Branding

Shopify’s ‘The Future of Commerce Trends’ Briefing

How can brands combat rising acquisition costs? What omnichannel approach will see businesses through the pandemic? Is there a way to balance ongoing supply chain woes with long-term sustainability?

 

The Future of Commerce brings together expert interviews, data analysis, and a global business and consumer survey to reveal what the past two years have taught us about commerce, retail, shipping and logistics—and what’s to come next. 

 

Shopify published their Future of Commerce report and in this blog we cover the key statistics, three key trends and useful recommendations for brands. Read more to discover the trends shaping the year ahead and get practical tips on how to put each trend into action!

TREND 1 - The only constant in commerce is change

One thing that stands out in the report is that the only constant thing in commerce is change. Oh how we can relate to that here at Cake!

 

Due to the pandemic, businesses have had to deal with more change in the last two years than in the previous two decades. Some of these changes are:

 

  • Record high shipping costs
  • Diminishing return on online advertising
  • A massive increase in the number of channels merchants are advertising on

 

All is not lost! There is some good news. More and more consumers are willing to pay higher prices and wait longer for delivery if they resonate with the brand…

Stats you need to know:

  • Consumers are 4x more willing to buy from a company with strong brand values
  • 77% are concerned about the environmental impact of the products they buy
  • Social commerce sales are to nearly triple by 2025
  • 40% of consumers say they plan to purchase using cryptocurrency in the next year

Rising acquisition costs force brands to foster long-term relationships with their customers

2022 is the year of brand proposition. It’s about the experience. There, we said it.

 

Shopify also reiterate this in their report, stating that what got brands where they are over the past two years, will not get them where they want to go. Due to advertising uncertainty, brands need to focus on the customer experience to create a meaningful community and increase retention. 

 

Due to Covid restrictions beginning to ease, more people are returning to in-store shopping and want the online and in-person experience to be aligned, so brands can no longer look at the two as working in silo. Customers want to be able to buy online but return in store, or view a product in store and then buy online later.

Stats you need to know:

  • 54% of consumers say they’re likely to look at a product online and buy in store
  • 53% are likely to look at a product in-store and buy online
  • 66% of consumers are aware of supply chain delays and they’re looking for transparency
  • 45% of shoppers are actively looking to shop from businesses that clearly show anticipated delivery times
  • Studies have shown a 71% rise in online searches for “sustainable goods” globally since 2016

“The brands that speak to everyone speak to no one. Whether brand differentiation means what the brand stands for, the way the product is made, or the way they engage their audience, consumers are looking for differentiated experiences and brands they can connect to.”

Morgan Brown

VP Growth Marketing, Shopify

Investing in your brand

Brands who want immediate measurable results tend to undervalue the importance of their brand strategy and prioritise marketing, as it’s a longer term investment. 

 

70% of marketers cutting their budgets will sacrifice brand, while only 13% will reduce performance marketing spend. Conversion rates are important but it’s not the whole picture. Google reports that more than 80% of consumers will conduct their research online before making a purchase decision, so when they come to purchase they already have a brand in mind. Due to this, businesses need a strong brand to earn their place in a consumer’s mind.

Key recommendations for eCommerce brands

Develop a brand measurement technology:

 

  1. Run brand campaigns for at least 6 months and build a measurement framework with performance indicators that align with brand goals
  2. Gather data through consumer surveys
  3. Record changes across organic channels, mentions, engagement etc. after running a brand campaign

 

Invest in both short-term performance marketing and long-term brand building:

 

  1. Use both performance and brand marketing to create lifelong customers
  2. Tailor the split of investment based on industry, but usually around 60/40 
  3. This is a long term investment but done right, you will see the investment back from performance marketing

 

Diversify your advertising and sales channels to lower the cost of acquisition:

 

  1. Explore new channels and look at trends; for instance, global shipments of smart speakers and displays increased by 35% over 2021, what does this mean for advertising? 
  2. Look into niche channels with high engagement
  3. Invest time in your high ROI channels such as organic social and email
  4. Expand your business to marketplaces and lay out a strategy of how to acquire in marketplaces but retain your store

 

Highlight your unique difference and values at every customer touch point:

 

  1. Revisit your brand story and ask, what are your points of difference?
  2. Showcase your brand values to customers all throughout the business, from the CEO to the customer representatives; e.g. Patagonia encourages consumers to buy and sell used items through their ‘Worn Wear’ programme but also has a programme for employees to encourage them to reduce emissions on their commute through rewarding them
  3. Treat your employees as a target audience for your brand

TREND 2 - Death of third-party cookies forces brands to re-think personalisation

Even as regulations make data tracking harder, consumers continue to demand personalised shopping experiences…

There is such a thing as over personalisation

Consumers are more aware than ever before of their privacy and are exercising their right to have privacy, meaning trust is harder to earn. Regulators and technology providers are making it easier for consumers to have a say in how their data is being used, meaning third party cookies will no longer cut it. Brands are moving to first party data to personalise experiences and drive their marketing efforts, but consumers are 3x more likely to abandon carts if they feel there is ‘over-personalisation’ as it feels as though they are being digitally stalked.

Stats you need to know:

  • 42% of brands plan to offer their customers personalised product recommendations through tools like quizzes, custom mobile apps, and first party or third-party behavioural data  
  • 44% of consumers say they’re OK with brands they like using their personal information to deliver relevant content and offers
  • 85% of brands believe they’re offering personalised experiences, while only 60% of consumers seem to agree
  • 44% of brands already plan to be more transparent around how they use customer information

Key recommendations for eCommerce brands

Generate customer loyalty and data through community:

 

  1. Customer loyalty and community is a no brainer, it increases retention whilst decreasing costs
  2. Invest in the right team to help your community grow as it takes a lot of time and resources to build a strong community 
  3. Ensure your social media and general communication is in line with your overall marketing strategy

 

Find ways to tie your community back to business results:

 

  1. Set KPIs which are specific to measuring the effectiveness of your community such as lead generation, AOV, customer lifetime value etc. 
  2. Use your first party data to drive your brand and marketing strategy and feedback to team members so everyone is aligned

 

Give members a clear reason to keep coming back:

 

  1. Define your community purpose upfront and how it will benefit the brand and the members
  2. Be intentional about your brands rituals and traditions, e.g. Lego encourages brand advocates through their community who share images of what they are working on
  3. Create a feeling of exclusivity through member only content or access 
  4. Offer loyal customers a piece of your brand, NFT’s are allowing brands to do this, but it could even be through limited ranges

TREND 3 - New commercial opportunities emerge on the biggest social platforms

Sales through social media channels around the world are expected to nearly triple by 2025 – yikes!

Social commerce is on the rise

After more than a year of people working from home, users are spending more time than ever scrolling through feeds on social platforms, with the typical user now spending around 15% of their waking life on social media. Crazy thought, eh?

 

The emergence and continual growth of social commerce is a great opportunity for brands to take back control of their identity on digital channels which has been reduced due to the increase in marketplace purchases which tend to suppress brand identity. 

 

As consumers buy more on these platforms, they will become more ‘shoppable’, but this doesn’t mean spending more on ads as this doesn’t build trust.

Two tactics: live chat & video

Live chat

 

  • 58% of shoppers say an excellent past customer service experience is a driving factor to influence their purchase decision
  • 54% of shoppers say the ability to easily reach customer service in the channel of their choice is important to them
  • 43% of consumers surveyed for this report saying they’re likely to use live chat in the next year

 

Video 

 

  • 46% of consumers want to watch product videos before they buy
  • 81% of companies plan to either increase or maintain investment in livestream selling to drive sales over the next 12 months
  • Brands are seeing conversion rates of up to 30% through livestream selling, along with lower product return rates

Key recommendations for eCommerce brands

Create live commerce experiences tailored to your audience: 

 

  1. Choose the right format, whether it’s live events for special occasions such as Black Friday, demos for product launches or behind the scenes. Ensure you are doing it on the right day at the right time. 
  2. Choose the right platform where your community is. 
  3. Dress your virtual event like you would a physical store. 
  4. Collaborate with influencers and content creators.
  5. Have inventory available to meet demand.

 

Design a social commerce experience that converts: 

 

  1. Create a branded storefront that replicates your website, or focus on curating content for top performing products then encourage social shares/engagement
  2. Film with interactivity in mind, so focus on 1-2 products per video and overlay this with clickable CTA’s
  3. Use ‘shoppable’ ads, but ensure you are using multiple attribution models or even a post purchase survey to measure the success of these ads

Thanks to Shopify for this very comprehensive commerce report. Our key takeaway is that the only constant in commerce is change. It’s something we here at Cake really resonate with as we are committed to staying up to date with the latest trends and innovations in eCommerce, and always strive to deliver the best outcomes for the brands we work with.

 

Are you considering a move to Shopify? Get in touch with Cake to find out more!

Headshot of article author

Beth Taggart

Brand Executive

Chris Thomas

Author

Chris Thomas

CEO & Founder

Chris has been at the forefront of eCommerce and a pioneer of online retailing since the early 00s. A 5-time Drapers Award winner, Chris has extensive experience in developing fashion brands online.

Chris founded Cake in 2016. Based in Birmingham, with offices nationwide, Cake specialises in helping fashion brands understand their market online and then helps to develop appropriate strategical direction to achieve their plan, all backed by his 20 years of operating in the retail market.