New Year, New You! Have you heard that a lot this month? Generally, January is a time for reflection and relaxation following the busy holiday season. However, while the frequency of trips to the gym to meet personal resolutions will begin to decline in the coming weeks, the implementation of new business resolutions has just begun. During the first month of the year, much discussion typically takes place regarding what the remainder of the year may bring including what businesses should or should not do in 2022. In this article, we will review the most relevant industry news for your business over the past month. Let’s get started.
It is no secret that online commerce has been growing at a rapid rate over the last two years. What we are a little unsure about is the growth of individual selling platforms versus the growth of large marketplaces. Target, for example, is enhancing its personal selling platform and providing direct-to-consumer e-commerce offerings. Other companies are looking to use marketplaces to drive sales. Internet Retailing says, “Across all of these established categories, the report estimates that marketplace growth will continue at 15% per year in the West and become as large as direct e-commerce by 2025 when it will account for c.45-50% of online spend.” The marketplace model is particularly great for consumers. It is convenient, inexpensive, and offers a wide variety of choices. A marketplace model may be appealing to businesses because it enables them to reach a wider audience and streamline their logistics. The growth of marketplaces is a great opportunity for the industry which is projected to reach $729.1 billion globally by 2026.
Another projection to look for in 2022 is the growth of online payment systems. Also known as Point of Sale (POS), will grow due to the value of global e-commerce payment transactions is on track to exceed $7.5 trillion by 2026. According to Juniper Research this represents growth of 55% over the next five years. Majority of this projected growth can be attributed to retailers offering an omnichannel experience. Through an omnichannel approach, e-commerce spending will increase over time, subsequently increasing consumer spending. POS systems offer a great opportunity for e-commerce businesses.
For some time now, social commerce has been a hot topic in industry news. Recently, many social media companies have made shopping a key part of their platforms. Through live-selling and clickable images that direct consumers directly to checkout, social media is becoming more and more focused on online sales. In January, Forbes put out an article titled, “15 Simple Ways to Tie a Social Mission to Your E-commerce Business.” Consumers want to shop from companies who are making a difference in the world. By combining your social mission with your social commerce you are driving up sales and creating a loyal brand following.
Companies Fighting for Warehouse Space:
In addition to the residential market, commercial real estate is on the rise as well. Companies can’t seem to buy or make warehouses fast enough. In the UK, around 50.7 million sq ft of large distribution warehouses were sold in 2021 which was a 3.6% increase year over year. Though this grow was specific to the United Kingdom, the US and the rest of the world is strapped for places to store and pack their goods. BCC News reported the mass increase in warehouses being bought in Asia, while the St. Louis Business Journal talked this month about industrial space in the US being almost completely sold out. “Nationally, the demand for space was up 21% year-over-year in 2021, according to JLL’s ninth annual U.S. Industrial Demand Study. Logistics and parcel delivery now make up nearly a fifth of the demand for industrial space, but the demand from e-commerce, traditional retail, food and beverage and construction companies also is on the rise.” the article stated.
A New Way to Shop in 2022:
In early January, an article from Fast Company stated how businesses are working on ways to shop better. Among thereof their points were investments in texting to shop, buy buttons that eliminate the need for card information, and robotic cashiers are going to replace human check-outs. Although these ideas and processes are not new to e-commerce, they will be the new standard by 2022. Some might be hesitant of these changes, but by focusing on these trends, businesses can stay ahead of the curve in the new year. We will have to wait and see how these changes evolve going forward.