Blog: Holiday 2022 E-Commerce Trends

Each year, the Q4 holiday contribute to the busiest shopping season of the year! And this year, US holiday retail sales are expected to reach $1.3 trillion, a 3.3% increase over 2021 while holiday e-commerce is expected to grow 15.5% to $236 billion!

How can your e-commerce business take advantage of this huge revenue growth opportunity? Keeping up with the latest industry trends is a great place to start! Here are three e-commerce trends to watch for in the 2022 holiday shopping season.

Trend 1: Becoming more competitive in the growing e-commerce world

As the e-commerce landscape becomes increasingly crowded, online retailers are racing to attract and retain consumers’ attention. The result is increased costs of advertising and reduced return on ad spend (ROAS). Not only are Facebook advertising costs trending 47% higher than last year but social media advertising is becoming much less effective. Apple’s privacy updates in iOS 14.5, wherein cross-app data sharing is prohibited unless users choose to opt in, has further challenged advertisers with reaching their target audiences.

To combat these challenges, e-commerce retailers are encouraged to explore newer and less saturated marketing channels such as Snapchat and TikTok. Additionally, they can benefit by ramping up efforts to improve customer retention by offering existing customers exclusive access, loyalty discounts, and the like.

Trend 2: Going global to overcome growth bottlenecks

Total addressable market (TAM) is a common limiting factor of growth. In simple terms, this means that as businesses reach their growth limits in the domestic environment, more e-commerce brands are expanding into the global stage. Consumers are also jumping onboard with the go-global movement, with one survey reporting 76% of online shoppers have made purchases on a site outside of their own countries. The path towards globalization, however, is often littered with supply chain issues, inadequate funding, higher order minimums, and increased competition.

Luckily, there are many ways to grow a business outside of going global, particularly via product development and market penetration. By planning ahead and determining how you may be able to expand your brand for the upcoming season, e-commerce retailers can become more competitive and capture the interest of new audiences.

Trend 3: Expanding beyond conventional financing methods

It comes as no surprise that alternative financing is gaining popularity among e-commerce companies. Instead of taking out loans or trading equity for investors’ money, many businesses now prefer other means of cash injection, such as revenue-based financing (RBF) and inventory financing.

The shift, in large part, has been impacted by the following factors:

• Bank loans are both time-consuming to apply for and increasingly difficult to obtain
• Many smaller e-commerce retailers don’t have eligible assets (e.g., cars or property) to pledge as collateral for loans
• Loan repayments in fixed installments put too much pressure on cash flow

Over the last several years, a broad range of financial instruments, tailored for the needs of new-age businesses, have emerged. E-commerce owners are encouraged to familiarize themselves with these financing solutions to see whether one may suit their needs.