Most Common Challenges of eCommerce and their Solution

Challenges of eCommerce

Are you someone who is running an eCommerce business? Well, you obviously can be! The main reason behind this true fact is that this sector of business is prioritized nowadays to a great extent as people like to buy online more and more. But whether you are an expert or novice in this sector, there is no doubt about the fact that along with earning a lot of money you are facing a lot of challenges of eCommerce.

We’ve listed some of the common challenges of eCommerce business can face and we would explain how to fix these problems. Even if you are thinking of starting a new eCommerce business, or facing any of these eCommerce challenges then you should pay close attention to the list and move in the right direction to overcome the challenges and achieve success.

Challenges of eCommerce

The success of any eCommerce business depends on the right execution. If you calculate the equation correctly, you will get the perfect result. Starting an eCommerce business requires a lot of time, investment, and efforts. Remember that your online store should offer a good shopping experience to the customers. Customer satisfaction play vital role to make your eCommerce business successful. If you want to get a greater share of the pie in the eCommerce business game, you would have to stay competitive in the market by trying different methods.

Common Challenges of eCommerce and their Solution

Let’s have a look at the common challenges of eCommerce business and their solution.

Challenge 1: Absence of online identity verification

When any visitors visits your eCommerce website and sign up, how do you know if that person is genuinely interested? Are they entering their real name and proper contact information?

When a customer makes a Cash-On-Delivery (COD) purchase and the information entered like phone number and address is invalid or fake, then the company losses huge revenue.

That’s why online identity verification is essential.

Solution:

This challenge can be solved by taking proper steps to verify the customer’s identity and information. 
First of all recognize all the signs of suspicious activities like if any customers are placing high priced orders or high quantity orders, try to detect fake phone numbers or e-mail address, check postal zip code whether it is matching with state/city. Besides this when a visitor signs up send textual message or e-mail to validate that the customer is genuine. And when a customer makes a COD purchase automated call can be dialed out to the customer to ask him/her and validate the delivery address.

This way, you can control fraud attempts without sacrificing a potential customer service experience.

Challenge 2: Competitor Analysis for eCommerce Business

Competitor analysis is a critical part of your e-business benefits and challenges. With this analysis, you can establish what makes your product or service unique – and therefore what attributes you play up in order to attract your target customer.

Answer questions such as: Who are your competitors? What products or services do they sell? What is each competitor’s market share?

In this competitive eCommerce business world, there will be too many competitors who will be offering same products and service as you. How do you set yourself apart? Unless you have the best strategy that differentiates you from other competitors; it will become difficult to survive.

For example, let’s visit at Etsy, an eCommerce website that sells handmade or unique items.

A quick search for “desk calendar” shows 246 results!

Competitor Analysis

There are so many shops offering different price on the similar product. You have to find the solution how to stand out in the competition.

Steve Jobs said:

“You can’t look at the competition and say you’re going to do it better. You have to look at the competition and say you’re going to do it differently.”

Solution:

Conduct proper and deep analysis of your competitors to find out what products your competitors are offering, and how much they’re selling it for. Make some strategies which enables you to shine brighter than your competitors. Use social media platforms, blogs, for promoting your products and services. Do some analysis of right platforms. Invest in promotional offers which will help to get more visitors and customers.

Figure out research to find which new products are more in demand and remove the ones that aren’t. Offer best & extraordinary customer services that can even help you to be one step ahead of your competitors.

Challenge 3: Customer Loyalty to overcome Challenges of eCommerce

The eCommerce business industry is an industry where the cost of switching is pretty insignificant. A lot of business men have lost customers because their rivals have better customer service or better discounts. According to a research, 86% of clients stop doing business with a company because of poor customer service, always ensure first that customer service is a top priority for your online business and part of your retention strategy.

Solution:

To earn the customer loyalty, you MUST provide excellent customer service. Create positive experiences for your customers so that they start to trust you. Always keep in mind that if your customers are happy, it’s likely they’ll purchase from you again.

Customer Loyalty

Here are few simple ways to increase the trust with visitors:

  • Be Transparent: Display your address, phone number, contact information and pictures of staff, customer testimonials, and credibility badges on your website.
  • Live Chat: Add live chat option to your website.
  • Blogging option: Create the blogs to help your eCommerce store to build trust.
  • Customer service: Make customer service as a top priority before profit. Always remember, it’s always difficult to find a new customer than maintaining an existing one.
  • Loyalty program: Arrange loyalty programs. since, the points are not transferable to other companies, the customer will definitely make next purchases from your sites.
  • Send mails: Many customers prefer email as their preferred choice of business communication. Try to capture their preference.

Challenge 4: Product Returns and Refunds

According to the survey by comScore, more than 60% of American consumers check the return policy before making a purchase. And, 2 out of 5 customers said they abandoned shopping carts because of delivery dates. That’s no the end, comScore also found that half of online shoppers weren’t willing to wait more than 5 days for delivery.

Another research shows that about 89% of online shoppers have made a return in the past 3 years and  77% of those returns come from repeat customers.

This research clearly shows how conscious consumers are for the return and refund policy.

When the product is returned, due to any reason, whether a customer was dissatisfied or the product was damaged, the business suffers a tremendous loss of shipment and reputation. Logistics and shipping cost have always been scary for those eCommerce sellers who deliver the product for free.

Solution:

Return and refund are also a part of great customer services and future challenges of eCommerce business, therefore it will be the great mistake to underestimate them. The best solution you can give is build a strong returns policy. You can consider the bellow things while designing returns policy:

  • Try to be transparent in all cases and never hide your policy.
  • Use simple English that even understand by laymen. All of your customers will not read your intellectual policy.
  • Don’t use the scary word in the policy like, “you must”, “you are required”, avoid this type of word in the police because the too harsh policy may stop customer to purchase the product.
  • Give them various options for payments and shipping.
  • Educate your supporting staff about your return policy. So, that they can assist customers quickly, effectively and politely.
  • Be prepared to face the extra cost of your mistakes. If the product is shipped to wrong address, then take extra efforts to make the customer happy.

Challenge 5: Price and shipping

Let’s go back little bit up to look at the Etsy’s example, Although our search came up with 246 results, many of the calendars were priced differently.

Pricing and Shipping

And it’s the product price, before shipping.

The competition of price affects the small eCommerce business badly. Because the mid-sized or large competitors often offer products with less price and free shipping on almost every order.

Online sellers like Amazon and Walmart generally have the shipping facilities around the country. Their distributed warehouses allow large eCommerce businesses to ship orders from the nearest facility. As the orders are shipped from the nearby warehouses, the shipping cost to send the order decreases and the order arrives in a day or two.

Ultimately every online shopper expects fast and frees shipping at lowest price.

Solution:

To survive in the competition, eCommerce companies need to use a local delivery or courier company that will deliver the product quickly to your customers at a competitive rate. Because ultimately every online shopper expects fast and free shipping with lowest price.

Challenge 6: Retailers and Manufacturers

Many online stores buy their products from retailers and manufacturers or distributors to sell that in retail from their store. This is the basic online business model for every online stores.

Unfortunately, because of eCommerce’s low barrier to entry and other reasons, many times these retailers and manufacturers also sell the same products directly to customers.

The same company which sells your products may also be your competitor.

Solution:

Though it is impossible to stop manufacturer to sell products to customers directly, but you can use few tactics to minimize the problem. Below are same that might help the online seller:

  • Give priority to those who are less likely to sell directly to customers. That way, your manufacturer won’t also be your competitor.
  • Include a statement in your contract that restricts the manufacturer from selling directly to customers.
  • Offering the same product at fewer prices or with added benefit to increase the sales.

Challenge 7: Data Security

Security issues over the web is the common problems faced by consumers in e-commerce. Attacker post lot of spam and they may attack the web host server and infect all websites with viruses. They can also get access to all your confidential data about your customer’s phone number, card details etc.

Solution:

Most of the content management systems (CMS) store their data in the database. Developers should take the regular backups at an intervals and should retrieve the data if stolen. Manage your own servers and do not use common FTP to transfer files. If any developer copies any file in an open Wi-Fi network, he can lose passwords and other confidential data to the thief. By constantly updating shopping cart regularly you can minimize the risk of data stolen.

Conclusion

Surviving in the eCommerce market competition, is just like an war. So, you have to set the strategies accordingly. Give some extra efforts on your every aspects of business. You have to prepared always to face the challenges and growth at every stage of your eCommerce business. Then you will get the opportunity to bloom.

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