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The Future of E-commerce: Trends, Insights, and Recommendations

Businesses have undergone more changes in the last two years than they have in the last two decades. As an outcome, they have adapted themselves to the modern-day consumer. But issues like record-high shipping costs and diminishing returns on online advertising continue to plague the e-commerce industry. And this has hugely impacted the way we shop, ship, and sell.



Keeping these changes in perspective, Shopify has come up with a report based on an in-depth analysis of exclusive survey data from businesses and consumers across the globe. The report highlights three major trends from the e-commerce industry that offer unparalleled insights into the future of e-commerce.


Here are the major highlights of the report.


Trend 1. Rising acquisition costs force brands to foster long-term relationships with their customers.

Due to the high costs involved in customer acquisition, brands are increasingly looking forward to strengthening customer connections by putting their brand identity at the front.


Key Takeaways

  • Direct-to-consumer competition is rising

Although retail businesses have picked up, e-commerce sales haven’t slowed down, leading to increased competition among DTC brands.


  • Advertising costs are skyrocketing across platforms

Digital advertising costs are taking a lion’s share out of marketing budgets, thereby, jeopardizing customer acquisition models that are heavily dependent on marketing.


  • Brand building is helping in attracting and retaining customers

Businesses are investing in brand building to overcome challenges from rival brands, which enhances customer lifetime value, drives conversion rates in short term, and attracts out-of-market shoppers in the long term.


How to Combat Rising Acquisition Costs in 2022

1. Develop a brand measurement methodology.

Brands need to align their brand activity with their top-level brand goals like market share, brand consideration, and growing share of mind. Also, gathering data through consumer surveys by using metrics like brand awareness and perception, purchase intent, and net promoter score can be a great way of understanding what your potential customers expect from your brand.


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

Use a combination of performance marketing and brand marketing to create lifelong customers. A 60/40 split between brand building and short-term performance marketing would be ideal in achieving increased ROI from your performance-based advertising in the long run.


3. Diversify your advertising and sales channels to lower the acquisition cost.

Brands need to experiment with new channels like connected TV, messaging apps, and voice shopping that can act as a hedge against the uncertainty of digital advertising. Also, they need to invest in niche channels with high engagement. At the same time tried and tested channels like email and text must not be discounted as they continue to be the most cost-effective ways for nurturing relationships.



Trend 2. The death of third-party cookies is forcing brands to rethink personalization.

As browsers render third-party cookies obsolete, brands are considering new ways of personalization.


Key Takeaways

  • Consumers are demanding personalization

Consumers are demanding personalized shopping experiences even as regulations are putting curbs on data tracking. Also, the biggest players are taking away any support for third-party cookies.

  • Personalization isn’t a magic wand for customer engagement

Personalization can’t automatically lead to customer engagement. Brands tend to innovate with first-party data, but personalization can’t lead to long-term relationships on its own.



  • Brand communities are building customer loyalty

Brand communities can play a key role in fostering trust and brand equity, thereby, leading to increased customer retention.


How to Build Community in 2022

1. Invest in the right team to grow your community.

Strong brand communities don’t emerge overnight but require a significant amount of time and resources. Therefore, brands need to learn about their customers and build relationships with them, which can make it easier for them to strengthen their community. Also, they need to plan and implement social media and communication campaigns that support their marketing strategy.


2. Find ways to tie your community back to business results.

Brands should use data to test the effectiveness of their community. Instead of seeing success in member growth and retention, their brand community can support their overall marketing and sales goals. Also, brands need to gather and mobilize first-party data. By feeding the results of their community back into their community strategy and customer relationship management system, brands can create personalized touches at scale.


3. Give members a clear reason to come back.

As a brand, you must be clear on why your group exists and how it will give back to both your brand and your members. You need to create a sense of belonging through shared values, traditions, and norms.


Trend 3. New commercial opportunities emerge on the biggest social platforms.

Brands are increasingly embracing experimentation to leverage the impact of social commerce.


Key Takeaways

  • E-commerce is moving to social media platforms

E-commerce activity is rapidly migrating to social media platforms, with different aspects from brand marketing to customer service, all finding their way to social media platforms.

  • Social media platforms are presenting new ways of customer engagement

Diverse platforms are leading to unique customer experiences, thereby, motivating brands to reimagine consumer engagement.



  • Video is making social commerce more appealing

Leading brands are focusing on social-first approaches like behind-the-scenes live streams, video consultations, and personalized product recommendations.


How to win at social commerce in 2022

1. Create live commerce experiences tailored to your audience.

Choose a Livestream platform that allows your customers to purchase without having to leave the social channel that they are currently on. Also, make sure that your content is visually appealing by using visual prompts and animation.


2. Design a social commerce experience that converts.

Brands must consider creating a social storefront. This storefront can either replicate their website experience to offer familiarity or curate top-performing products to feature on social media. Brands should then encourage social sharing with exclusive discounts, contests, and promotions.


Wrapping Up

The opportunities and competition in the e-commerce space today are unprecedented. The ever-decreasing return on ad spend is encouraging brands to place customer lifetime value as their top priority and promote brand loyalty. With trust becoming the main currency of e-commerce, brands need to be authentic, transparent, and readily available to online consumers. And this Shopify report on the future of e-commerce will give you major insights into the current major trends in e-commerce.


To delve deeper into the findings of the report, click here.


Stay tuned for more insightful Shopify reports on the future of retail and the future of shipping and logistics in the coming weeks.