In this episode we discuss three ways that eCommerceers can stay ahead of the game in 2022.
In 2020 more than 2 billion people bought something online. The global pandemic was the catalyst to a well reported eCommerce surge. While the world worked from home, Amazon alone grew in excess of 300 million customer accounts.
That was then.
As we approached the end of 2021, when it was reported that one dollar in every six dollars in America was spent online in Q3 alone, it became more apparent than ever that eCommerce isn’t changing retail. Retail has changed, forever.
The industry is no longer surging, it’s dominant. It is no longer progressive, or a great benefit for a business to sell online. It’s now a profound risk not to, and eCommerceers must now turn their attention to staying ahead of the competition.
eCommerce is now big business, and big businesses are highly competitive, scrutinised by regulators, and ultimately must meet the ongoing, and ever-changing demands of their expectant customers.
So how can an aspiring eCommerceer stay in the hunt, and ahead of the pack in 2022?
Here’ three totally unsexy ways to future proof your eCommerce business next year.
The UK’s leading data assurance experts IDS describe that,
“The monetization of data is the fruit that digital transformation bears.”
The management and monetization of everything from business data and website analytics to the holding of customer information will be the cornerstone of every eCommerce business in 2022, with no exceptions.
Whether seeking to implement an omnichannel, hyper-personalised customer experience, or ensuring POA and/or ROA in terms of social ad-spend, the fact remains that information underpins all of it.
eCommerce has grown at a staggering rate over the last two years, and with that growth comes greater scrutiny from regulators. And eCommerce (like all tech businesses) has always been a frontier in terms of regulation, with innovators and disruptors constantly finding (mostly) legitimate ways to create an advantage.
The rise of regulations (like GDPR in Europe) ensures the protection and use of customer information. These rules must be front of mind for every eCommerce business in 2022. From this point forward the sovereignty of data and the penalties for the misuse of data or failing to protect customer information will only grow more severe. Just ask Facebook.
Those eCommerce businesses that can manage and monetise data will be most successful in 2022.
It’s not trite to say that the most important cog in the wheel for any business are its people. Over the course of the last two years the eCommerce industry has become just that. An industry.
Despite the challenges to the international supply chain in 2021, there remains a world of opportunity eCommerce in 2022. Like all good businesses, eCommerceers will rely heavily on their people to drive them on to greater success next year.
For many eCommerce businesses, the 2022 strategy revolves around the need to operate on their own independent website, and further to sell across a range of marketplaces, all with a view to maximise their earning potential. From a technology point of view this will take some coordinating.
Other key tech advancements include everything from, mobile commerce at the basic level, to interactive 3D visualisation, live shopping experiences and even augmented reality demonstrations of products.
The requirement for platforms to accommodate voice activated search continues to increase in volume, and there’s an increasing demand for a more diverse range of payment options too, including buy now and pay later.
Independent eCommerceers will need the right tech stacks and most significantly the right tech teams to deliver.
The trending themes for eCommerce in 2022 include the continued rise to prevalence of Social Commerce, and the deepening requirement of the personalised shopping experience for the buyer.
The ready availability of data and the ever-growing means with which to communicate with a customer base will be central to every eCommerce marketer’s strategy in 2022.
High on the customers agenda is a demonstration of authenticity from the online seller, most often in the form of purpose made content to show the company is living up to its values. Sustainability is also priority for the online buyer in 2022 eCommerce businesses that care will be successful.
From a technical point of view the advent of Googles Local Inventory Ads (LIAs) is a new tool to drive revenues in 2022. Interesting too is a widespread change in terminology and a slightly sterner test in prospect for the eCommerce marketer.
Previously eCommerce marketers derived success from ROA – return on ad spend. As a like, share and even a click is not a sale, the trend for next year has now firmly shifted to revenue on ad spend ROA and even profit on ad spend POA. This will be a game change for the marketing departments bidding strategy for Google, Facebook and Instagram next year.
While eCommerce continued to grow in 2021, it’s fair to say that where logistics is concerned, an awful lot went wrong.
The international supply chain crisis was global headline news every day throughout Q2 and Q3. The simple act of getting the right product, in front of the right customer, at the right time is one thing, sourcing and delivering that product was a much greater challenge this year.
From the challenges of predicting needs and sourcing products, to ensuring stock and the fulfilment of orders, the requirements of the operations side of an eCommerce business have scaled concurrently with surge in demand.
The pressure on the ops team doesn’t simply stop at leaving revenue on the table in terms of not having stock to fulfil orders in 2022. eCommerce businesses can be actively punished by both customers and marketplaces alike.
Not only are eCommerceers susceptible to falling down the ‘order of display’ on a marketplace because of bad reviews from customers, any failure on their part to not fulfil orders can also be punished by the marketplace that they are operating on.
Amazon are currently appealing a staggering $1.28 billion fine in Italy. The charge is levelled for Amazon favouring its own FBA (fulfilment by Amazon) merchants, and illegally limiting merchants selling independently on the platform.
The Autorità Garante della Concorrenza e del Mercato, or AGCM judged that,
“Amazon had harmed competing operators in the e-commerce logistics service.”
Logistics in 2021 was enough of challenge for eCommerce without having to compete with one of the world’s most powerful businesses.
While it may sound a little hackneyed to suggest that all businesses are built on relationships, it’s not an unoriginal notion when it comes to the world of eCommerce.
eCommerce is no longer growing, eCommerce is grown. The industry now operates in the same sphere and competes intensively with traditional businesses, and the fundamental rules apply.
Consider 2021 and the challenges that every industry including online retail has endured. Established businesses that could rely on suppliers, logistics and finance survived. The businesses that invested successfully in their relationships over a long period of time endured. Those that didn’t, simply fell by the wayside. In seeking a competitive advantage and to forge new relationships in 2022, eCommerceers should consider these key aspects:
Businesses will typically have a fixed credit limit with a raft of suppliers, that limit will be supported by trade credit insurance. In the instance that the price of a commodity has risen, the business’s credit limit with their supplier doesn’t simultaneously rise by default. It’s easier to manage funds for critical deliveries with a solid relationship.
Procurement Directors achieved rock start status in 2021 when the demands of the ailing international supply chain meant that those with a wide network of suppliers were in the best position to broaden their supply base and fulfil demand.
Simply put, new supplier relationships cost money, particularly in times of high demand. In 2021 those new relationships came with tighter credit terms; new suppliers had the expectation of deposits and shorter payment cycles.
Businesses that were less reliant on physical supply chains, preferred to keep their trusted suppliers close and significantly keep them loyal. The best way to do that is to pay early and become a buyer of choice. Therefore, a great relationship with a working capital provider can significantly increase and eCommerceers chances of success next year.
The new year will see the dawn of a golden age for eCommerce. Consumer habits are now longer changing, they’ve changed.
Buyers are more sophisticated than they’ve ever been, the technology is more advanced that it’s ever been, the opportunity for eCommerceers is bigger than it’s ever been. The future is bright, and the eCommerce business that gets the unsexy parts right, will no doubt succeed in 2022. Technology is an incredible enabler, and business is business.
eCommerce is no longer new business; it’s big business and the fundamental rules apply.
If now is the time to drive your eCommerce business to the next level, try our calculator to help you asses how TradeBridge finance for the eCommerce sector will help drive your growth.