This time last year, the economic landscape was pretty bleak. And while we see consumer confidence picking up, the commerce world faces new uncertainty in light of the Omicron variant.
Economic confidence and the ongoing COVID-19 pandemic continue to affect how we shop, and we unpack the data on how commerce will look in 2022 in our flagship report.
But for now, here’s a snapshot of the biggest commerce trends you need to know about – it’s not all doom and gloom.
1) Consumers are battling the urge to splurge
The pandemic has left consumers feeling conflicted. Many want to splash out, reminded that ‘life is short’, but also feel the need to plan for the worst.
Across four of the seven countries included in our research, many are prioritizing saving over spending.
But internet users are also keen to indulge more than they did pre-pandemic.
The gap between saving and spending is greatest among younger consumers, so financial providers would do well to invest in saving-based marketing to meet their needs.
Women are 1.3x more likely than men to prioritize treating themselves, and globally just over half prefer buying experiences over products.
Wowcher, a deal website with a mostly female audience, leveraged this by going big on half-price discounts for leisure facilities and treatments in the lead up to Christmas.
This paints a pretty picture for commerce marketers – campaigns that suggest ways to pamper on a budget are primed to succeed with consumers.
2) The ecommerce boom is set to continue
Ecommerce grew throughout the pandemic. With stores closed for many months and ongoing fears around safety, consumers were forced to shop online.
Across five markets, over a third feel they’ve shopped online more in the past year. And having relied on online shopping for so long, a fifth feel that they will buy even more online in the future.
Smartphones have played an important role in this growth, with 31% using them to shop or browse for products in the past week. Mobile commerce also continues to increase wave-on-wave in our U.S. research – there’s been a 36% increase in the number of Americans doing most of their household grocery shopping this way, and a 25% increase in those doing at least some of it via smartphone.
Online grocery shopping experienced a boom of its own in the past year, growing 8% since Q1 2021.
Any movement in the percentage of grocery items bought virtually is worthy of attention, as the overall global annual spend is immense.
The initial surge in online grocery demand forced retailers like Amazon Fresh to waitlist new customers to keep up with the surge in demand. However, only 38% of monthly grocery shoppers buy these goods online, so there’s still room for brands to shake up the virtual arena. For example, Kroger and Instacart joined forces this year to offer “Kroger Delivery Now”, delivering groceries in just 30 minutes.
For retailers who haven’t yet optimized their digital offerings, now’s the time to start.
3) AR: coming to a store near you
Augmented reality (AR) features are already widely used by social networkers around the world today. This technology allows users to customize images by transforming the way they look and the world around them.
But younger generations want to see this technology in stores.
Over a fifth of Gen Z and millennials want more retailers to jump on the AR trend so that shoppers can try on products digitally. Demand is even higher in the U.S. – with this number rising to a quarter.
While some retailers embraced AR to recreate the in-store shopping experience during closures, those ahead of the curve are using AR to drive footfall recovery. Beauty brand Sephora uses in-store AR to help customers pick out the perfect shade of foundation.
Nike has also joined the party with its “Nike Fit” app feature, which determines users’ shoe size and saves this information in-app. If the customer then shops in-store, a sales associate can simply scan their app QR code to retrieve their size.
The power of these tactics shouldn’t be underestimated.
4) Buy now, pay later services have surged
The use of buy now, pay later (BNPL) services like Klarna, Afterpay, and Affirm has grown in the past year – in the UK alone, their use almost quadrupled in 2020.
These schemes are most popular among consumers in Asia-Pacific and those looking to buy inexpensive items like clothes, shoes and accessories. Now Klarna Bank is looking to introduce longer-term financing for larger purchases, including experiences like holidays.
However, brands hoping to enter the BNPL arena should bear something in mind.
Due to its growing popularity and concerns around consumer welfare, regulators are closing in on this payment method.
In the UK, a consultation has launched on how the industry should be regulated, and the EU is currently tightening its rules on credit to protect consumers.
That being said, of the consumers who have used a BNPL service, 31% enjoy the flexibility offered by delaying payment, while 47% use BNPL to avoid credit card interest. Other users also enjoy the guilt-free spending this payment method allows. However, around half also call for regulation or more controls on who can sign up.
5) Brand discovery is evolving
The pandemic has changed the way we spend time online, along with how we are exposed to brands. With podcast listeners increasing globally by 9% in the last year, over 1 in 5 now discover new brands when they tune in.
Since Q2 2020, the power of search engines as a brand discovery tool declined by 7%.
More surprisingly, Q3 2020 saw social media ads surpass search engines among Gen Zs.
Put simply – Gen Z now looks to social media for information more than search engines.
These changes are profound, but don’t mean traditional formats have lost their appeal.
While Gen Z are most likely to discover brands on social media, baby boomers and Gen X tend to catch them on TV.
Something which our recent pursuit of purpose article explores is how consumers are increasingly using adjectives like “creative” and “talented” to describe themselves, while use of TikTok has also exploded.
Wise commerce brands will find ways to harness consumers’ creative genius by encouraging user generated content (UGC).
UGC is an affordable way for brands to capture the attention of Gen Z on social media, as campaigns which encourage users to join in have a vast reach.
For example, the German branch of KFC recently took to TikTok to increase brand awareness among Gen Z and millennials. They asked users to come up with their own dance moves and share them with the hashtag #DoTheColonel, the campaign gained 225 million views and 157,000 challenge videos in just six days.
Can’t get enough commerce trends? Dive into our commerce flagship report for the full picture of what’s in store for 2022.