The COVID-19 pandemic altered consumer behavior largely by accelerating trends that were already gaining traction, particularly in e-commerce. The question for retail brands and their vendors is to what degree consumers will stick to their newfound preferences for online shopping—and how those preferences will evolve in 2022 and beyond.
According to research firm Euromonitor International, the top five trends to watch are:
- Predictive personalization, which entails using consumer data to gain a competitive advantage.
- Delivery in minutes, which could allow retailers to transform internet sales into impulse purchases.
- Green e-commerce, which reflects a growing concern for the environment, especially among Generation Z.
- Pickup perks, which could influence consumer interest in curbside pickup.
- Moving into the Metaverse shop, which is expected to take online shopping into new territory.
How companies adapt to the trends is likely to influence their reputations. According to a Euromonitor survey in late 2021, 89% of industry professionals expect consumers will judge their companies based on their digital prowess, even after the pandemic fades.
Digital prowess will earn customer loyalty in a variety of ways, according to Euromonitor. For consumers in 2021, the most influential loyalty feature was helping solve problems, followed closely by extending offers to people just for being customers and making the shopping process more convenient.
This year, consumers will continue to expect more from digital interactions, according to Euromonitor. And they will give greater weight to personalized experiences than to generic loyalty rewards. In a March 2021 survey by Euromonitor, 31% of digital consumers worldwide said they were seeing no value from the loyalty rewards they were earning.
To create those personalized experiences and retain customers, brands will need to focus on using data to predict consumer behavior, according to Euromonitor.
“AI is going to be at the center of these efforts not only because it enables companies to effectively comb mounds of data to offer greater personalization, but it’s also critical to empowering both real-time and even predictive strategies,” says Michelle Evans, global lead of retail and digital consumer at research firm Euromonitor International.
Glitches in the supply chain weigh on consumers as heavily as they do on manufacturers and retailers. According to Euromonitor’s March 2021 survey, 42% of global digital consumers said longer-than-expected waits are a delivery challenge.
Nonetheless, consumers are expecting quicker service, according to Bob Hoyler, a consultant with Euromonitor. “Reducing delivery times for certain product categories, especially food and beverages, will be key to continued e-commerce growth.”
To meet the demand, retailers will invest in “ultrafast delivery infrastructure,” according to Euromonitor. As the infrastructure matures, it will allow consumers to engage more regularly in online impulse buying.
“By the end of 2022, many urban consumers will have access to rapid delivery times as low as 10 minutes, at least on products such as snacks, drinks, and household essentials,” Hoyler says in the webinar.
Convenience and Climate
While consumers enjoy the convenience of online shopping and rapid delivery, they are increasingly aware of the environmental fallout. That fallout includes carbon emissions linked to last-mile deliveries and nonrecyclable packaging waste, according to Euromonitor consultant Maxim Hofer.
“Consequently, online players will be under increasing pressure to make products, packaging, and deliveries more sustainable as consumers demand green e-commerce,” Hofer says.
Nearly two-thirds of global digital consumers, or 65%, are worried about climate change, up from 55% in 2015, according to Euromonitor’s survey of consumers.
“While companies also face growing pressure from regulators to comply with stricter climate policies, the shift toward green e-commerce is primarily driven by consumers,” Hofer says.
In fact, brand reputation and image are the top two reasons why companies are investing in sustainability, Hofer says, noting that Generation Z is especially concerned about climate change.
“Gen Z consumers have the highest affinity for e-commerce driving growth now and in the future, so this forces companies to take their demands seriously,” he adds.
While consumers value the convenience of goods shipped to their homes, they also are leaning on curbside pickup. They can order online and go pick up their goods at a store.
So-called “click and collect” services combine the ease of online ordering with the immediate enjoyment of a product, Hoyler says. It also costs less than direct delivery, reduces emissions from home delivery, and requires less packaging.
Challenges to the supply chain, which are extending traditional delivery times, are likely to make the option even more popular, Hoyler says.
The option also can benefit retailers, since it requires less labor than direct delivery and can be offered in-house at a relatively low cost, Hoyler says. “As a result, operators are expected to offer greater incentives to consumers to opt for click and collect over delivery in 2022, a development that will reinforce the popularity of the service.”
“As consumer demand for click and collect services intensifies, more legacy retailers and foodservice operators are striving to provide the fulfillment option to their customers,” Hoyler says.
Enter the Metaverse
Virtual and augmented reality—or the metaverse—will spur further evolution in e-commerce. They will allow brands and consumers to recreate real-world shopping experiences in a simulated digital environment.
This doesn’t mean that all customers are ready or interested in outfitting their avatars and exploring this virtual universe, Evans says. Younger consumers will be more comfortable with the technology and with sharing information online.
The upside for brands is a deeper engagement with customers, Evans says. Companies will have to weigh the risks and benefits. “But as with any technology, those who are among the first to identify its value will reap the greatest rewards. Of course, 2022 is going to be for the front-runners. But all brands will likely need a metaverse strategy in a few years.”
Joel Berg is a freelance writer and editor based in York, Pennsylvania.
The Euromonitor webinar can be found here.