15 Critical eCommerce Challenges and How to Overcome Them
eCommerce Issues and Challenges
Consumer behavior has changed. Most notably, there is a continual increase in consumers shopping online to purchase items they would have previously purchased in physical retail stores.
Last week I wrote about emerging eCommerce trends for 2023 and how to adapt your online store to meet the demands of modern consumers. Today I focus on the other side of the coin by listing critical eCommerce challenges online retailers and product brands face in 2023 and how to overcome them.
Gone are the days when people had to visit brick-and-mortar stores to buy products. Thanks to the internet, you can purchase almost everything you need. As a result, more people now prefer to shop online from the comfort of their homes than go to the nearest shopping mall.
As a result, the eCommerce industry is booming. By 2023, worldwide eCommerce sales will total $6.169 trillion and make up a 22.3% share of total retail sales, up from $3.351 trillion to 13.8% in 2019. And studies predict that by 2040, 95% of purchases will be made online.
Although it provides a massive potential for growth and success, there are several e-commerce challenges that retailers need to deal with to make it in today’s globally competitive market. So, if you own a small e-business or a big product brand, you might want to read this carefully!
Challenges Facing eCommerce
In 2023 online retailers will face several challenges while adapting to the ever-changing digital marketplace.
The world has had its fair share of challenges over the last few years. But when the COVID-19 pandemic hit in 2020, society’s loss was eCommerce’s gain. Sales soared; business boomed; and vast swathes of the globe, forced to stay inside, turned to online shopping to ease their cabin fever.
Now, in 2022, the tables have turned. As the world moves to post-pandemic freedom, eCommerce is becoming an increasingly challenging market to compete in. Surviving in this new eCommerce landscape will require a unique vision and strategy.
Small businesses, going up against huge retailers in cost, delivery times, and refund policies, are struggling to compete. As eCommerce spending grows, so does the competition. Direct-to-consumer brands are entering the market at record speed, advertising costs are rising, and customer expectations are at an all-time high.
But what other pitfalls lay in wait? In this post, I will outline the 15 most significant challenges facing online stores in 2023 – and how your business can overcome them.
The 15 Biggest eCommerce Challenges in 2023
1. Cyber Security and eCommerce Fraud
The only eCommerce challenge on our list to involve malicious intent, fraud is something online retailers need to be aware of in 2023.
eCommerce fraud can take a range of forms: from someone using a stolen credit card to purchase goods to so-called “friendly fraud” – where customers falsely declare the product bought online never arrived and claim a refund via the issuing bank. (In typical bank fashion, who then claims that loss back from you – with a fee on top!)
As the internet continues to evolve and offer eCommerce businesses more diverse routes to making money, so are fraudsters changing with the times. In 2023, emerging forms of eCommerce treachery include affiliate fraud, interception fraud, and even triangulation fraud.
To help safeguard you from eCommerce fraud, ensure your website’s payment system is up-to-date with the latest standards.
2. Data Protection and Privacy
To achieve success online, you need to build lasting customer trust; therefore, strong data privacy protection and cybersecurity are key factors that determine whether people are willing to purchase items from your website or not.
That is why if your E-store doesn’t provide optimal security to visitors, no one will take the risk of giving up their data to buy your products.
In the worst-case scenario, your business website can fall prey to data loss such as emails, phone numbers, and credit card information. Moreover, online security is a sensitive topic because one security breach can compromise your e-business and cost you years of hard work.
So, building unshakable security must be at the top of your online efforts. Here are some tips to help you out:
- Purchase the right SSL certificate from your hosting company, and make sure it’s always up-to-date.
- Use updated protocols such as HTTPS because they’re essential to rank high on search engines and guarantee that your website is secure and trusted by search engines and users.
- Use a CMS that is renowned for data protection and is very trustworthy.
- Use a reputable and trusted hosting provider and follow their security recommendations. Many service providers offer security scans and anti-virus protection as part of their service packages. Be sure to install them.
- Use anti-virus and anti-malware software to prevent hackers from hijacking credit card data from your site because they are essential for spotting suspicious transactions and activities that can threaten your security.
- Use eCommerce security plugins to empower your web store security against potential attacks and back up your data to prevent data loss.
- Improve your servers and admin panel security. In other words, you need to change your web store default password if AI tools can easily predict it. Instead, use complex passwords, and make sure you update them regularly. You can even use security software that warns you when an unknown IP address attempts to access your web store.
- Use secure payment gateway methods that protect your users’ confidential data and ensure a safe transaction experience.
3. Standing Out from the Competition
Because eCommerce offers massive potential, more retailers are joining the game, and the competition is getting fiercer. Therefore, distinguishing yourself from competitors is inevitable to grow your e-business, no matter how challenging it might be.
Like it or not, dozens of retailers offer the same products and services as you do, so you need to find a way to differentiate from the rest in your target market and outgrow the competition.
A simple way to do that is by studying your target market and competitors; then developing an effective strategy to establish your presence in the arena. But first, you must exploit your competitors’ pitfalls and build a unique brand presence that puts you at the top.
For example, create an omnipresent strategy to promote your brand across all channels, such as social media outlets, blogs, paid ads, and more. This way, you will raise brand awareness and improve customer loyalty.
Also, you can determine which products and services are in high demand, then make them the main items your business offers. Then, ensure they’re displayed on the homepage of your website and easily accessed by visitors.
Therefore, you must optimize your e-site usability and enhance UX friendliness. Remember, don’t try to outsmart your competitors, but always strive to be different!
4. Targeting the Right Customers
It’s one of the first rules of business and something every aspiring eCommerce store owner maps out in the executive summary of their business plan.
Who is your target audience?
This knowledge is instrumental to business success, and for obvious reasons, you need to know who your target consumers are to sell effectively.
But in today’s day and age – where demographics, customer pain points, and market motivations are more fluid and flexible than ever before – understanding your target audience is plenty more perplexing than it used to be.
To overcome these eCommerce challenges, map out a set of buyer personas. Though based, ideally, on actual data, these are fictional “profiles”; archetypes of your ideal customer. Personas should include the customer’s pain points, goals, social media footprint, and where they go for their primary source of information.
After putting your business’ unique personas together, put them into practice. Ensure any content you write, marketing emails you send, or search engine ads are composed of this set of archetypes.
5. Converting Visitors into Paying Customers
While some slimy SEO agencies might tell you to focus on traffic as a critical metric of site success, all eCommerce store owners know that people merely visiting your site don’t pay the bills.
They have to buy something, too. So how do you solve this age-old eCommerce challenge in 2023 – and turn visitors into paying customers?
Well, the first thing to do is try and understand why your customers aren’t converting. Is it to do with your site? Misplaced 404-ing pages, an inconsistent UX (user experience), and even a single malfunctioning button can all be fatal to your attempts to turn a browser into a buyer.
Be sure also to double-check your payment system is working and that all the info on your store makes sense and is free of mistakes.
Alternatively, any issues with converting customers could lie with broader aspects of your eCommerce business’s positioning in the market. For example, are you targeting the right audience? Are you building a recognizable, memorable brand – and engendering trust in it?
Crack the case of why your customers aren’t converting, and – pretty soon – they will be.
6. Meeting Consumers’ High Expectations
In offering same-day shipping and a seemingly unlimited array of products to choose from, Amazon may have “revolutionized” eCommerce – and benefited the end customer.
But that doesn’t mean it’s done retailers any favors.
The rising standards of convenience and quality that eCommerce giants can now provide have only increased customer expectations. Which are easy to meet if you’re Bezos; not so simple for the average eCommerce store owner.
Herein lies the big eCommerce challenge for online business in 2023: how to meet (and surpass) those expectations without a big budget?
While the solution isn’t clear-cut here, I recommend customizing the customer experience wherever possible. Personalization is already one of the cornerstones of eCommerce success – mainly when tailoring customers’ deals and discounts (i.e., through email marketing).
But as we enter 2023 and previously uncharted eCommerce territory, the more you can make your offering relevant to the individual customer rather than the masses, the more open your audience (and their wallets!) will be to it.
You’ll need to figure out a way to keep your regular customers engaged and loyal, too – more on that below!
7. Managing Identity Verification
Your e-business is constantly exposed to potential frauds and malicious bots that can cause revenue and data losses from your site. Therefore, to prevent this, you need to verify that people who try to access your store provide legitimate identity information. This way, you can protect yourself against scammers and fraudulent users.
A robust online verification system is one of the best defenses against online fraudsters. You can be sure of their identity by asking your customers to verify their identity by providing personal information only they know – such as biometrics, a one-time password, two-factor authentication, and more.
Always verify that users’ information is valid. Identify suspicious activities on your sites, such as numerous orders and clicks from a single source. Also, use software/plugins such as Captcha to automate spotting phony users and block fake phone numbers, email addresses, and ZIP codes.
Make sure you send a verification link via an email or a text message once users sign up. Regarding COD (cash on delivery), you can ask people to validate their delivery addresses to avoid invalid information or fraud.
8. Pricing, Shipping, and Order Fulfillment
Regarding eCommerce challenges, pricing your products and services without undermining your margin profits can be complex. Maintaining an acceptable profit margin is why you should set competitive pricing strategies that suit your target market, industry, and product perceived value. Be sure to pick a pricing strategy that best fits your online business.
Another problem of eCommerce that online sellers struggle with (especially small businesses) is shipping and order fulfillment. For example, when shipping products to customers, you might run into problems regarding product packaging and shipping costs.
To overcome this, try to find packaging materials wholesalers and try different shipping services until you find a reputable low-cost provider. Also, ensure you use durable packaging materials to guarantee your products ship and arrive without affecting their quality.
Pro tip: Don’t ask buyers to pay shipping fees because most of them hate it, and it’s considered one of the main reasons behind cart abandonment. Instead, include the shipping cost with the product price and offer free delivery!
As an e-business owner, you certainly know success is determined by whether people are likely to shop from your store again or not. Here comes order fulfillment at play, for it’s essential to satisfying and retaining consumers. To achieve effective order fulfillment, focus on having an efficient inventory management strategy and avoid stock shortages.
Always keep enough items in your stock to meet your target market’s demands. You can solve this by utilizing software to register orders, automate inventory management and avoid stockouts.
9. Offering High-Quality Customer Service and Support
With so many eCommerce businesses jostling for the same slice of the eCommerce market, there are remarkably few ways to differentiate your offering from your chief competitor’s. You sell similar goods, and your prices and policies are on par. So how can you stand out?
Customer service – that’s how.
And I don’t just mean responding quickly to customers calling to enquire (although that is part of it).
I am talking about developing an empathetic, person-centric approach to customer service. That means responding with patience, warmth, and empathy to complaints – even the most grating ones – and acknowledging the pain points and frustrations of those looking to return or exchange goods.
Plus, customer support and service shouldn’t just be high quality – they should be highly convenient, too.
The more ways you can offer customers to get in touch via the method that suits them (be it social media, live chat, phone, email, or a contact form on your website), the more likely they’ll be to do so. And ultimately, they’ll be more comfortable dealing with your business.
So, if you haven’t already, implement live chat on your site. There are many affordable chatbot solutions these days. Trust me – your customers will thank you for it!
10. Creating Customer Loyalty
The statistic that it’s more profitable to re-engage a current customer than acquire a new one is common knowledge.
And guess what? It’s true.
That makes customer retention vital. And in turn, this means that your eCommerce business needs to find a way to cultivate that most elusive attribute: customer loyalty.
So, how can you foster more engaged, involved customers? The answers are myriad. My favorite, however, is content marketing.
Starting a blog and posting regularly is just one of the ways you can add value to your customers – beyond simply providing them with a product or service they love. Creating content relevant to your audience – and speaking in a tone they not only resonate with but will come to recognize – means they’ll always find a reason to return to your site. (And potentially, to keep buying from it, too!)
Through content, you can also offer customized deals and discounts to re-engage lapsed customers – or to let them know you care.
11. Competitive Prices and Shipping
If your business isn’t yet at the stage where you’re able to offer same-day delivery, don’t fret. Just 51% of all online companies do – so the good news for small eCommerce businesses is it’s certainly not yet the norm.
The bad news? That pretty soon, it might be. With competition driving prices down and shipping rates going the other way, honest eCommerce businesses face an uphill challenge to compete. Is there a solution?
Well, you can start by auditing your current logistical setup. Are there any aspects of your existing supply chain you could optimize to save cash? Could work with the right 3PL (third-party logistics provider) enable you to offer shorter delivery turnaround windows?
Would switching your shipping carrier allow you to save money or – better yet – offer free shipping? Looking to the customer, would a subscription model help you drive the prices of individual items down to compete with the big companies?
Alternatively, you could go the other way. And, instead of driving your prices down to compete with the lowest common denominator, lean into a more “premium” reputation: increasing your prices to convey the quality of your brand and service.
12. Increasing Conversions
Improving conversion rates is a haunting issue that most online sellers deal with, and it’s a key indicator to measure your eCommerce business success. However, there are a variety of reasons that lead to low conversions, including:
- Poor online presence: if your e-business or store doesn’t live up to your customer’s expectations and deliver a memorably digital experience, they won’t bother to check your products or shop from you. Remember! The first impression lasts, so make it unforgettable.
- Not knowing your ideal customers: without a clear idea about who you’re selling to and your primary target audience, you will waste a lot of time and resources marketing to the wrong buyers. Eventually, it reduces your conversion rates and lowers your sales.
- Poor SEO optimization: for people to trust your offer, you need to rank higher on the SERPs. It would be best if you established yourself as an authority in your industry and niche to build brand loyalty and increase conversions.
- Poor product descriptions: most people don’t know about your products and will not spend much time learning about them. It’s your job to tell them and make them like your products. But if your copy is poorly written, dull, and unconvincing, no one will bother reading it! Let alone shop from your store.
So, to improve your conversion rates and sales, ensure you build a solid and consistent presence for your eCommerce business. Identify your target customers, and create effective marketing strategies tailored to their interests and needs.
Optimize your site through efficient SEO strategies and engaging content that resonates with your audience. Write compelling and persuasive copies that sell not only your products but also your brand.
13. Avoiding Cart Abandonment
Are there two words more horrifying to the ears of online business owners than “cart abandonment”?
Probably not. And in 2023, this ever-present menace remains one of eCommerce’s biggest challenges. So how do you combat it?
Start by auditing your checkout flow. Then, hire a couple of testers (don’t use friends or family: they need to be people without pre-existing knowledge of your business) to “order” something from your site. Then, ask them for feedback on the process.
Was the checkout experience smooth and seamless? Simple? Did it inspire trust and have visual coherence, cohesiveness, and consistency with the rest of your website?
If not, try making the process easier by reducing the required information and scaling back the size of your forms – or the number of steps needed to check out. Live chat tools – or automated chatbots – can help by popping up to get the user unstuck at crucial friction points.
And, if all else fails and you lose that customer, why not win them back? Via an intelligent approach to email marketing, you can target customers that didn’t finish converting with offers and discounts (on the item they were contemplating purchasing) to lure them back in. Genius!
14. Finding the Right Return and Refund Policies
As I mentioned earlier, customer expectations are increasing. The number and range of products they want to see, the prices they want to pay, the speeds at which they want them delivered, and how easy they are to return.
For eCommerce, this is one of the biggest challenges 2023 and beyond will present. So how do you find that balance between a simple, permissive returns policy that’s attractive to the customer and one not so forgiving that it’s open to abuse by “friendly” fraudsters?
Even if you deliver high-quality products, refunds, and returns are inevitable problems you will have to deal with from time to time. Many customers check refund and return policies before buying an item from your e-store. This behavior indicates a good chance the consumer will return products if unsatisfied or receive a harmed item (or even if they didn’t like it).
When shoppers return products, your business endures an overwhelming loss in terms of shipping costs and reputation. However, having clear and straightforward refund and return policies is essential for providing and maintaining good customer service.
So, you should develop straightforward policies that don’t overwhelm your business and put off buyers.
Here’s how to do it:
- Write clear and straightforward policies that customers can quickly follow
- Make sure consumers can easily find your return policies on your site’s homepage
- Set your refund method; meaning how are you going to return money to customers
- Set returns conditions to protect your business and products
- Clarify your return period window, which means you need to have a limited time frame in which buyers can return products
Therefore, honesty is the best policy. Be transparent about your return policy – particularly its limitations – but avoid harsh phrasing all the same (“you must” and “you are required” are real mood killers).
15. Choosing the Right Development Partners
When eCommerce businesses fail, a lot of the time, it isn’t due to their idea or execution. It has nothing to do with their product or marketing strategy. Often, failure isn’t even down to that business’ people – but the firms they choose as partners or service providers.
Whether it’s a misfiring tech platform or picking the wrong agency or consultant to help grow your business, the consequences of choosing the wrong partners can be dire.
Fortunately, this eCommerce challenge has an intuitive solution
First, pick a partner that will support your business objectives!
Of course, this is easier said than done. But no matter the platform or solution you’re selecting – be it a CMS system, eCommerce platform, inventory management software, email marketing tool, or shopping cart solution – ensure you’re doing your due diligence.
It’s also essential, if possible, to pick an agency tailored to your specific industry. Professional eCommerce design agencies are familiar with your target market and consumer and know your pain points inside out – so they’re usually a safe bet!
Turning eCommerce Challenges Into Opportunities
According to the latest data, the number of online shoppers in the US has been increasing yearly. In 2022, analysts expect there to be 266.7 million digital buyers. This figure marks a 1.4 percent annual increase from the previous year.
These statistics show the enormous growth and potential of e-commerce as an industry. It is the future of business. However, for everyone to succeed, either small businesses or big companies, they need to adapt to the new trends of this thriving industry and overcome the obstacles that pop up along the way.
Overcoming eCommerce Business Challenges
eCommerce businesses are facing increased pressures within their market and broader societal, economic, and political forces. And while technology continues to present opportunities for online store owners, it also creates several potholes and pitfalls along the way.
I understand that dealing with these eCommerce challenges can be complicated and frustrating, especially for small business owners. But if you approach each challenge with a positive perspective, you will find that your business grows with every obstacle you overcome.
You will learn new ways and encounter opportunities to provide customers with the best service and experience while standing out from competitors. So, never lose heart! Always find intelligent solutions to problems and consider them fresh opportunities to grow, succeed, and overcome competition in the digital world.
This article highlights the top 15 eCommerce challenges and how to solve them. Start by implementing the solutions I have outlined. We are here to help!
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