drive purchase behavior.

Influencers are now marketers’ third most trusted media, and in 2022, creator-led commerce will continue to grow. According to Marketing Dive, the growing trust that marketers have in influencers could be reflected by a greater comfort to give up control of some elements of their brand messaging. In the next year, brands will look to increasingly let their customers do the talking for them — leading to increased authenticity and consumer trust as a result. 

“It’s no secret that creators are trendsetters, paving the way to influence not only their community of followers but also industries as a whole from the content they create,” says Rachael Cihlar, VP Influencer Marketing Center of Excellence at MAVRCK. “On channels like TikTok and Instagram in particular, we’ve seen the fashion, home decor, and lifestyle industries shaped by the latest videos and images creators are promoting.”

The creator economy — that of online content creation and the surrounding monetization — has seen a global explosion, with over $1.3B in funding in 2021 alone. Today, over 83% of consumers trust ‘digital word of mouth’ above content produced by brands. Social platforms are evolving to keep up with this growth with features built to enable brands to build relationships with creators to drive sales. Features like TikTok Shopping show that the platform is emphasizing sales and not merely virality, exemplified by the hashtag #TikTokMadeMeBuyIt, and TikTok Spark Ads, which enable brands to advertise directly through influencers’ accounts.

“Covergirl has seen product sales spike seemingly overnight from only two TikTok videos to the tune of 269% sales growth in one week, and brands like Abercrombie & Fitch have seen a resurgence in large part due to their creator-branded lines and social media partnerships,” says Cihlar. “If you’re on TikTok or Instagram, you’ve probably seen influencers of all backgrounds and sizes showcasing hauls and outfit inspiration in viral content.”

The magic (and efficacy) of creator-led commerce lies in its innate sense of relatability. A brand partnership with an influencer implies that the influencer trusts and respects a brand enough to collaborate publicly. The reciprocal benefits, in the eyes of consumers, lend credence to the products and services a brand provides, and it increases their willingness to allow themselves to be “influenced.”

2021 was the year that subscriptions went mainstream. In 2022, brands will focus on delivering a positive subscriber experience to differentiate themselves from their competitors, says Ralph Robertson, Chief Revenue Officer, Ordergroove. Going into the next year, subscriptions will be redefined to prioritize a more emotional strategy: membership.

“Brands are losing customers with every passing year they don’t offer subscriptions,” says Jay Myers, Co-Founder, Bold Commerce. 

Subscriptions can help add a level of predictability. The ability to anticipate increased demand in the face of supply constraints can be a competitive advantage and become a significant strength for the business.

In 2022, more brands will take subscriptions to the next level with memberships. “While a subscription is a billing decision that gives customers access to a product or a service for a period of time, a membership means being a member of a store, an organization, or a group. It’s a belonging decision,” says Myers.

“To stand out in a competitive landscape and keep shoppers happy, brands will give subscribers more control over their recurring orders, enabling a more personalized experience,” says Robertson. “Brands will differentiate their subscription offering by giving subscribers the ability to pause or skip orders, as well as swap out products. As a result, subscribers will keep their subscriptions longer, increasing their customer lifetime value. Our data shows that subscribers last 135% longer when they can skip an order and 71% longer when they can swap a product.”

By giving shoppers more control over their subscriptions, eCommerce brands also collect more crucial first-party data. Consumers buying habits, product preferences, and/or changes to subscription schedules are first-party data points that brands can use to provide more personalized experiences.

Subscriptions are yet another extension of rewards programs, says Mary Pilecki, VP & Chief Analyst at Forrester. “Subscriptions combine several loyalty tactics, including recurring revenue and brand engagement.” Much like streaming services, they also help prolong the customer life cycle. “Paying a monthly cost encourages customers to go in as often as possible.”

According to McKinsey, one out of four consumers say they are planning to focus more on environmental issues and will pay more attention to social aspects in their shopping behavior. 

In addition, 83% of consumers now prefer positive activism – showing support for companies by buying from them, rather than avoiding those whose practices they disagree with. The continuation of the pandemic in 2021 prompted customers to rethink their value alignment with the brands, products, or services they use, according to Jay An, Senior Director of Growth, ShoppingGives. “It’s never been more important to deliver a holistic view of a brand, from origin story, products, mission, social impact focus, and beyond, to align with the new generation of conscious consumers.” 

“As Millennials and Gen Z take center stage as the largest cohort of consumers, brands will have to become more aligned with what shoppers care about, and Millennial and Gen Z consumers are clear that the ecological impact of their purchases is top-of-mind,” says Jake Chatt, Head of Marketing, EcoCart. 

“Consumers today are demanding that brands do more to make a positive impact,” says An. “They’re choosing to support purpose-driven brands, even if it means switching from a brand they previously considered themselves loyal to. Today’s socially conscious consumers are taking the time to educate themselves on a brand’s social impact efforts. As a result, consumers are easily able to identify whether a brand is being authentic in their sustainability efforts.”

In 2022, eCommerce brands will leverage loyalty programs to connect shoppers with brand values. Strategic campaigns and reward structures make it easy to align with shoppers on what matters most, and they allow members to take part in active support. Brands will leverage loyalty to incentivize shoppers to learn about and participate in sustainability goals by rewarding educational actions — customers can read blog posts about the brand mission or watch sustainability-focused videos — as well as customer action, like donating, recycling, or participating in a beach clean-up.

With growing acquisition costs, leveraging a third-party marketplace gives a brand more exposure, more leads, and for smaller brands, better trust and authority through an association with a known company like Google, Walmart, or Meta.

In 2022, brands will leverage third-party selling on eCommerce marketplaces to extend reach and drive results — more than 60% of all product searches start on third-party retail platforms. 

“As customer acquisition costs surge for online-only businesses, brands from Caraway cookware to Jinx pet food are turning to chains like Target to drive sales,” according to the U.S. Chamber of Commerce. Brands that sell on eCommerce retail platforms will have an enormous opportunity to boost brand awareness, customer acquisition, and revenue in 2022.

In order to get the most out of selling on third-party retail channels, brands in 2022 will look to bolster their product listing as much as possible with social proof, especially reviews. By implementing product reviews and ratings on their lists on eCommerce marketplaces like Google Shopping (brands that add reviews to their Google Shopping Ads see up to a 24% increase in CTR!), Walmart Marketplace, and shops on Facebook and Instagram, brands will drive higher conversion at these low-cost touchpoints.

Marketers are already busy — in 2022, there will be no sign of slowing down. Between new channels, updated acquisition tactics, a deeper focus on retention, and all of the campaigns to drive these goals, next year is likely to be a busy, but fulfilling, year. 

“Now more than ever, brands are focused on delivering the best possible shopper experience,” says Rich Stendardo, CEO, YOTTAA. “This focus often leads to a more complex tech stack: adding heavy third-party technologies, utilizing a combination of commerce platform plus headless services, DIY platform augmentations, developing single page apps, using page templates on other sections, and more. The cost of this expansion is drag on site speed”

In 2022, marketers will look to make their operations more efficient, and that starts with consolidating and optimizing their tech stack. Rather than look to point solutions for every new technology, marketers will focus their efforts on ensuring their most effective tech solutions integrate seamlessly with each other. 

According to a recent Hubspot survey, 82% of marketers are losing hours a week due to managing different technologies, 75% of marketers spend up to an hour a day analyzing data and connecting reports from different marketing tools, and a majority of respondents report 1-5 of the tools they use have redundant capabilities. And, nearly 60% of marketing teams spend up to 10% of their budget to integrate, maintain, and manage their various tools. 

“A bad experience is a disruption in a shoppers’ day,” says Theresa Reed, VP of Sales and Partnerships, BVA. “And it’s caused by disconnected data that’s siloed in point solutions.”

While point solutions are helpful on their own, they often don’t take into account a brand’s growth — and they take focus away from the bottom line. In 2022, brands will invest in eCommerce marketing platforms, to better enable growth from the get-go. A platform can provide all the marketing solutions your brand needs currently, as well as the solutions you’ll likely need in the future, all from one single source, with integrated data and synergies between them. 

“As more brands grow to new scales, they will centralize their tech stack around best in class tools that provide holistic customer data that’s easily actionable,” says Jeremy Horowitz, Director of Marketing, Daasity. “Brands will consolidate functionality around those core tools that provide the most access to customer data to power more automations and unlock new sales opportunities.”

“CDPs are the secret weapon for personalization and growth,” says Brian Walker, Chief Strategy Officer at Bloomreach. Whether it’s a CDP or a platform, access to consolidated data enables brands to leverage a single source of truth for holistic customer data. That means data points collected via reviews (sentiment), data collected via  loyalty program (behavior), data collected via SMS marketing (engagement), and more, are all integrated to provide one comprehensive view of a customer.

All of this data in one place enables brands to bypass third-party data limitations; with a platform, brands can leverage cross-product data to optimize more integrated information and build more personalized campaigns. 

To learn more about how Yotpo can optimize your eCommerce marketing through our solutions for SMS marketing, loyalty & referrals, reviews & ratings, and visual user-generated content, request a demo.