Challenges of E-Commerce.

Challenges of E-Commerce. 

1. Continued Uncertainty

• One of the main challenges set to plague e-commerce is the heightened level of uncertainty that still awaits us. While more and more people are indeed shopping online, the real-world elements of e-commerce are still very much affected by the pandemic.

• Shipping difficulties that may cause customer dissatisfaction, social distancing measures may continue to cause fulfillment constraints, and the fact that shoppers’ disposable incomes have shrunk will most likely continue to plague the minds of e-commerce business owners.

2. Increased Expectations

• The mere fact that shoppers have moved from in-store to online stores means they’ve honed their tastes and demands like never before. What you could once reasonably get away with is no longer the case.

• Crucially, modern-day consumers want:

- free returns and free shipping

- reliable customer service

- intuitive and responsive websites

- a large variety of payment methods

- a personalized shopping experience

- Providing all of these elements is costly, demanding, and it can lead to all kinds of disruptions in the e-commerce workflow.

3. Increased Competition

• More brands that never before had an online presence have started building their e-commerce stores. New players are descending on the market every day, and it’s becoming increasingly difficult to keep up.

• You need to stay sharp, continually keep improving your offer and your marketing assets. To get customers to choose you over your competitors, you’ll also need to improve the level of personalization you offer.

• Even the budgets that are used to cut it need to be increased at times. That’s especially in the advertising department, as the cost of clicks and impressions goes up.

4. Item Tracking Difficulties

• Currently, countries around the world are slackening or tightening their coronavirus measures at different rates. Suppliers are postponing delivery dates due to their own difficulties. As a result, there’s an increased demand for fast and secure shipping. And it has never been more difficult to keep an eye on your stock.

• Whether you have your own storage facility or not, tracking your items by serial or lot number can help you ensure the oldest items are being shipped out first. It’s also a great way to stay on top of quality and customer complaints. It can significantly help you improve the quality of the goods you’re selling over time.

5. Data Security Threats

• People are spending so much more of their time and money online. Consequently, the rise in cybercrime and cyber threats come as no surprise.

• With the rising threat of data theft and security breaches comes the need to perfect your cybersecurity game. And that’s often a costly and complex process.

• Backing up your data is always recommended, but it’s also smart to invest in more secure servers and even safer checkout processes. Above all else, customers want to know their personal and financial information is safe with you.

6. Customer Retention Challenges

• Customer retention has always been more valuable than lead generation. However, in a world where the options are practically unlimited, it has become incredibly difficult to ensure a shopper becomes even a repeat customer, let alone a regular one.

• Offering special loyalty perks, from discounts and tailor-made offers to the option of shopping a new arrival first, can all go a long way to ensuring a customer remains loyal. However, make sure you are rewarding actual loyalty rather than just a specific number of purchases or a specific amount spent.

                                                              OR,

10 Biggest Ecommerce Challenges in 2021 & Solutions to solve them

1. Cyber & Data Security

• When it comes to eCommerce, one of the biggest challenges faced is security breaches. There is a lot of information/data that is involved while dealing with eCommerce and a technical issue with data can cause severe damage to the retailer’s daily operations as well as brand image. 

• Solution: Be vigilant and always back up your data. Post that, you can install security plugins onto your website to prevent it from getting hacked. There are several plugins out there, pick one that works best for your eCommerce website.

2. Online Identity Verification

• When a shopper visits an eCommerce site, how would the retailer know if the person is who they say they are? Is the shopper entering accurate information? Is the shopper genuinely interested in the eCommerce products?

• If you do not have the accurate details or information, how do you proceed? Well, it does become tricky. The solution would be to invest in online identity verification.

• Solution: There are different ways to incorporate online identity verification. Some examples include biometrics, AI, single sign-on, one-time password, two-factor authentication, and so on.

3. Attracting the Perfect Customer

• Shoppers have a myriad of options to choose from these days. If they are looking to buy a handbag, they do some thorough research before finalizing one. If shoppers have several options, how do you make sure they pick you? How do you go about finding that perfect customer that wants your product, at your rate and to the places you can ship?

• Solution: Partner with companies that help you target your customers. Digital marketing is preferred over traditional marketing because it can target your ideal customer. While this might not happen overnight, with A/B testing, fine-tuning, and analysis – your products could be showing up to potential customers on different social media platforms.

4. Customer Experience

• Customer experience or user experience is key to a successful eCommerce website. Shoppers expect a similar if not the same experience as one they would get in a brick and mortar store. The flow of the website, the segmentation of the website, and the retail personalization of products based on the shopper’s preferences are imperative. 

• Solution: There are several ways to improve the user experience. The most important would be to have a clean and simple website so that shoppers can navigate through it easily. The next point would be to have clear CTAs (call to action) so that the shopper knows exactly what to do. Here is a post that shows you 10 ways to improve user experience.

5. Customer Loyalty

• Here are two facts that show the importance of customer loyalty: (a) It can cost up to 5 times more to acquire a new customer than retaining an existing one and (b) the success rate of selling to a current customer is 60-70% compared to only 5-20% success rate of selling to a new customer.

• The above two facts are a testament to how important customer retention or loyalty is. Once a customer makes a purchase or utilizes a service from a retailer, they have to make sure that they keep this customer for life. But how is this possible?

• Solution: These are a few different methods that can be used to retain customers. The first would be to have excellent customer service – a customer is happy to have purchased a great product, but they are ecstatic when the customer service is on point. The next step is to keep in touch with the customer via a method that they like – be it an email, SMS, or blog post – be sure to find out what works best for your customer. The last point would be to let them know about new products, sales promotions, and special coupon codes for being such loyal customers.

6. Converting Shoppers into Paying Customers

• One of the biggest e-commerce challenges is to convert visitors into paying customers. An eCommerce website might have a lot of traffic, a lot of clicks, and impressions but they aren’t making the sales they anticipated. What can they do to get more sales?

• Solution: The first and foremost would be to understand why your shoppers aren’t converting – are you targeting the right audience? Is your mobile website working seamlessly? Do your online platforms face technical challenges all the time? Does your customer base trust you? Do you personalize your website for your customers? Always think from a shopper’s perspective and see if you are doing everything possible to make them pay customers. 

7. Competition & Competitor Analysis

• Have you heard of a Jam Experiment? Well, it has quite a controversial conclusion, which is – the less you offer customers the more likely they are to actually purchase something. A lot of people these days are fatigued by all the options that are out there. A simple search for something like headphones will give you thousands of options – how does one make a choice? 

• From a retailer’s standpoint, how do they stand out from the crowd? How do they bring shoppers to their website, instead of buying a similar product from their competitors?

• Solution: Always do a thorough analysis of your competitors. Find out what products they are selling, how they are generating leads, and how they keep in touch with their customers. The next step would be to make sure you stand out – be it the colors you use, the topnotch functionality of your website, or an amazing user experience. And finally, offer services or products that are unique and relevant to your customer base.

8. Price & Shipping

• We have all heard of customers that prefer to purchase products from places that have free shipping. eCommerce giants like Amazon provide such attractive shipping deals that customers seldom want to look at other places. How does one bring down costs for shipping? 

• Solution: While all eCommerce sites cannot completely get rid of shipping costs, always look to find options that work for your customer base. Would a subscription reduce the cost of shipping? Would a certain time of the month give them lower shipping costs? Or is there a carrier that is reliable but offers a cheaper rate? Be sure to do your research and find the best possible solution for your shoppers.

9. Product Return & Refund Policies

• According to ComScore, more than 60% of online shoppers say that they look at a retailer’s return policy before making a purchase. When an eCommerce site says “no returns or refunds” it makes a shopper nervous and less likely to trust the retailer. When shopping online, customers want the flexibility of making a mistake that doesn’t cost them. 

• Solution: Customer satisfaction is the most important factor for any retailer. Therefore having a flexible return and refund policy not only helps with customer satisfaction it also helps with customers making purchases without being nervous. 

10. Choosing the Right Technology/Partners To Fix Your eCommerce Challenges

• Choosing the right technology or partner will make or break your business. A retailer’s growth might be stunted because their technology is limiting them or because they have hired the wrong agency to help them manage their projects. 

• There are a lot of aspects that need to be in place for a successful retail business, but a good technology foundation is crucial. 

• Solution: Partner with Vue.ai, a unified Visual A.I. platform that is redesigning the future of retail commerce to fix all your eCommerce challenges. Using image recognition and data science, Vue helps retailers generate product, and customer intelligence, and combine these with market insights, to power growth.

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7 Most Common eCommerce Problems And How to Solve Them

These are some of the biggest problems online store owners might be facing in 2021:

1) Online Identity Verification

• When a visitor registers on an eCommerce website, the information they enter may not be genuine – therefore you cannot know if they are genuinely interested in purchasing.
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• For example, cash-on-delivery purchases made with a fake phone number and address can result in massive losses in revenue. 
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• That’s why it’s important to perform online identity verification for each prospective customer.

The solution: 

• Look for signs of suspicious activity. This can be an unusually high volume of orders or zip codes that do not match with a state or a city. Always send an automated verification link for customers that sign up to validate that the customer is genuine.

• Make an automated call for a cash-on-delivery purchase. Then, ask the buyer to validate the delivery address.

• Use software solutions. These solutions should identify fraudulent attempts by using multi-layered authentication. These programs have features such as SSN verification, identity checks, and instant authentication, making it possible for your eCommerce business to stay ahead of fraudsters.

2) Cybersecurity Issues

• Cyberattacks can compromise the security of your eCommerce website by infecting it with viruses and, what’s even worse, they may compromise the security of your registered customers’ data.

• Hackers can potentially gain access to this confidential data, including credit card details. 

• This scenario is one of the greatest issues to overcome in the eCommerce business and it is certainly one of the biggest nightmares of every eCommerce owner.

The solution:

• Manage your own servers. Make sure your eCommerce website is hosted on a standalone server dedicated only to you. Sharing the same space on one server with multiple other sites is risky; if some of those websites get hacked, the malware files may infect the entire server – including your store.

• Make regular data backups. Creating a backup of your entire database and all your files is essential in the eCommerce business. You can’t go wrong with the frequency of doing this, although the general rule of thumbs is – the bigger the website, the more often the backup should be performed. At Digital Silk, we run daily backups of all the websites we maintain.

• Install security plugins and safety components. These are specially designed to prevent hack attacks. There is a great online market of security plugins for different systems and platforms that include firewalls, two-factor authentications, and more.

• Update your eCommerce platform regularly. Whatever platform or CMS your eCommerce website uses, make sure you update it regularly with official patches, plugins, and other software developed by its creators. Their teams work actively on identifying current threats and create solutions to stop them in their tracks.

3)  Shopping Cart Abandonment

• One of the biggest problems eCommerce businesses are facing – no matter their size – is shopping cart abandonment. 

• Statistics show that online shoppers abandon their shopping carts 68% of the time and some stores can see abandonment rates as high as 80%.

• So, how do you cut down on cart abandonment?

The solution:

• Redesign your shopping cart. Make sure there are no bugs or needlessly long and tedious processes such as form filling. One of the most common reasons for cart abandonment is tedious checkout processes.

• Nurture your customers via live chat. Having a support agent that will proactively reach out to and engage with a buying customer during key stages of their buyer journey can prevent them from leaving without purchasing.

• Optimize for mobile. 70% of global online sales are made via mobile devices. Faster loading times, optimized images, and disabled pop-ups on mobile sites mean fewer obstacles for customers to finish their purchase.

• Use retargeting marketing. Retargeting is a strategy of marketing products online to people who have already visited your eShop and looked at said products. Customers that have been retargeted show up to 50%-60% likelihood of converting.  

• Send email reminders. If your eCommerce website requires users to register to make purchases, you likely have their email address in your database. Create an elaborate email campaign reminding them that they have not completed their purchase. Some platforms like Shopify have built-in email reminders.

 4) Nurturing Customer Loyalty

• Customer loyalty is a very fickle thing, even with the best-designed eCommerce websites with a huge assortment of products and smooth functionalities. 

• Without customer loyalty, any business may struggle as acquiring a new customer is five times more costly than retaining an existing one. 

• Increasing customer retention rates by 5% can increase profits by 25% to 95%.

• Customer loyalty is a matter of brand integrity and mutual trust between a seller and a customer. 

• Since there is no face-to-face interaction like in a retail store, the development of trust and loyalty takes more time and effort in eCommerce.

The solution:

• “Your culture is your brand.” This saying hits home on so many levels. Customer loyalty is the result of great customer service, so you need to make sure your customers are satisfied with the entire process of purchasing online, from browsing your store casually, to ordering online and shipping. Nurture your customer service according to a competitive advantage you have over other online retailers.

• Again – add a live chat. Having a live customer support specialist that can reply promptly to your customers’ queries in a kind and reassuring way increases trust and makes your brand trustworthy and reliable in the eyes of shoppers.

• Be transparent. Display your address, phone number, customer testimonials and reviews and pictures, and relevant info of your staff. This unmasks your eCommerce business and gives it a humane dimension that makes it no longer anonymous.

• Use loyalty programs. Multi-tiered schemes that reward returning customers with points, discounts, and coupons are a great customer service tool that fosters their loyalty and keeps them coming back. 

• Publish blog articles. Content marketing such as informative blog posts relevant to your audience builds trust and boosts your credibility.

5)  Product Returns And Refunds

• Over 60% of online shoppers look at a shop’s return policy before making a purchase. 

• 48% of customers would shop more if stores offered less complicated returns and an inconvenient returns policy deters 80% of customers.

• Furthermore, 89% of online shoppers have made a return at one point during their shopping experience.

• This presents a challenge for online retailers: how can you give your customers peace of mind knowing they can return products they aren’t satisfied with, without potentially damaging the business through losses in shipment and reputation?

The solution:

• Be transparent about your return and refund policies. Make sure customers can find detailed info on this very easily in your Terms & Conditions and FAQs pages and make sure the policies are clear.

• Avoid imperative phrases in your policy wording. Phrases like “you are required” and “you must” can sound harsh and may intimidate customers. Try to soften your language in return policies. 

• Give options. Consider providing various methods of shipping, payments, and refunds as well as certain bonuses such as coupons and discounts for people dissatisfied with their purchase. 

• Remember that returns and refunds are a part of great customer service. Keep in mind that customer service is a reflection of your brand and a gateway to customer loyalty. 

 6) Competition From Manufacturers And Retailers

• Manufacturers and retailers that online stores buy products from in bulk eventually begin selling their goods directly to customers.

• This way, the company that used to be your partner becomes your competitor, which only worsens if they create their own distributors. 

• You can’t prevent manufacturers from selling directly to customers – so, how can you minimize the problem?

The solution:

• Prioritize partnering with manufacturers less likely to sell products directly. The surest way for your retail partner to not become your competitor is to team up with smaller brands or brands focused on producing and delivering goods to shops rather than selling them directly.

• Offer your products at lower prices or with additional benefits. Such maneuvers help boost sales of products that the manufacturer chooses to sell themselves directly.

• Forge a contract with a language preventing this from happening. When signing a contract with a manufacturer, include a statement that would restrict them from selling a certain product directly to a customer.

 7) Providing Omnichannel Experience

• Knowing that multi-channel shoppers spend three times more than single-channel shoppers is a strong incentive to overcome this eCommerce challenge.

• In a world with desktop and mobile devices, official eCommerce stores, live chats, forums, Facebook, Instagram, and other social media pages, the modern shopper has a big number of touch-points they can reach out through.

• This creates an imperative for retailers: to adopt an omnichannel customer strategy. The alternative is lagging behind competitors and eventually being completely left behind. 

The solution:

• Identify the most important channels for your customers and optimize them. Optimize channels such as live chat, video calls, help centers, in-app messaging, and others through which support clients should contact customers. This optimization means the personalization of messages and one-on-one interaction.

• Be consistent and keep track. By keeping track of customer interactions and conversations, you should be able to direct conversations based on their conversation history and reply to them contextually.