When you need something, most people’s initial instinct is to check what is on the internet. Over the years, the development and expansion of e-commerce across the globe are immense. Thousands of companies and organizations raced to keep up with the competition.
We will tackle the top ten challenges that online merchants need to face every day. Let us first briefly look at how e-commerce or online selling works to have a deeper understanding.
e-Commerce: The Future of Selling
There is no need for consumers, both potential and actual, to take a trip to your physical store to buy your products or avail of your services. The advent of digitalization paved the way for a total transformation for the retail and merchandise industry. While the exchange of goods with a specific amount of money is still the same, the environment now shifted online. Moreover, an online merchant can utilize multiple channels to market and sell goods. Popular choices are marketplaces, such as Amazon and social media platforms, such as Facebook and Instagram.
While there are tons of benefits, it also has its fair share of challenges that online merchants have to overcome. Statista stated that in 2015, e-commerce sales across the world rocketed to more than $300 billion. By 2019, the estimated sales using e-commerce rose to $600 billion, in which $100 billion is from US sales alone.
The Challenges and How to Overcome Them
It is not all gain in e-commerce. You might have lots of losses. These losses are part of your challenges. But, there will always be more hurdles, big and small, that have to overcome. The road to e-commerce success is hard but fulfilling, especially when you win over these challenges. Here are the top ten challenges that an online merchant has to face and some tips to overcome them.
Difficulty in Verifying Online Identity
An online visitor finds your website and creates an account. Your website portal will have no means to verify if all the information that the person entered is correct and legitimate. While a pre-payment via debit and credit cards will secure your profit, buyers who chose the COD (cash-on-delivery) payment scheme are high. An invalid or fake account can result in significant losses.
Tip: Take time to know what customer’s information will help you increase identity verification in your location. Also, learn the signs of suspicious orders, which could be a high-value order from an unverified account. For this particular situation, you can forward a verification link to the customer to input a proof of identification to confirm that he is a genuine buyer.
Fulfilling An Omnichannel Consumer Involvement
Consumers get satisfaction from various touchpoints, which you need to consider. It may be your website, your point person, your messaging platform, or through your social media page. According to retail experts, a business that does not gear to fulfill an omnichannel consumer experience will lose over their tech-savvy competitors.
Tip: Invest in the right technology. Find customer engagement tools that will allow your team to monitor and analyze customer behavior in various channels and touchpoints. Note all factors that affect your customers’ decision-making. And finally, touch-base with your customers through their preferred mode of communication, which may be instant messaging, email, phone, video call, etc.
Understanding Your Competitors
e-Commerce survives because of its competitive environment. Each merchant strives to be successful, which makes room for growth and development. Unfortunately, there will always be products that are the same or similar for various online merchants. The challenge now is to stand-out over your competitors to make sure that you will catch the buyers’ attention. The question now is, how can you do it?
Tip: Identify and gather pertinent information about your competitors. Analyze their data and formulate a smart strategy on how to have the edge over others. Maximize the use of social media platforms, blogs, and marketplaces to market your product. Invest in e-commerce tools, such as an Amazon repricer like Seller Snap, to decide better the proper utilization of your product marketing and advertising.
Preference for Old-School Selling
While it seems that everyone is shifting to e-commerce, there are still many companies that prefer the old-school technique of selling, which is shopping physically in a traditional store. The problem is that with this kind of approach, there is very little to no data on customer buying patterns.
Tip: Choose reliable marketplaces, such as Amazon, eBay, Etsy, etc. These e-commerce companies have built prominent software systems and extensive networks that allow online merchants to market and sell products easier and faster.
Alternatively, you can do visitor segmentation. It will let you identify and understand your consumers’ preferences based on various factors, such as their location, reactions to product promotions, age, etc. Through the data that you will collect, you may formulate a strategy to create a more personalized service, including giving out promo codes and free delivery service.
Abandoned Carts
Abandoned online carts are a typical concern among e-commerce businesses. More often than not, recurring errors and slow checkout processes are why consumers leave their carts without completing the transaction. This scenario results in considerable losses in companies.
Tip: Restructure your shopping cart and checkout procedure. Ensure a good flow process by experiencing the entire process yourself. You can also invest in seller tools, such as Amazon seller analytics and repricers, to monitor and understand how your products fare than competitors. Repricers will also give you the edge on having competitive yet profitable prices.
Protecting Consumer Loyalty
Even big and established companies experience this challenge. Consumers are always bound to check competitors’ products, prices, promos, etc. No one can prevent them from doing such. Attracting new consumers and converting them to actual buyers needs a lot of effort, especially if you are a start-up business. It is where loyalty on your products comes in.
Consumer loyalty in e-commerce is one of the biggest hurdles that online merchants need to overcome. Loyalty is challenged as face-to-face interaction is less or none, giving consumers a better sense of confidence in products and services offered to them.
Tip: Ensure consumer satisfaction on the entire process through prompt monitoring. Give them a stress-free transaction, from searching through your goods to order, check out, and shipment. Also, allow your consumers to give constructive feedback when needed. It will provide them with the notion that their welfare and satisfaction is your utmost priority.
The Chaos of Returns and Refunds
According to a UPS survey, more than half of respondents, who are all American online consumers, read the return policy before completing a transaction. Almost half of the respondents prefer merchants who offer non-stressful returns.
Product returns cause considerable losses to businesses. The losses come from the profit loss from the product itself, the shipment charges, and the damaged reputation.
Tip: Refunds and returned products are part of any retail business. It is also a factor that affects the customer service rating of a company. To combat losses, create a detailed policy that is reliable and reasonable for both you as the merchant and the consumers.
Be transparent about the terms and conditions, but choose your words wisely. Avoid phrases that might seem to push or offend potential consumers, such as “we require you” or “you should.” Ensure that your entire team well-understood your return and refund policy so that they can effectively help consumers.
Effort on Repricing
One of the most significant factors in e-commerce is keeping a competitive price on your goods. The thing is that there will always be similar products as what you offer on the channel that you choose. A vital factor that consumers look into is the price.
For a huge marketplace, such as Amazon, online sellers can create an account and sell products through the platform. Thousands of potential customers browse through products every second, and more often, they would choose a product that would cost them the least.
Tip: To gain an edge over competitions in big markets like Amazon, invest in smart seller tools. Be sure to pick the best Amazon repricing tool. Repricers can help you monitor and analyze your competitors’ prices and adjust them automatically without compromising your profit.
Manufacturers Take the Lead
Some online merchants get products directly from manufacturers at a lower or wholesale price, then offer them to the public at a retail price. However, the problem is that some manufacturers openly offer the same deal to the online audience, which makes them a competitor for online merchants too.
Tip: Create promos and bundles that are different from what the manufacturer sells. You may also speak with the manufacturer if you can get a lower price than what they previously offered you as you are getting bulk items from them. You may also set a contract that only you can sell as their direct supplier at a specified location to secure your audience reach.
Data Breach Concerns
A data breach can cause unimaginable damage to anyone’s business. Fraudsters can attack via sending a virus, posting multiple spam emails, and many more. The target is typically consumer information, including name, card details, address, and contact numbers.
Tip: If you are running your e-commerce website, enroll with a reliable host that offers premium security protection. Also, keep caution on opening emails and messages that seem malicious.
Some fraudulent emails pretending to be banks, your host server, or your platform customer service. Only entertain and answer emails from reliable senders. If in doubt, call a safe customer service number for your e-commerce platform or the bank to confirm if they sent an email to you. Never divulge passcodes to anyone.
Conclusion
To strive and be successful in e-commerce is every online merchants’ goal. Challenges will constantly be a part of the journey. If you want to gain the upper hand, be ready to face these challenges head-on as winning over each will allow your business to grow and flourish.
About the Author:
Patrick Panuncillon is a Search Engine Optimization (SEO) practitioner and a seasoned digital marketer with a decade-worth of experience. He has been helping eCommerce sites across various niches grow their income. He loves to dabble on the latest innovations and tools related to the industry.
