Top 4 Ecommerce Trends in 2022

Every new year brings excitement and new possibilities, and new year’s also bring new trends to the world of ecommerce. COVID-19 and the scarcity it has brought along with it has had a massive impact on online retailers, and brands need to stay relevant and up to date. We believe that these ecommerce trends will help you keep your foothold on your market in the coming year.

We’ve included our top four ecommerce trends to look for in 2022 below. These are definitely not the only trends to look out for in 2022, but we narrowed our list down to the four we feel will have the biggest impact on online retailers.

Increased AI Use

As an online retailer, you know the value of a personalized experience for your shoppers. In fact, Epsilon research indicates 80% of consumers are more likely to make a purchase when they’re offered a personalized experience. But how do you create that personalized experience? Increasingly, retailers are turning to Artificial intelligence.

AI’s machine learning can do more than any number of human brains could possibly do for your retail website. With its constant collection of data and ability to group that data into meaningful segments, AI gives you what you need to create a more personalized experience for your shoppers.

Whether you’d like to serve up relevant promotions or encourage shoppers to pick up where they left off, or suggest an item that is complementary to one they have in their cart, AI can help provide the necessary data to make those determinations.

Highly Optimized Websites to Maximize Conversions

Just like fashion trends, online shoppers’ buying habits and behaviors change on a regular basis. Therefore, you need to routinely test your retail site to ensure it’s highly optimized to bring in as many conversions as possible.

The easiest way to do this? A/B testing. We’re not saying test out two different colors for an ‘Add to Cart’ button for a week and call it a day. If you really want to stay ahead, you need to be testing out various elements (headlines, font color, font size, button placement, layout, etc.) to find what combinations produce the best results with your shoppers.

There are easy-to-use tools available (Google Optimize, Optimizely, VWO to name just a few) that your team can utilize to start testing out various elements. However, since you don’t want to test multiple elements at the same time (how will you know what actually performed better?) you’ll want to continually test to find the overall best experience for your shoppers.

And then, when you add new features to your site, you’ll want to make sure you test them as well. Maybe you add on the ability to choose from various payment methods, you’ll want to make sure new and returning shoppers are aware of this. Test out where on the page layout you notify shoppers, what the font color is, at what point in the buying journey is it shared with them, etc.

Increase in Mobile Shopping

This has been a trend for the last few years and it isn’t showing any signs of slowing down. According to Statista.com, mobile shoppers accounted for 52.4% of ecommerce sales in 2016. Fast forward to 2021 and mobile shoppers accounted for 72.9% of ecommerce sales.

On one hand, yes, there are more mobile devices in more hands now. Everyone from teens to grandmothers probably owns at least one mobile device. However, in addition to the increase in devices, is the improvement in functionality on mobile devices.

Gone are the days of staring at your phone as the blue bar at the top slowly made its way from left to right as the page loaded (unless you’re in the middle of the desert with no reception). And the designers of mobile devices have done their research to find out what size and design people are most comfortable with and, therefore, more likely to use than their desktop. Not to mention increased consumer confidence regarding buying online as a result of the pandemic.

In order to keep up with the improved functionality of mobile devices, you need to make sure your retail site is mobile responsive. Click here to learn more about responsive web design and how it can affect the perception and performance of your brand.

Multiple Payment Options to Reduce Abandoned Shopping Carts

Have you been tracking your shopping cart abandonment rate? According to Truelist, the global average rate of cart abandonment is 75.6%. We’ll give you a second to read that again. 

We would also suggest tracking whether the shopper was on a mobile device or desktop because Truelist also reports the average abandonment rate on mobile phones is even higher at 85.65%. If you’re not already tracking your retail site’s cart abandonment rate it’s time you start.

While these statistics may seem staggering, one of the ecommerce trends we’ll see in 2022 is the increased availability of multiple payment options which can greatly influence your shopping cart abandonment rate. One of the major factors at play in this trend is the age of your audience, something else you should be tracking if you’re not already.

A survey by Paysafe found Gen Z shoppers vary their payment options more often than Gen X shoppers. In fact, when comparing each age demographic from Gen Z to Baby Boomers, Gen Z and Millennials were comparable in regards to awareness of alternative payment options. If your retail website caters to a Gen Z or Millennial audience, alternative payment methods may soon become a necessity to compete at all.

The most popular payment methods today are:

  • Google Pay
  • Apple Wallet
  • PayPal
  • Payoneer
  • Credit cards (traditional and contactless)
  • Stripe
  • Cryptocurrencies 

While we’re not claiming to be psychics, nor do we have a crystal ball giving us a glimpse of the future, we’re confident these are trends ecommerce brands will be seeing in 2022 and continue to be on the rise in the years to come. No one likes getting left behind, but when it comes to your retail website, you really need to keep up with these ecommerce trends. Because there’s a good chance your competitors will be.

Beauty and Cosmetics Ecommerce Strategies That SELL

cosmetics ecommerce guide

The beauty and cosmetics online retail industry is growing rapidly online. Many emerging beauty ecommerce businesses continue to invest more money in online efforts to increase their online presence. However, the industry can be tricky to conquer. 

Whether it’s smelling a shampoo fragrance, testing the feel of lotions, or seeing if a lipstick complements your coloring, online cosmetic shoppers sacrifice the luxury to sample products before they purchase. However, many savvy beauty and personal care companies know that a switch to ecommerce is essential. The new post-coronavirus ecommerce landscape accelerated the shift to ecommerce mediums. Brands that invest in a robust online presence and create a satisfying shopping experience will continue to drive customers to their websites and convert new visitors. More importantly, they can cultivate a strong relationship with their customers, nurture their relationship, and create brand-loyal enthusiasts. 

“Beauty products are a great thing to buy online. They have a long shelf life, you use them regularly, so you buy them often, and once you’ve chosen a brand and product you like, you get the same thing every time,” says Skylla Jones, Nogin’s director of sales for health, wellness, and beauty.

Now, more than ever is the perfect time for beauty brands to develop their online ecommerce channels. Jones mentioned, “Before Covid, online sales of health, wellness, and beauty products totaled more than $53 billion in 2019, up almost 19% from 2018.” In fact, it’s the second-fastest growing online category, behind food and beverage. 

Learn the latest ecommerce trends in the beauty and cosmetics industry and how to dominate your niche to sell more online. 

Why is the Beauty Industry Growing and How Is It Changing?

The beauty industry is booming, and in 2020 alone, the beauty and personal care market is valued at $483 billion worldwide, and it’s predicted to grow to $511 billion in 2021. The industry is booming for a multitude of reasons. Beauty vloggers on YouTube and social media influencers allow visitors to discover new products and engage with brands. Cosmetic and beauty companies have continued to invest more in direct-to-consumer approaches, including targeted social media advertising to reach potential customers that fit their ideal audience demographic. 

Social media platforms have also made it easier to purchase products directly from the app for an efficient ecommerce marketing funnel that attracts impulse buying. Brands can also leverage celebrity collaborations to help promote their products. Cosmetic brands spend millions on celebrity influencers to post on their social media channels to hype their products, and it’s especially effective for luxury ecommerce brands.  

Beauty brands also have access to informative marketing analytics from their website traffic, social media campaigns, and PPC ads to better understand which visitors are most likely to convert. They can leverage retargeting campaigns and email marketing to re-engage with visitors to build rapport and increase the likelihood of repeat purchases. 

Many customers in the cosmetic and beauty industry often are extremely brand loyal compared to other sectors. Once they find a brand they like, they tend to purchase various products from the same brand. More importantly, smaller ecommerce brands are continuing to emerge and challenge major brands. Similar to the music industry, many indie brands can start a company from scratch and begin to cultivate a following on social media. They can also create their own Shopify store without much web knowledge. 

The younger generations are also more concerned with the ingredients that go into the products they purchase. They want organic, non-toxic, cruelty-free products. Customers are willing to pay a premium for cosmetic products that align with environmental consciousness and sourced from responsible mediums. They are also willing to expose brands that don’t. Negative online reviews can tarnish a brand’s reputation, so it’s crucial brands invest in greater transparency into what goes into their products. 

Cosmetic and beauty brands can capitalize on these trends by developing long-form content and informative collateral that discusses why their ingredients are superior to the competition. They can qualify potential customer concerns and answer common questions on their products to help reassure of their market superiority. 

For instance, if the main ingredient in your face cleanser is turmeric, you can develop a blog discussing the benefits of turmeric for skin. It will answer the visitor’s question and educate them on why turmeric face cleansers are better than other face cleansers. 

Stay ahead of the competition and start your shift to ecommerce before it’s too late. 

How is the Beauty Industry Changing: 5 Beauty Retail Trends and Strategies for Your Cosmetic Ecommerce Business

cosmetic ecommerce strategy

Capitalize on the ecommerce boom in the beauty and cosmetics industry and follow our five essential strategies to improve your online operations. 

1. Don’t Focus on Your Brick and Mortar Store. Shift Your Focus to Ecommerce to Reach Your Customer Base

There was a time you had to go to the mall or a department store to buy your makeup, but that’s changed as brick-and-mortar retail sales have declined and consumer shopping habits are trending online. Instead of building a brand with a store and then moving to the Internet, companies such as Glossier and Billie earned devoted customers via ecommerce and then added brick-and-mortar locations as needed. 

“Discovering new products used to never happen online, and that’s changed dramatically,” Jones says. “A brand is also much more profitable. The margins are much higher when they sell products from their online store.” For brands that already have a presence in stores, Jones says a smart omnichannel strategy would be to make an initial sale in-store, then drive future purchases online.

You can also easily create urgency and scarcity to increase sales online. Promote your sales using social media campaigns and drive qualified leads to your site. Check out our retail pricing strategies and product listing strategies to maximize your paid media efforts and increase your ROAS. 

2. Create Loyalty Programs and Dynamic Online Experiences

Brands carried by large chains such as Sephora and Ulta can benefit from those mega-retailers investments in online shopping and advertising. “They take extraordinary measures to make sure their loyalty programs and unboxing experiences make the online experience just as much fun as the in-store experience,” Jones says. “Their loyalty programs and unboxing experiences are fun.” 

However, it is just as essential to get customers to visit a brand’s own ecommerce site to increase profitability and increase customer loyalty while still keeping big retailers happy. Some ways brands can get traffic include offering gifts with purchase or small discounts that don’t dig into profits too much. This has the added bonus of preventing customers from being lured into buying other brands while shopping at a third-party site.

3. Have Stellar Cosmetic Fulfillment Services

Beauty products are quite different from many other online products. Each cosmetic product has a unique expiration date and compliance requirements. Some even may require hazmat shipping and storage. 

When scaling a cosmetic brand, it is essential to have an optimal inventory management system. Nogin provides comprehensive outsourcing services for ecommerce, including 3PL fulfillment, warehouse storage, and continuous R&D to ensure your internal costs are low and your profit margins are maximized. 

Our ecommerce business platform and enterprise managed services ensure you have superior intelligent commerce solutions to scale your business. We leverage predictive analytics, machine learning, and have the expertise to ensure your business is more profitable while saving you on expensive internal oversight costs. 

4. Have a Smart Digital Marketing Strategy

Ideally, when someone searches for your brand, it pops up first, before the big retail sites also carry your products. Getting to that ideal point can require a high-level, multifaceted approach that may include Facebook ads, a vibrant social media presence, and a robust customer data collection system, which can then be used to send targeted emails for sales and promotions that take customers directly to your site. 

Social media is vital; Jones calls it one of the most important for brands in this day and age. Influencers and celebrity collaborations can pay dividends in sales, but brands need to beware they aren’t spending too much on these partnerships from their marketing budgets. In essence, Jones adds, “The better relationship you can build with your customer, the more likely they will go directly to your site, as opposed to a third-party site.”

“Online shopping is the new normal,” Jones says, so this is an excellent opportunity to build and enhance ecommerce sales.

If you have a beauty business that needs the resources to grow and strengthen your online channel, partner with Nogin. Our team can supply you with customized solutions that can include logistics, creative, marketing, back-end technology, strategic services, and much more, depending on your specific goals. 

5. Have a Story to Tell and a Mission Your Brand Embodies

Your website should not only sell your products. It is also a hub for new visitors to learn about your story, mission, and why they should purchase from you. Younger generations are more concerned about the ethics of a company. They care about sustainability, environmental impact, and other factors that could influence their purchase of a product. 

Have a mission statement and a story to tell. Talk about what you believe in and build a relationship with your audience. If your products are more expensive since you choose to work with local farmers to source your ingredients, tell your audience. Help them understand why they should shop with you. Talk about any charitable work your business pursues and your mission for something bigger than just profits. People want to support organizations that aren’t just about the profit margins but about helping their communities and their planet. Give your visitors something to believe in and spread messages that resonate with their core beliefs.  

Big Box vs Small Box Retail Ecommerce Strategy: How to Compete with Big Box Retail Stores

compete

Small businesses have always had their work cut out for them when it comes to competing with big retailers. Big box stores have more resources, reach, and connections to dominate smaller brands. Many small box retailers have to try to leverage their big-box competitors and sell inside their storefront. However, that can quickly cut into profit margins. 

However, the new ecommerce frontier has plenty of opportunities for smaller to medium-sized businesses to compete with larger big-box retailers. Luxury ecommerce fashion brands can craft unique web experiences and leverage celebrity collaborations to engage their customers and sell directly to them. CPG brands can use a DTC strategy to diversify their commerce channels, which became necessary during the coronavirus ecommerce landscape. 

Every brand, regardless of its niche or category, can find success online. Using marketing analytics and an effective ecommerce marketing funnel, brands can optimize their campaigns and understand how their audience interacts with their content. They can identify the most important website KPIs and conduct monthly reports to track the progress of their efforts. Needless to say, smaller brands can finally connect with their audience, sell products, and scale without depending on big-box retailers. 

Let’s discuss the ins and outs of big-box retailers and hear from our CEO, Jan-Christopher Nugent, on what you’ll need to set up your brand for ecommerce success. 

What is Big Box Retail Store

Big-box retail stores offer a variety of products in a large, physical storefront, like Target or Walmart. Big-box retailers continue to expand their selection of inventory, and many have even started to sell fresh produce and food. 

Big-box retailers have two critical advantages over smaller brands: economy of scale and one-stop shopping. Visitors can shop for various items across various categories with ease to consolidate their shopping efforts, save time, and enjoy discounted prices. Big-box retailers stock inventory in larger quantities to save money on each item which means they can price their merchandise at lower prices than boutique stores. 

How Big Box Retailers Are Logistical Trendsetters

Brands that sell inside big-box retailers must adhere to strict logistical practices. Small companies must elevate their logistics to provide a sufficient supply of their products to their big-box retailer partners. 

The first thing many brands must do is use EDI software integration to exchange purchase orders, invoices, and documents quickly. Electronic Data Interchange (EDI) allows companies to automatically exchange orders and invoices between each companies’ EDI software systems. It creates a more efficient order and payment process but often requires a hefty upfront investment to get started. However, it increases efficiency and reduces the risks of errors. 

Brands selling inside big-box retailers will also have to invest in effective inventory management to ship their products. Many brands have to reevaluate how their inventory is fulfilled and shipped. One solution is 3PL fulfillment

The Problem With Big Box Retailers

Although big-box retailers offer convenience and great prices, they also present several pressing issues. Big-box retailers have a huge carbon footprint and rely on massive storefronts (often bigger than 50,000 square feet) and large parking lots for shoppers. They use predatory marketing and pricing strategies to strangle mom-and-pop stores and undermine small businesses. They offer no cultural identity, undermine retail wages, and they offer poor benefits to their employees, such as low wages and lack of health insurance.

Nogin offers a different approach. We offer commerce as a service. Our partners have the unique opportunity to compete with big-box behemoths such as Walmart and their ecommerce equivalent, Amazon. Scaling from a medium-sized enterprise business to a legitimate enterprise business is almost impossible. Many brands have to invest in expensive internal development to update their online storefronts to the latest requirements, offer discounts that cut profit margins, and spend on research and development. 

As an ecommerce provider, our suite of enterprise ecommerce solutions and proprietary ecommerce business platform allow our partners to focus on growing their brand while we intelligently handle the tough ecommerce logistics and operations. You’ll never have to replatform again, and our team of ecommerce Nogin Nerds has the expertise to improve all aspects of your online operations. Our 360-approach allows our partners to become more efficient and increase profit margins while having the infrastructure to scale. 

We use machine learning, AI, and marketing automation while tracking every purchase to give us valuable data on what efforts work and which ones do not. To put it simply, it’s impossible to keep up with Amazon without using your Nogin. Big retail has the advantage with budget, resources, and capabilities. They have logistics, free shipping, marketing algorithms, onsite developers, R&D, and more. Fortunately, Nogin has the same capabilities as big-box retailers but the nimbleness to help smaller brands scale faster and become more profitable. 

For instance, the average brand spends 11% on fulfillment, returns, and free shipping, while big retail pays around 3.5%. Leveraging our Nogin services, you can dramatically cut costs on free shipping, fulfillment, and returns. Also, Nogin’s continuous R&D allows your brand to test winning strategies tested by partner clients. 

Becoming a Nogin partner ensures your brand won’t have to worry about competing with big retail because you’ll have access to the same strategies, resources, and capabilities. The difference is that your brand will still be able to customize, shift, and pivot before the big retailers can catch up. 

Big Box vs Small Box Retail: How Smaller Brands Can Compete in Ecommerce

Big-box retailers have dramatically shifted the fundamentals of ecommerce. Major online retailers are letting brands sell on their sites, but the brands have to take on all the logistics of getting goods to consumers and deal with the risk of manufacturing without advance orders.

So how does a brand adapt and thrive in this new ecommerce world? Jan-Christopher Nugent, the CEO of Nogin, says brands have to adopt a customer-focused, data-driven perspective that employs cutting-edge technology.

1. Deliver an Exceptional Online Experience

“It’s not just about the retailers, it’s about the consumer and delivering a great experience wherever the consumer wants to buy the product, whether it’s the brand’s online store, retailers such as Amazon or Nordstrom, or a physical store,” Jan Nugent states. “Brands really have to understand technology, but most medium-sized brands don’t have IT organizations or developers, which is why Nogin has created an ecommerce operating system for all aspects of this shift, both the technology and the people. Forty percent of physical retail stores have gone away, and most of these brands have only made up twenty percent of that online—their organizations still haven’t shifted to be high-tech, internet organizations.”

Nogin helps brands make that shift seamless. Nugent advises that companies start by looking at their marketing strategy and making sure it’s focused online. That means looking at traffic to see where customers are coming from, whether it’s the brand’s online store, social media, online retailers, or even a physical store, so brands aren’t just driving traffic to their online store, but to every channel the brand offers.

2. Provide Exceptional Customer Service

It’s also essential to have a phenomenal customer experience, with products easily accessible across all channels. What defines a phenomenal experience has changed substantially from the past—such as the advent of same-day delivery, easy returns, and an experience tailored to individual consumers—and brands have to keep up so customers will keep coming back.

“The level of sophistication of a lot of these entry-level technologies is fine when brands sell to a small audience, but when brands make it a serious part of their businesses, they need to be plugged into more advanced capabilities,” Nugent says. “Ninety percent of these brands don’t have an IT department, developers or internet experts, but if you look at the pure online retailers, 80 percent of their organization possess those skills.”

3. Leverage Machine Learning, AI, and Marketing Automation

It’s crucial to use forward-thinking technology. That’s where partnering with Nogin provides significant added value. The company can develop customized solutions for brands that have limited technological resources, as well as those that have people in place who can run the technology. “We invest so much more heavily in research and development because everything is happening so fast,” Nugent says. “Most brands are focused on considering the tech capabilities that are popular today because they’ve been contacted by a salesperson or an advertisement, whereas big retail and folks like us are developing for what’s going to be significant four to five years from now.”

Using innovative solutions from Nogin gives brands the data they need to enhance the customer experience and strengthen their ecommerce businesses. It used to be that the internet treated consumers as if they were all the same. But today, data focuses on organizing consumers into groups where brands can deliver experiences, products, and content unique to them. Nugent gives the example of a company selling rain boots online. Three years ago, the brand would have advertised a 20% off sale on the boots during the summer off-season. Today, data can tell a brand that people in the Northeast are in a rainstorm, and the brand could offer free same-day shipping on boots to people in that area.

Data can also have surprising and valuable results—Nugent recalls working with a fashion brand that thought its primary customer was a man interested in luxury watches and vacations. Still, it turns out the main customers were families who wanted matching outfits. The brand was able to tailor its content specifically towards both groups. Because Nogin has a deep knowledge base for data-based buying patterns, it can help brands compete with big-box retailers with large data pools built up over many years with millions of dollars.