We all know the global pandemic profoundly impacted the digital consumer commerce experience. But with COVID’s final, dramatic gasps, it is easy to forget that it was merely an accelerant on a decades-long process of commerce shifting online. There may be no more gasoline to throw on this fire, but there are many hours left for it to burn brightly.
If you haven’t already, we recommend reading through Shopify’s The Future of Commerce in 2022 report. Given their broad perspective at the cutting edge of ecommerce it is a fascinating read worth every minute of your time.
Looking to the year ahead, in addition to Shopify’s perspective, below are our thoughts on where we expect the most opportunities to lie for the ecommerce brands we work with.
The greatest macroeconomic trend of our lifetimes
It seems odd to talk about stretching your supply chain to expand into international markets in 2022, given all the supply chain issues and logistics chaos of the last 18+ months. But by focusing on the pandemic (which is a short-term situation that has gone on way too long), you can easily miss the broader, underlying trend that was in motion before the pandemic, which continues today, and will continue. If you don’t know what The Great Convergence is, you are missing out on what will undoubtedly be the greatest macroeconomic trend of our lifetimes.
The Great Divergence was a special century, unique in all of human history when a set of countries dramatically grew richer than the rest of the world. This happened in the 20th century in the West (mostly the United States and Western Europe) and is a wholly unique event in history. Never before has any empire, idea, culture, or regional block so far outpaced the rest of the planet in so short a time. This was achieved through a series of innovations that can only be invented once — like electricity — that profoundly impacted health, longevity, economic prosperity, and quality of life.
This chart from The Economist explains it:
But starting about 20 years ago, a trend appeared that has since accelerated: The Great Convergence. The countries that were left behind have adopted these innovations and enjoyed the spoils: Those that were poor are now middle income, like Brazil, Russia, China, and India. Indeed, if you ask people what percent of the world they think is poor, they will often say 70%, 80%, or 90%. These, in fact, were the right figures in the 1960s and 1970s, but today, less than 10% of the world is poor1. That means in the last two decades, the world has seen billions of new consumers appear as they rise out of poverty.
While individual countries will pace differently — and some may fall behind — by and large, most countries will continue to grow at least to middle-income levels. This means that growth will continue in the form of new consumers outside of the US.
Instead of “Go West, young man,” we might say, “Go global, folks.”
Shopify continues to show why it is the leader in digital commerce:
—Robyn Larsen, International UX marketing at Shopify
Consider developing a global strategy. Focus your UX plans on making the transitions between regional markets easier, be ready for more manageable approaches to cultural differences via messaging, and ensure your checkout and cart functionalities are tailored for local buying patterns.
Evaluate headless, and bring enough water
Headless is not an effective technology strategy for every browse-and-buy experience. But the biggest technical announcement for the Shopify platform in 2021 means that 2022 is the year to seriously evaluate headless.
Last year, Shopify introduced Hydrogen and Oxygen, its opinionated framework for building headless ecommerce experiences. Hydrogen, the new headless theme — a React-based web development framework for building custom storefronts powered by the Shopify platform — combines commerce and UX design for a much more innovative and faster user experience with Oxygen, its cloud platform supporting the framework.
At TAG, we are very excited about this approach because — technical considerations aside — the fact that Shopify is promoting headless is a major commitment to supporting this unique approach that larger merchants can rely on.
In the 1980s, they used to say, “No one got fired for hiring IBM.” In 2021 the risk of headless projects failing became well known and gave marketing leaders pause. Going into 2022, if your roadmap includes headless, you might want to remember the old IBM saying and look closely at Hydrogen and Oxygen.
Go where the people are
Along with ecommerce taking a massive upswing, social media has also had its own spikes and transformations. Due to the pandemic, there were shifts in the way advertising was being created, and we believe that shift won’t stop when the pandemic slows. It’s a trend that will continue to evolve. Digital budgets have been growing exponentially, and consumers expect more out-of-the-box thinking that’s not just IRL.
TikTok, Spotify, and Google are three platforms that saw increases, and not just by consumers but also by major brands.
—Convince and Convert
And for Spotify, how many times has “Spotify Wrapped” been shared? How many apps is Google now associated with, and how many products does it have on the market? And what about the little fact that it is the most used search engine?
Shopify works to keep up with trends, but our hope for 2022 is even more direct integrations and features for a broader range of marketing and advertising platforms.
Watch this space for more.
It’s the way of the future (apparently)
So you know that old investment advice that when your taxi driver is doing it, it’s time to get out? That “it” could be flipping houses or buying gold or investing in oil futures, but whatever “it” is, once it’s hit the mainstream, that is when you should panic because the bubble is probably peaking.
So there is this artist, Beeple, who recently sold a PNG file anyone in the world can have a copy of for free for 69 million dollars via a Christie’s auction. Yeah, that Christie’s. NFTs are raging right now, and everyone seems to hold one of three positions on the issue: 1) it’s a bubble that will pop, 2) it’s the future, or 3) WTF are NFTs?
So, where are NFTs going in 2022 and beyond? I believe the answer to that question is contained in a remarkable, out-of-print, misunderstood book published more than 30 years ago called Megamistakes. This book studies predictions by scientists, business leaders, politicians, and academics. It shows through analysis that only one kind of prediction technique ends up having any success at accuracy: Whatever 20-year-olds believe in today will be a great business in a decade.
And younger people today believe in cryptocurrency, NFTs, and the value of possessions in the digital world (it’s what they grew up with, after all). Each generation tends to believe for the rest of their lives what they believed in when they were young.
Shopify is well-positioned with NFTs already, but watch for major opportunities to leverage crypto wallets and payments in 2022 to further your brand building and adoption.
“Who would buy a $50,000 product for work from a supplier with their phone?”
Turns out anyone in management under 45.
We have talked a lot about the coming B2B wave here, and we expect 2022 to be a big year for this space. The rewards for B2B brands that move fast and effectively are huge:
While Shopify is gearing up to release its long-teased B2B features in 2022, do not expect it to replicate existing, legacy approaches to B2B.
For Shopify, 2021 was the final nail in the coffin for native wholesale functionality. The company said nothing about enhancing the wholesale channel, invoicing, draft orders, or related scripting. Merchants would be wise to be hyper-aware that Shopify isn't investing in anything traditionally B2B. We can infer a few things from this. First, many of the announced enhancements, including checkout extensions, will help shift functionality that wholesalers want and need out into the app ecosystem. Second, Shopify is moving away from “Net Terms”: There are so many online payment methods and options now, like accelerated, delayed, installments, and splits, that the platform is building a future where the concept of "Net Terms" is moot. Invoicing suddenly becomes unnecessary because the info is available online, in real-time, anywhere.
Merchants in the B2B space need to be ready to move aggressively in 2022 to create direct-to-consumer-like digital commerce experiences. You don’t want to find out from a competitor (that you probably will have never heard of) that, contrary to your thinking, your buyers actually do want a D2C ecommerce experience.
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