The rapid transformations that retail has experienced over the past two years have been largely due to technology. This trend continues in 2022, amplified by marketplaces, mobile, and subscription retail. All of these are likely to create more challenges for retail and require swift answers.
Marketplaces
First of all, marketplaces have increased their dominance in ecommerce. Nearly three quarters (75%) of UK shoppers say that marketplaces offer the best way to shop online. They are the preferred shopping destination for more than half of those who shop exclusively.
Ecommerce has seen a dramatic shift in the marketplaces’ popularity, as they provide convenience, choice and affordable pricing. For retailers it’s just the questio when they will start selling on marketplaces. Consumers are following are already there and this kind online shopping will become increasingly the norm.
Mirakl conducted a global survey of 9,000 shoppers, 1,000 of which were from the UK, to determine that two-thirds of these consumers are now more likely to shop on ecommerce websites with online marketplaces.
Research shows that marketplace adoption is not temporary. After significant gains in the early days after the Covid-19 pandemic, the marketplaces have maintained their position in the eCommerce landscape. In 2019, 39% of UK shoppers said that they shop exclusively or heavily on marketplaces. This number rose to 56% in 2020 and remained steady in 2021.
UK respondents reported that 41% of their online shopping happens now on marketplaces. More than a third (34%) of those surveyed said their use of marketplaces has increased over the past 12 months despite the reopening traditional retail outlets. The vast majority of UK consumers (94%) expect to use marketplaces at the current rate, or even more.
The survey found that consumers prefer marketplaces to traditional eCommerce sites, which offer products only from one retailer. According to the report, online shopping is increasing and marketplaces account for a greater percentage of consumers’ overall spending. “Power shoppers”, high-value customers who shop online at least once per week, say this is because they trust markerplaces and have more convenience.
The report further revealed that 84% of UK customers expect their packages to arrive within 3-5 days. 32%, however, expect delivery within 1-2 days. This is a result of fierce competition from online giants.
The majority of UK respondents will conduct research on a seller before purchasing products from them via an online marketplace. This includes checking out reviews (73%). This shows the importance of sellers maintaining a high level of customer service. UK shoppers are most likely to be put off by negative reviews.
Nearly half (44%) of UK shoppers believe they are more likely than others to buy a product from third-party sellers on the website of a trusted retailer. 64% of UK shoppers enjoy being introduced through brands they already trust. A staggering 72% of Brits trust online marketplaces for brands they have faith in. This is a testament to the power of building strong relationships.
Mobile
Secondly, mobile is now the dominant way that consumers access the internet and shop online. Another study found that shoppers spent over 100 billion hours shopping on shopping apps in 2021. This is an 18% increase from the previous year. Here, big brands, fast fashion and social shopping are leading the way.
Mobile’s convenience and accessibility are complemented by the benefits of marketplaces consumers find so appealing – these two combined can provide a powerful combination that can offer conveniences previously unimagined.
Delivery is a crucial ecommerce battleground. Consumers demand delivery, despite the fact that they are well aware of the logistics problems facing the UK. The tie-up between mobile, marketplaces, and rapid delivery only adds to the benefits of the mobile-marketplace model.
Mobile commerce saw the greatest growth in Indonesia, Singapore, and Brazil between 2021 and 2023. These markets experienced growth rates of 52%, 48%, and 45%, respectively.
According to the report, APAC-based shopping apps have seen an increase in international downloads and have shifted market share to other non-native brands in many countries.
Overseas publishers saw a rise in downloads across the Americas. The US’s mobile shopping market was dominated by US-based brands with 66% market share, while non-domestic brands have a 34% market share.
However, US-based apps still lost 5% of their downloads to foreign publishers. This was driven by China and Canada, Australia, Japan, and Australia. Brazil’s Overseas HQ-ed apps held 52% of all shopping app downloadings in 2021. This is an increase of 11% YoY.
Prime Day has had a significant impact on mobile commerce in 2021. But it was not just Amazon. Competing “Amazon Prime Day” events boosted sessions growth by 20% for Walmart & smaller Savvy Players.
Walmart hosted its first Prime Day event in 2020, the “Big Save Event”. This event ran concurrently with Amazon Prime Day’s 10/13-10/14 event. Due to its success, Walmart held “Deals for Days”, a parallel event to Prime Day in 2021. It saw 20% more sessions than last year. Target also announced Target Deal Days and Chewy held their Blue Box Event.
Fast delivery was one of the top things consumers searched for in apps. Turkish delivery company Getir had nearly 7 million downloads in Q4 2021 worldwide, an increase of 105% over Q1 – driven largely by international expansion.
The year saw social media apps be stars in all areas, from entertainment to retail and everything in between. TikTok was the standout winner among top five social media apps in terms of per user engagement, with 75% growth. It had a remarkable year in 2021 after a already a record-breaking 2020.
Avatar apps are also on the rise, creating new social experiences that will be available in 2022. Downloads for three selected avatar social apps, Litmatch, REALITY By Wright Flyer, and ZEPETO, grew 160% YoY. Litmatch emphasizes the use of simple avatars and matching with friends — which highlights the overlap in growing demand for avatar-based apps even without a metaverse component. Litmatch saw its downloads increase by 405% YoY amid a surge in demand.
Subscription Retail
Subscription retail is the third major trend and is expected to increase significantly in 2022. This will be accompanied by a rise of physical goods selling. This is combined with mobile and marketplace use, which allows for rapid delivery. A whole new range of retail services will likely be created this year.
As the subscription model gains momentum in music and video, it is expected that the global economy will grow to $275 billion by 2022.
In particular, digital subscriptions, which include music, video streaming and spoken word, will make up 39% of the global subscription market value by 2022. The adoption of new devices, like smart speakers, will increase, as well as increased access to streaming content.
Market forecasts for 2022-2026 also indicate that there will be an increase in user demand for reliable, regular deliveries of key items owing to the Covid-19 pandemic. This, along with the support for automation in subscription services, is key reason for the increased uptake of subscription services. Here, alternative payment methods are key to attracting subscribers to subscription-based services. Businesses need to offer multiple payment options, such as Open Banking and digital wallets to increase convenience for the end user. Providers must focus on the most common alternative payment methods in their target country in order to minimize payment process friction and reduce churn.
Retail is a business where the customer is the king. They want it fast, seamless, and cheap. And they want a great experience. You only need to meet these demands. Get in touch with us and learn how your business can navigate in the new digital landscape.
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