2. Rising acquisition costs force brands to
foster long-term relationships with their
customers
Direct-to-consumer competition is rising: Although retail business doors have reopened, ecommerce sales aren’t
slowing, resulting in an influx of DTC brands competing for customer attention.
Advertising costs are skyrocketing across platforms: Digital advertising costs are eating up marketing budgets, putting
performance marketing–heavy customer acquisition models in jeopardy.
Brand building is helping attract and retain customers: Businesses are overcoming the competition by investing in brand
building, which increases customer lifetime value, boosts conversion rates in the short term, and attracts out-of-market
buyers in the long term.
3. Fewer barriers to
entry mean more
online retailers
Advancements in technology and the growth of available
marketplaces have made it easier than ever to buy and sell online.
The ecommerce industry is expected to grow by almost $11
trillion between 2021 and 2025. As businesses came online during
the COVID-19 pandemic, the global trend toward digitization
surged ahead at lightning speed. Even as regions begin to reopen,
ecommerce growth keeps climbing. Global ecommerce sales are
expected to reach $5 trillion in 2022, and $6 trillion by 2024.
Merchants continue to follow consumer demand online, flocking
to ecommerce in record numbers. Online stores are popping up
daily, with an estimated 12–24 million ecommerce sites across the
globe. This ecommerce growth means more brands competing for
customers. As a result, digital advertising is more costly and less
lucrative than ever before.
4. Death of third-
party cookies
forces brands to
rethink
personalization
Consumers are demanding personalization
Consumers continue to demand personalized shopping experiences,
even as regulations make data tracking harder, and the biggest
players phase out support for third-party cookies.
Personalization isn’t a magic bullet for customer engagement
Brands innovate with first-party data, but personalization isn’t enough
to create long-term relationships with customers.
Brand communities are building customer loyalty
Brand communities become key to building trust and brand equity and
improving customer retention.
5. New
commercial
opportunities
emerge on the
biggest social
platforms
Ecommerce is migrating to social media platforms
Ecommerce activity is congregating on social media
platforms, from brand marketing to customer service to
shoppable advertising.
Social platforms are presenting new ways to engage
customers
Diverse platforms and rapidly evolving features lend
themselves to unique customer experiences, encouraging
brands to reimagine consumer engagement.
Video is making social commerce more sociable
Video is key to unlocking the power of social commerce.
Leading brands are focusing on social-first approaches
like behind-the-scenes livestreams, video consultations,
and personalized product recommendations.
6. Social Commerce is on the Rise
Sales through social media channels around the world are expected to nearly triple by
2025.
Although about 30% of internet users in the United States already make purchases directly
within social platforms, China is the clear global leader. Almost half of China’s internet
users shop on social networks, generating more than 10 times the sales of the United
States.
