Kuba Poraj-Kuczewski is the VP of Marketing at ClickBank, overseeing all marketing and education.
The post-Covid-19 retail landscape is still somewhat of a question mark, but one thing is clear: Many more businesses are selling online, and many more consumers are shopping online, on mobile and via social media.
E-commerce has truly exploded over the last 24 months, but this isn’t the only trend to be aware of. After polling more than 100 of our top-earning clients at ClickBank, we’ve uncovered the key trends that could shape how marketers build their businesses in the coming years. Today, I want to focus on two specific ways e-commerce is changing in 2022:
1. General e-commerce sales are growing faster than retail.
No matter what business you’re in, it’s important to know where things are headed. You won’t be surprised to hear e-commerce is growing, but do you know by how much?
According to eMarketer, in 2021, e-commerce retail sales reached nearly $5 trillion worldwide—and are projected to reach nearly $7 trillion by 2024. The pandemic resulted in a huge jump in e-commerce transactions as more people were forced to make the switch to purchasing and selling goods and services online. However, beyond that, we see continued inroads of e-commerce into total retail sales every single year—and it’s currently on track to account for nearly 1 in 4 sales by 2024.
So, seeing that e-commerce is not only growing but rapidly becoming a bigger piece of the retail sales pie, how should marketers respond?
The biggest takeaway is to act now if you haven’t already. If you operate a brick-and-mortar business, start thinking about ways you can get your brand, products and services in front of an audience of e-commerce buyers, such as:
• Building a dedicated website and search engine optimized blog.
• Creating optimized directory listings (i.e., a Google Business Profile).
• Launching your own online store (on your own site or via platforms like Shopify).
• Listing your products for sale on third-party marketplaces (i.e., Amazon, eBay, ClickBank, etc.).
Alternatively, if you’re looking to build a brand-new business, it’s worth thinking about starting online from day one, then look to expand to brick-and-mortar as you grow. The trend is clear: A growing percentage of your customers will find you online — or not at all.
2. Rising social commerce correlates with increased paid media costs.
Within broader e-commerce growth trends, there’s another segment seeing particularly strong traction: social commerce or s-commerce.
Social commerce refers to purchases made directly on a social platform, but it can also encompass direct response marketing via pay-per-click social ads that lead to sales elsewhere. Social commerce sales totaled $36.6 billion in 2021, but will reportedly more than double to $79.6 billion by 2025.
At ClickBank, we decided to ask our top clients what percentage of their budget they planned to spend in various areas in 2022. The result? A whopping 50% of our clients cited ad spend as their highest expenditure in 2022, with much of this money going to ads on social platforms like Facebook, Instagram and YouTube.
It’s not a coincidence that so much money is being spent on ads right now. One of ClickBank’s larger clients shared his own stats regarding Facebook ad costs: An increase of average Facebook cost per impressions from $11.50 in February 2020 to $16.89 by December 2021. That’s an increase of 47%.
Taken together, these data points are a major indicator of the strong demand for paid ads on social, one that is sure to continue as more businesses turn to the web to reach their customers.
However, with prices continuing to rise, it’s becoming more difficult for small businesses in competitive industries to participate in social ad spend. I have two tips for anyone who’s dependent on social ads:
Optimize your funnel. If costs per click continue to increase over time, you can offset these higher costs with a better offer, more effective ads and an optimized landing page to convert more viewers to buyers. It’s also worth looking at your retargeting budget to get more of your ads in front of warm prospects who already know about your product.
Diversify your traffic channels. As effective as social ads are, you don’t want to get to a point where you’re priced out and don’t have any other marketing channels to fall back on. Start investing in SEO, email, organic social, video and other paid ad channels. Newer social ad platforms like TikTok have significantly cheaper ad costs than Facebook.
In conclusion, we predict these two e-commerce trends will only continue to accelerate. We expect to see more and more people doing business online through mobile and social in the coming years, which is why it’s so important to stay on top of the rapid changes in martech. As always, you want to position your company to solve the problem of where your audience consumes media. Additionally, with the recent changes in consumer privacy, its more important than ever to build your first-party data. Hopefully, these insights provide you with the information you need to see greater business success in 2022 and beyond.