By Johan Liljeros, Avensia
This year is aiming to be a banner year for retail e-commerce. According to eMarketer, retail e-commerce sales will surpass $1 trillion in 2022 and make up over 20 percent of total retail sales by 2024.
To seize this $1 trillion market opportunity, retailers must evaluate the shifting retail market landscape, including three major market trends, to hone their digital commerce strategies and give them an edge over the competition.
Trend #1: Bridging The Digital And Physical Storefronts With Livestream Shopping
Looking at the brick-and-mortar landscape, in combination with the growing level of digital commerce channels, livestream shopping can be a powerful tool on how to reimagine and utilize the brick-and-mortar store fleet to create an even better omni-channel experience for customers. With this infrastructure, retailers can utilize stores as last-mile delivery hubs, expert hubs, and, of course, as traditional stores where customers can get a first-hand, hands-on experience with merchandise.
Livestream shopping can be a tool for engaging and building loyalty on a whole new level, as it adds something that e-commerce always missed -- the personal and expert touch to the customer journey.
Success from first movers with this new retail channel and approach will finally push those brand holdouts to move forward with unified commerce strategies to align the best of their digital and physical assets.
Trend #2: The “Greening” Of Commerce Operations
Environmental and eco-friendly awareness are top of mind as consumers look to practice mindful consumerism in the year ahead and look for brands that prioritize sustainability. Retailers must weave sustainability throughout their e-commerce operations from how they plan their supply chain to the information they provide on their websites to demonstrate their commitment.
Artificial intelligence (AI) is playing an increasingly important role in retail operations, and it also can help in supporting sustainability strategies. For example, it can dramatically increase the accuracy of retail planning by ensuring retailers have the right product in the right locations, and that supply always matches demand. Everything can be optimized, and waste – from empty trucks driving thousands of miles to products being thrown away – can be reduced. AI can require a non-inconsequential investment – but it can have a big impact, significantly reducing waste and cost.
Historically, there have been two common approaches to sustainability storytelling, and both are flawed. Firstly, retailers have tended to focus on campaigns built around one-off innovations or events that have little meaningful impact. An increasingly educated consumer sees through this nowadays, so it simply does not work. Secondly, the approach has been to simply wax lyrical about how certain targets are being met and boxes ticked. This approach is now problematic because customers demand more – this is a crisis, and business as usual isn’t enough.
Trend #3: Composable Commerce 2.0
Over the past few years, brands have been big adopters of composable commerce, which leverages built-in best-of-breed components to easily scale digital commerce. This is not only a technical solution, but also a new way of working and organizing which breeds creativity and experimentation and infuses a greater understanding of the use and purpose of digital channels throughout an organization.
Gartner estimates that by 2023, companies who have adapted to composable commerce will outrun the competition by being 80 percent faster in adapting to new requirements.
Since the start of the pandemic, composable commerce strategies have been pressure tested. A study by McKinsey found that companies had digitized many activities around 20-25 times faster than they had previously thought possible. As the pandemic recedes, expectations will now be very high when it comes to the launch of new digital initiatives. As a result, composable commerce strategies will be even more robust and fine-tuned in 2022.
Composable commerce will be more aligned around the concept of modern commerce and will continue to expand into other channels to optimize each and every channel. An example is moving the point-of-purchase closer to every potential customer with the best possible component.
Factoring Trends Into Savvy Digital Commerce Strategies
We are seeing sweeping changes in consumer and business buying behavior because of the pandemic. Now is the time for big, fundamental shifts in the way brands do business. The most successful retailers will be those that level up their digital commerce strategies by paying close attention and mapping to these key trends.
About The Author
Johan Liljeros is General Manager and Senior Commerce Advisor, North America, at Avensia. Through a combination of technical and strategic business expertise, Avensia helps B2C and B2B customers accelerate their growth and become even more successful in their day-to-day business through next-level digital commerce.