Mar 4, 2022

7 eCommerce Trends to Watch This Year

Image courtesy of Pexels.

Over the last couple of years, the eCommerce environment has been changing drastically. As more consumers opt to purchase online rather than venture out to the store, it’s an ever-changing environment that companies have to adjust to.

For companies to stay competitive in the eCommerce space, they need to stay ahead of the changing trends and make the most out of the way they connect with their customers and invest in the future of their business.

In this article, we’ll take a closer look at seven eCommerce trends you’ll want to watch this year.

Here’s a quick look at the trends we’ll cover:

Companies will pull back from third-party retailers
More companies will move towards opening physical stores
Mall leasing strategies will evolve to attract DTC companies
Data privacy efforts will impact advertising
Customer acquisition costs will continue to rise
Mobile payments will become more prominent
Enterprise retailers will own their supply chains

Each of these trends will play an important role for businesses selling directly to consumers, shaping the future of mall space, and more.

1. Companies Will Pull Back From Third-Party Retailers

One of the biggest trends to watch this year is retailers pulling back from third-party retailers. This allows them to make more strategic decisions about what third-party retailers can carry their products to manage inventory better and merchandising at those locations.

It also opens the opportunity for brands to start marketing and selling directly to their consumers (DTC). Taking this approach strengthens margins and helps businesses take more control of how and where their products are sold.

A number of brands are shifting their selling strategy, striving to improve relationships with key third-party retailers, and focusing on DTC sales.

Nike is one of the most well-known brands taking this route. They have recently closed accounts with a number of well-known third-party retailers such as DSW, Urban Outfitters, Dunham’s Sports, and Macy’s, to name a few.

Nike is a prime example of a brand that is starting to pull away from the traditional third-party retailer experience. They are tightening up the reins on what retailers can sell their products and are moving towards a more direct-to-consumer approach. Image courtesy of Statista.

The moves that Nike is making today are paving the way for other brands considering pulling back from their third-party retailers – and it’s a trend that you can expect to grow in the coming years.

More brands will soon see the benefits of focusing on their DTC strategy and choosing to only work with a few strategic third-party retailers. Better inventory management to increase margins is a smart decision for any DTC business.

This is definitely a trend you can expect to see more of in the coming years and one that you can adopt as part of your own strategy.

2. More Companies Will Move Towards Opening Physical Stores

Although it may seem like malls and shopping in physical stores are a thing of the past, many brands that sell DTC are starting to fill those empty storefronts.

DTC businesses will start to see the value in having physical storefronts for their customers to engage with. For these companies, it’s all about providing their customers with an excellent experience that helps to create a more personalization in each interaction. Image courtesy of Pexels.

There are a few key reasons why DTC brands are starting to adopt in-person experiences and opening storefronts, including:

Combating rising customer acquisition costs in the digital space
Creating opportunities to improve the shopping experience through customer engagement and immersive experiences
Strengthening the brand image by allowing customers to interact with the brand and products
Building a community and connecting with customers on a more personalized level

DTC companies recognize that the in-store experience needs to be more about customer service and providing customers with a one-of-a-kind shopping experience. As they continue to adopt a physical presence, they will make malls more relevant and change the way they service their customers.

In the coming years, malls will function as operating systems that provide leasing retailers with added tools and benefits for partnering with them. Many malls may adopt a connected mall strategy that will include inventory tracking, a third-party marketplace, a pattern for last-mile delivery, and a commercial real estate acquisition partner.

With a connected mall strategy, it won’t be uncommon for malls to own multiple buildings and facilities across a geographical area to help service leasing retailers beyond their physical stores in one mall location.

3. Mall Leasing Strategies Will Evolve to Attract DTC Companies

Not only will malls move towards a connected mall strategy, but they will also start to evolve their learning strategies. This will be primarily driven by the need for more functional warehousing and return space.

As online purchasing continues to grow, DTC companies will start to look for ways to improve warehousing and returns. Luckily, malls already have the space open and are looking for new ways to attract businesses into their spaces. Malls could become the perfect place for DTC companies by shifting their leasing strategies. Image courtesy of Pexels.

People who shop online are much more likely to make a return. When you consider that 20% of online purchases are returned compared to just 9% of purchases made in a store, it’s a significant shift that companies need to account for.

As online shopping becomes more prominent, DTC companies will need to find a way to manage returns in a more effective manner – and malls are here to help.

Malls will start to see the value in turning their open storefronts into functional spaces that can act as warehousing facilities and places consumers can go to return products they purchased online.

This will allow DTC companies to make returns of online purchases easier for the customer and give them the space they need to manage their products and warehousing needs.

4. Data Privacy Efforts Will Impact Advertising

In 2021, Apple announced and implemented new data privacy updates that will have a lasting impact on the way companies advertise.

Apple is giving consumers more control over the data they share with the brands they interact with. This presents a challenge for companies because the advertising avenues they were using no longer have access to endless amounts of customer data, creating less effective and personalized experiences. Image courtesy of Apple.

These updates give consumers more power to control what data is collected and how it’s used. It is a great advancement for consumers, but it has presented challenges for companies that leverage certain ad networks to reach audiences with relevant messages.

Enhanced data privacy efforts won’t stop with Apple. Google has announced plans to implement similar changes for Android users, which would put even more strain on companies that rely on digital advertising.

It will be an important time to keep an eye on how Apple ad products will play a role in this changing environment. Meta and Google once ruled the digital advertising space, but as data privacy shifts, it’s opening the door for Apple to step in and claim its share.

As many brands find it hard to adjust to these changes, they will soon start to adopt the idea of collecting and using first-party data to provide relevant advertising experiences for their customers. By using current customer data and working to collect more robust insights, first-party data will allow companies to cut out the outside vendors and advertise directly to their customers.

5. Customer Acquisition Costs Will Continue to Rise

As the advertising space has begun to shift, it has caused customer acquisition costs (CAC) to also rise. This is a result of the new data privacy initiatives that Apple has recently released but is also being driven by increased competition in the ad networks.

The amount of money companies are sending on customer acquisition has increased drastically in the last few years. This can be tied to a rise in competition in the market but is also a result of how data privacy efforts have affected the cost of digital advertising to reach new audiences. Image courtesy of Profitwell.

Retailers are being forced to find alternative ways to advertise and reach new audiences more cost-effectively. For some brands tapping into first-party data is proving to be an effective advertising tool, while others are taking another route and moving towards requiring subscriptions.

No matter what route a company decides to take, there are a few things that companies can do to attract new customers in this time of uncertainty, including:

Narrow down targeting methods
Provide personalized experience to help retain existing customers
Take advantage of organic search
Build a brand identify with content marketing

While this will likely continue to be a challenge for companies in the near future, they will eventually start to identify new advertising opportunities to drive down their CAC.

6. Mobile Payments Will Become More Prominent

The adoption of mobile payment methods will continue to become more prominent than ever before in the next few years.

This means people will start making more payments through mobile applications such as PayPal, Apple Pay, and Samsung Pay. Many people have started to adopt the use of mobile payments during the global pandemic, and it’s only expected to continue to grow in popularity.

The current mobile payment market was valued at $1449.56 billion in 2020 and is expected to reach $5399.6 billion by 2026.

The mobile payment market is expected to grow exponentially in the next few years. More and more people will adopt the technology and find that paying for goods and services is as easy as a click of a button from their smartphones. Image courtesy of Mordor Intelligence.

Mobile payments are an eCommerce trend to watch because it has such a huge opportunity for growth and because they will become the next competition between countries in the technology space.

In its current state, the United States falls behind many other countries in mobile payment adoption, but with more efforts to drive consumers to use these payment avenues, we can expect to see that race tighten up in no time.

7. Enterprise Retailers Will Own Their Supply Chains

One of the biggest challenges that companies have faced in the last year or two boils down to problems with the supply chain. To combat this, you can expect companies to start to take matters into their own hands by pursuing fully-vertical operations.

One of the biggest problems companies face today boils down to supply chain problems. Many factors play into these issues and impact the process every step of the way. In the coming years, we can expect to see more enterprise businesses take control over their supply chain to address these concerns. Image courtesy of News for Kids.

This means they will control every aspect of their supply chain. From containers, ships, planes, and trucks, they can quickly eliminate disruptions and have more control over when and how their products make it to the shelves.

There are many benefits to creating a vertical supply chain operation, including:

No reliance on outside suppliers
Avoid supply disruptions
Lower costs
Economies of scale

Having this control allows them to avoid any unknown certainties that come with using outside suppliers and will position the company to have the products they need when they need them while lowering costs.

Staying Ahead of eCommerce Trends Will Help Your Business Thrive

The eCommerce environment is constantly changing, but staying ahead of trending topics will allow you to keep evolving your business.

Understanding how other companies are approaching their relationships with third-party retailers, taking control of their supply chains, and tapping into vacant mall space to improve the customer experience will help you stay on par with the other companies in your industry.

Finding new innovative ways to manage your inventory, save costs, and reach your customers will set you up for success in the world of eCommerce now and into the future.