In the last two years, the pandemic and work-from-home scenarios have resulted in an unprecedented start of e-commerce businesses and their subsequent challenges. While a drastic drop in retail sales has been recorded, a massive boom in everything shifting to digital has been recorded too. In the United Kingdom alone, the Office for National Statistics has reported a 5.1% drop in physical retail sales due to covid-19 – the highest ever drop since its inception 30 years ago.
By 2040, it is estimated that 95% of purchases will be made online, this has business owners re-strategizing their online business schemes and trying to break their way through by finding solutions for expected problems.
Let us take a look at 25 challenges of e-commerce business that a business owner can encounter:
- Building quality website
It is highly crucial to build intuitive, catchy, and responsive websites to attract customers and retain them. The flow and segmentation of websites, improving user experience, creating a personalized experience for the shopper are a must. With innumerable e-commerce businesses cropping up, a website that cannot target its potential customers will inevitably face loss.
- Product sourcing
It is often said that it is when buying the stock, that you make your profit. It’s not when you make a sale. Hence, great product sourcing could be considered the stepping stone to making any online business work.
- Shipping and delivery of products
Shipping difficulties may cause customer dissatisfaction and is a great challenge, especially in post-covid times. A great number of logistics challenges for online business retailers include tracking online orders, controlling overseas shipping costs, scaling logistics, etc.
With the reduction in average shoppers’ disposable incomes, most e-commerce business owners are struggling to convert visitors into paying customers.
But with all the options, it also means customers are choosy, have impeccable tastes and demands like never before. Creating a niche-based online business is thereby important.
It affects areas such as recruitment, marketing, and advertising, among many others. Technology also enables enhanced search, customization, and personalization, which are fast becoming “must-have” capabilities for e-commerce success.
- Search engine rankings
This is very significant in upping your brand name to reach Google’s first page and thereby millions of users.
Search engine rankings are dumped due to multiple reasons like weak product descriptions, no keyword optimization, not including user reviews, poorly planned sites, etc
It has become highly difficult to keep an eye on warehousing and stocks. A reliable storage facility and stocks stamped with serial numbers can ensure a smooth transition from the warehouse to customers. The oldest items can be shipped out earlier and errors kept in check.
- Inventory feed
Supply chain complexity, inadequately and inefficient employees, infrequent stock audits, etc. all pose a challenge.
- Order fulfillment
Outsourcing order fulfillment to a third-party company or agency whenever possible can increase efficiency and reduce workload and stress for a small business owner. Nowadays, social distancing protocols cause fulfillment constraints too.
- Digital advertising is getting pricier
It can cost up to 5 times more to acquire a new customer than retain an existing one, and hence customer retention strategies are very significant.
- Rise of influencer marketing
Influencer marketing may generate excellent returns, but it poses problems. Understanding the various influencers, operating by self or using agencies, finding the best ones to represent the brand, convincing them to work for you, recording their activity and measuring their impact, etc.
- Risk of finding e-commerce logistics partner
A business owner’s success and growth may be unnecessarily stunted with the wrong choice of an e-commerce partner or agency. Investing in a reputed, verifiable, and competent partner can help avoid numerous setbacks.
- Cash on delivery and returns management
When a product is returned, a business suffers great losses, especially during CoD transactions. Passing on the collection back to the business is another extra layer of the transaction, thereby complicating the supply chain process.
- Customer service
Customer experience or user experience is key to a successful eCommerce website. The success rate of selling to a current customer is 60-70% compared to only a 5-20% success rate of selling to a new customer.
This in itself proves that giving out splendid customer service and keeping in touch with them for customer loyalty is extremely valuable.
- Raising funds to scale
50% of all startups won’t survive their first 5 years, and lack of access to capital is cited as a major barrier to e-commerce success.
- Shipping cost
Who doesn’t love and chase free or minimal shipping charges? The demand for fast and secure shipping never dies. Especially in the post-covid era, with countries around the world slackening or tightening their coronavirus measures at different rates, the spotlight is on this particular e-commerce challenge.
But it is not practically possible or profitable for every business to come up with such a free-and-fast strategy.
Finding options for your customer base with good research and planning will go a long way in putting your business on the top.
With the world shifting to digital and spending most of their time and money online, it is not surprising that there is a rise in cybercrime and issues with data security. A breach or leak or data theft in any of the customers’ data can tarnish the brand image and cause many legal concerns.
Solutions would include backing up data, installing security plug-ins, having effective verification processes, and overall being vigilant. Customers’ personal and financial information safety must be assured and maintained.
- Website traffic and visitor conversion
Customer retention has always been more valuable than lead generation. A business could be receiving lots of traffic but few paying customers.
A lot of incentives can be implemented to ensure customer loyalty such as offering loyalty perks, keeping in touch via emails/instant messages, special discounts, or tailor-made offers.
- Return and refund policy
More than 60% of online shoppers look at a retailer’s return and refund policy before making a purchase, according to Comscore.
Customers are wary of purchasing from websites that do not give them the freedom to return or refund their purchases. A flexible return and refund policy help combat this issue.
- Shopping cart abandonment
This is a huge challenge that even e-commerce giants aren’t immune to. One way to avoid this would be to do away with tedious checkout and long sign-in procedures.
- Ecommerce automation
Ecommerce software must be flawless and robust. There is no room for errors here and rigorous, repeated testing must be implemented.
- Getting advanced technological featured websites: AI-powered website set up
This is highly relevant and recommended for Online Identity Verification. 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.
- Payment gateway setup
Payment gateways have long acquired a negative image within the e-commerce value chain because of their exorbitantly high rates, hidden fee game, unfair treatment on disputes and chargebacks, recurring revenue, etc
- Legal issues
Some of these are privacy and copyright protection issues, trademark security problems, transaction issues, incorporation problems, etc
- Manpower sourcing
With the recent infection spread, e-commerce manpower has faced a major crunch too.
Some other challenges include the requirement of knowledge, experience, and skill, lack of financial resources, initial and recurring investments, competition, marketing, and promotion.
The unexpected events of 2020 have propelled e-commerce, and online businesses still struggle with the challenges that it poses.
Asheghar Digimentors’ ONLINE SHOPPING MALL is a multi-store project that aims to combat these issues. The Online Shopping Mall is a platform for digital mentorship and a one-stop e-commerce platform in Qatar.
An online destination catering to a vast number of online shop owners and an integrated online shopping mall seems to be the solution for the e-commerce challenges.