While Stephen Hawking once said that we “can’t predict the weather more than a few days in advance,” tracing directional trends has always been a fascination of mankind and a necessity of commerce.
Following a whirlwind year—where anything seemed possible at any moment—we’ve compiled a list of 7 e-commerce trends that we're keeping an eye on throughout 2022. From futurism to the influence of Millennials and Gen Z, the future of e-commerce is both technological and personal, universal and generational. Here’s what we’re looking out for in the upcoming year.
1. E-Commerce Will Continue to Climb
With the onset of the COVID-19 pandemic, e-commerce saw an incredible jump in sales in 2021. While consumers have been slowly migrating their purchases over from brick and mortar for years, the COVID-19 pandemic has been cited as an accelerator of this emerging trend, nudging individuals to expand the type of products they were willing to purchase online. As more and more individuals become accustomed to online shopping, and as the pandemic continues to drag on, forecasters are predicting e-commerce to reach 23% of total retail sales by 2025, compared to just 11% in 2019.
2. Loyalty and Subscription-Based Purchasing
With the growing cost of advertising, PPC spend, and increased competition in the e-commerce space, the amount spent by online retailers to secure new customers continues to increase. With a majority of online customers purchasing once—and never again—retailers are devoting more time to retaining customers. While various strategies have been employed to cultivate loyalty, subscription-based purchasing models is one trend we expect to see grow in 2022, as retailers increasingly turn to consumer memberships as a means to transform one time customers into recurring and stable patrons.
3. Renewed Attention to Packaging
While the old adage goes that one should never judge a book by its cover, 72% of consumers admit that packaging influences their buying choices. Retailers have been quick to jump on this trend, paying greater attention to packaging detail relating to design, sustainability, and safety. Specifically, a report conducted by Ipsos found that young adults between the ages of 18 and 34 paid the most attention to packaging. Furthermore, 70% of women, compared to 65% of men, expressed preference for specific packaging materials over others. As attention branding and design continues to ascend, we expect greater investment in this area to increase in turn.
4. All About Millennials and Gen Z
As Millennials and Generation Z slowly, but surely, increase their purchasing power, online retailers are crafting new ways to cater to the next generation. Strategies to capture the loyalty of young adults have taken various forms, such as increased advertising across social media platforms including Instagram and Tik Tok, which have been wildly successful in boosting sales. One study concluded that at least two-thirds of individuals use social media as part of their shopping strategy—breaking down to 77% of Millennials and Gen Z, compared to 23% of Boomers.
A second successful strategy targeting the next generation has been ‘buy now pay later models,’ which include notable platforms such as Affirm or Afterpay. Despite recent controversies surrounding installment models of payment (younger generations purchasing items outside of their price range; being faced with mounting penalty fees for missing installments) predictions, such as a recent forecast by Bank of America, expect installment models of payment to process upwards of $1 trillion by 2025.
5. Artificial Intelligence and Virtual Reality
While humanity has been lucky enough to avoid the Matrix thus far, retail can’t ignore the growing seduction of artificial intelligence and virtual reality forever. One surprising trend within this category has been the rise of voice-purchasing through apps such as Apple’s Siri and Amazon’s Alexa. In fact, 35% of Americans expressed using a virtual assistant every day, and 39% of individuals noted how they were “very” likely to use their virtual assistant to shop.
A second trend can be seen in the increased investment retailers have poured into AI, with one such example being the growing presence of chat functions present on e-commerce websites. Thirdly, greater attention has been paid to virtual reality, with new technologies allowing shoppers to see items rendered in 3D. This provides consumers the opportunity to upload images of themselves to understand how products such as clothing or accessories would look as ‘worn’ by them, or view how design and home goods would fit into their living rooms through visually and spatially rendered models.
Striking a balance with the cold futurism of AI and VR, retailers have simultaneously increased efforts to customize the shopping experience through increased personalization efforts. While traditional retailers have gotten more savvy at crafting custom emails and advertisements suggesting products they believe the target individual might like, retailers have continued to invest greater amounts in catering to specific individuals through personalized promotions for birthdays, membership portals, “top picks,” and custom promotions. This level of personalization has extended to consumer products themselves, such as new lines of hair or skin care, whose formulas have been specifically crafted for each customer, and complete with personalized and monogrammed packaging.
7,. Discovery and Education
While you might not browse Amazon to learn about politics, history, or science, an increasing number of consumers rely on major retailers as sources of information and discovery. Much more than a marketplace alone, buyers often utilize retail search engines to gain greater insight into products, brands, trends, commerce, and pricing. Amazon’s features such as Comparison Shopping and Amazon Customer Service Price Matching showcase examples of retailers taking increased consumer awareness into their overall targeting strategies, a trend which is likely to increase.