A recent survey of 118 digital marketing and e-commerce executives conducted by CommerceNext in partnership with CommX found that developing more meaningful customer relationships through loyalty programs is a top priority for brands. Leaning into consumers with a loyalty program – more with 52% of respondents are planning to launch or expand their current one in 2022 – was more important than investing in technologies such as crypto payments and AR/VR, the study found.
Personalization, navigation and discovery, and search in order to keep customers coming back, were also high on the to-do lists of respondents.
“There’s also a few other things happening in the industry,” said Scott Silverman, co-founder of CommerceNext. “We’re still seeing much higher levels of e-commerce activity that started during the Covid-19 pandemic and hasn’t really dropped back down. We’re also seeing significant increases in customer acquisition costs, particularly, Facebook, where the cost of ads is increasing due to more competition. They’re also less effective due to poor targeting related to the changes from Apple iOS 15.4.
“Paid social will remain the top acquisition channel in 2022, but its high costs have retailers looking for models that will generate higher ROI in 2022,” Silverman added. “Brands looking to endear their customers to them are prioritizing loyalty, experience and personalization and we’ll see retailers focusing their money and marketing efforts on either launching or expanding loyalty programs in 2022 to build better, more enduring brands.”
Among all executives surveyed, supply chain challenges continue to be viewed as the primary obstacle to achieving desired sales results, cited by 61% of respondents, while 75% of digital-first retailers surveyed said rising customer acquisition costs were their primary concern. Inflation concerns are top of mind, too, with 56% of respondents anticipating a minimum 6% increase in prices and 20% expecting an increase of over 10%.
“Acquiring customers inexpensively is over,” Silverman said. “The focus now is on delivering better, more relevant experiences to existing customers and new customers. That’s why we’re seeing so much investment in things like personalization and loyalty, and site search and navigation.”
“With a number of headwinds on the horizon for retailers in terms of the supply chain, inflation, and world events, it’s now more important than ever for brands to invest in opportunities that allow them to own their own data and build that lifetime value for customers,” said Brian Walker, Chief Strategy Officer of Bloomreach, a founding member of CommX. “The more brands prioritize the customer experience, and retention through diversified efforts beyond acquisition and paid social, the better they’ll fare throughout the year and the more sustainable their businesses will be.”
Opportunities in 2022 include added revenue streams, like international e-commerce, a clear area of focus, while brand executives’ views on social commerce are mixed, with 45% of respondents saying they are still “considering it,” but not prioritizing it.
When it comes to the Metaverse, digital marketing and e-commerce executives are taking a wait and see approach. “Every retailer wants to be innovative and try new things,” Silverman said. “It’s a matter of how much time and resources they put into that relative to other things. It’s not that they’re putting Crypto and AR/VR off completely, they’re prioritizing other things that are going to be requiring resources.”
Silverman noted that the luxury segment has taken a shine to the Metaverse, Crypto and technologies such as AR/VR. “There’s more customers in those areas in the luxury world and we’re seeing more of that there. It’s a balance of how do you try to learn something about it when you see it coming down the road, so you’re better prepared when and if it becomes a more significant trend.”
CommerceNext, a community, event series and conference for marketers at retail and direct-to-consumer brands, now in its fourth year, has grown to include webinars, virtual summits, industry research and an online community, in addition to the annual CommerceNext Summit and the CommerceNexty Awards.
“We collect demographic information,” Silverman said, adding that almost half of the respondents were enterprise size with online revenues of $100 million or more, and about 20 percent had over $500 million in e-commerce revenue.
“In terms of the business model, it was a mix between digital-first, traditional omnichannel, which would be something like a department store or wholesale manufacturer,” Silverman said. “They have a pretty strong direct business. It’s divided between those business types and Social commerce and livestreaming, and we’re seeing a lot happening on the social platforms where you can make a purchase without leaving the site.
“If you’re scrolling on Instagram and you see a retailer is offering something for sale, you can actually put your credit card in and the entire transaction can happen without going to the retailer’s site,” he added. “It all happens on the social platform. We’re seeing a lot of interest in that, given how much time people are spending on social platforms.”