21 Common Ecommerce Challenges and Practical Solutions
Online Retailers are Facing Increasing Ecommerce Challenges
The online shopping industry has been growing at an incredible rate, and so have ecommerce challenges. By 2040, 95% of purchases will be made online, so now is the right time for retailers to face ecommerce challenges and find solutions.
For example, the rise of digitalization has transformed how online retailers operate. Although this online approach has made shopping easier for consumers, it has also brought unique problems for ecommerce companies — like website optimization and service over multiple digital touchpoints.
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 2023, the tables have turned. As the world edges its way to post-pandemic freedom, ecommerce is becoming an increasingly challenging market to stand out. Small businesses, going up against more prominent retailers in cost, delivery times, and refund policies, are struggling to compete. But what other pitfalls lay in wait?
To help you, we created a list of 21 common ecommerce challenges and simple solutions you can try.
21 Common Ecommerce Challenges
1. Cyber and Data Security
Regarding ecommerce, one of the biggest challenges faced is security breaches. A lot of information/data is involved while dealing with ecommerce, and a technical issue with data can cause severe damage to the retailer’s daily operations and brand image.
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 ecommerce products?
How do you proceed if you do not have accurate details or information? Well, it does become tricky. The solution would be to invest in 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, etc.
3. Revamping Selling Tactics
One of the most pressing customer service issues in ecommerce is catching up to modern customer expectations. But unfortunately, many companies lack insight into customer behavior and buying patterns.
Consider offering your products in prominent marketplaces like Amazon and eBay. These ecommerce sites already have a vast network of buyers, so pitching and branding your product (and figuring out what works and what doesn’t) becomes somewhat more straightforward.
Also, segment your data. Visitor segmentation allows ecommerce companies to identify and communicate with visitors based on their customer journey, past conversations, geographical location, browsing behavior, referral page, and much more.
4. Attracting the Perfect Customer
Shoppers have a myriad of options to choose from these days. If they want to buy a handbag, they do some thorough research before finalizing one. If shoppers have several options, how do you ensure 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?
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, finetuning, and analysis – your products could show up to potential customers on different social media platforms.
5. Improving the Customer Experience
Customer experience or user experience is critical 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. Therefore, the flow of the website, the segmentation of the website, and the retail personalization of products based on the shopper’s preferences are imperative.
There are several ways to improve the user experience. The most important would be to have a clean and straightforward website so shoppers can navigate easily. The next point would be to have clear CTAs (call to action) so that the shopper knows what to do.
6. Increasing Customer Loyalty
Without customer trust and loyalty, your business will struggle. But, acquiring and maintaining customers requires massive effort.
One of the reasons ecommerce businesses face a challenge in building customer trust and loyalty is that often, the seller and buyer don’t know or can’t see each other, which makes interactions less personable.
This ecommerce challenge takes time and effort to overcome. But, across multiple transactions, eventually, the company can build this trust and loyalty.
These are a few different methods to retain customers. The first would be 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 they like– an email, SMS, or blog post – 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.
In addition, you should also consider the following:
- Display your address, phone number, pictures of staff, customer testimonials, and credibility badges on your website.
- Create valuable content.
- Make customer service a priority over profit.
- Ask for customer feedback.
- Refine loyalty programs.
7. Converting Shoppers into Paying Customers
One of the biggest ecommerce challenges is converting visitors into paying customers. An ecommerce website might have a lot of traffic, clicks, and impressions, but they aren’t making the sales it anticipated. So what can they do to get more sales?
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 paying customers.
8. Facing Increased Online Competition
Many online stores bulk buy products wholesale from manufacturers or distributors, selling them online. This strategy is the primary business model for ecommerce.
But, due in part to ecommerce’s low barrier to entry, product manufacturers and retailers have started selling directly to consumers, too. As a result, the same company that sells your products may also be your competitor.
For example, ABC Clothing sells directly to your online marketplace and consumers on its website. Even some of the manufacturers create distributors, making the scenario worse.
You can’t stop manufacturers from selling products directly to customers, but there are a few tactics to try:
- First, give priority to manufacturers less likely to sell directly to customers.
- Offer the product at a lower price or with additional benefits to increase sales.
- Restrict the manufacturer from selling the product directly to customers by setting this out in the contract. It will not be possible for every manufacturer, but you can work with smaller ones this way.
9. Competing on Price and Shipping Costs
We have all heard of customers who prefer to purchase products from places with free shipping. Ecommerce giants like Amazon provide such attractive shipping deals that customers seldom want to look at other sites. So how does one bring down costs for shipping?
While all ecommerce sites cannot completely get rid of shipping costs, always look to find options that work for your customer base. For example, would a subscription reduce the cost of shipping? Would a specific 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 research and find the best possible solution for your shoppers.
10. Reducing Shopping Cart Abandonment
Shopping cart abandonment is a huge ecommerce business challenge. But, unfortunately, even ecommerce giants are not immune to it.
For instance, when brick-and-mortar heavyweight Nordstrom started an ecommerce portal, they witnessed significant opportunity losses in ecommerce sales from abandoned carts. In addition, the tedious and bug-filled checkout process was causing customers to flee mid-purchase. Online retailers can’t ignore this ecommerce problem.
A few simple solutions can significantly improve your shopping cart conversion rate. First, consider redesigning your shopping cart. Next, fix bugs and remove excessive steps or unnecessarily long forms. Finally, offer instant help tools that customers can use if they get stuck.
Visual tools can also help address customer queries during the checkout process, such as a progress bar indicating the stage in the checkout process.
11. Product Return & Refund Policies
According to Invesp, 67% of shoppers check the returns page 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.
Customer satisfaction is the most crucial factor for any retailer. Therefore having a flexible return and refund policy not only helps with customer satisfaction but also helps customers make purchases without being nervous.
12. Providing Customer Support
With the scale of ecommerce increasing rapidly and the rising number of users facing everyday issues with ecommerce services, customer support is augmented with chatbots which enable faster processing and response to tickets. However, many customers feel uncomfortable or dissatisfied with automated answers from chatbots.
The solution to this ecommerce challenge is relatively simple – ecommerce companies should utilize a combination of technology and human assistance to deal with customer support by tagging specific issues that require human help and distinguishing the queries a chatbot can handle.
13. Cross-Border Ecommerce
A lot of ecommerce sites tend to stagnate due to the lack of interaction with customers outside their geographical and linguistic range. As a result, users that do not speak the primary language used on the site tend to look for other retailers that can offer them a better user experience. Moreover, the differences in pricing, tax rates, etc., deter users from purchasing across borders.
Implementing a multi-lingual site translated for customers who do not speak your site’s primary language can significantly attract customers and improve your conversion rates. In addition, using technology to enable easy conversion of currencies and appropriately taxing the products will also significantly contribute to growth.
14. Tight Marketing Budgets
With digital marketing becoming the norm for most ecommerce businesses, more companies are flocking toward their digital and social media ad spends. Unfortunately, with the demand for clicks and virtual advertising space increasing, so does the price.
As a result, online marketing can become very expensive for small and medium-sized retailers, which is one of the biggest ecommerce challenges they face.
Create specific customer profiles that will help your business target your social media and digital ads to improve your return on investment significantly.
15. Going Omnichannel
Selling your products through multiple channels increases your overall revenue and Average Order Value (AOV). A customer that shops on multiple channels is likely to spend three times more than the average customer.
However, if not done right, some channels might lead to losses if they don’t attract the right customers and the required volume of customers.
Use the data you receive from the different channels you operate on to identify the top performers, optimize them for your customers, and reduce your spending on the platforms that do not gain the traction you need.
16. Data Privacy
Customers today know the importance of their data and the need for data privacy. Device manufacturers like Apple are going the extra mile to ensure that their users’ data are kept safe from third parties. However, user data can also enable platforms to provide a better user experience.
Collect Zero-party data, where your customers will intentionally and voluntarily share their data with your brand, as opposed to collecting third-party data, which is what customers these days are highly cautious about.
Companies worldwide are affected by supply chain issues every year. Considering it is a layered process, problems, and errors occur at multiple steps, leading to added expenses and delays.
Gain visibility of your entire supply chain. Supply Chain Visibility enables you to track your inventory accurately and establish a transparent communication system that can help you stay up-to-date with different parts of the supply chain process. These issues are one of those ecommerce challenges that require time and effort but are also highly essential.
18. Store Agility
How rapidly can you roll out new features and post and market fresh content? Due to the rapid evolution of ecommerce, you must implement an agile company model. Staying relevant and up-to-date with trends is crucial for eCommerce businesses to survive, thrive, and provide their customers with the best possible user experience.
Agility is more of a process than a solution – ensure that your team is adaptable and has procedures to deal with internal and external changes to enable quick decision-making.
19. Meeting Consumer Expectations
Modern consumers are increasingly informed and aware of the advent of new technology and exposure to multiple brands and services. The modern consumer has high expectations for the products and services they pay for and is constantly looking for better experiences.
If you wish to solve this problem for your ecommerce business, a thorough awareness of contemporary web design trends is required. In addition, a careful examination of current trends will enable you to recognize the adjustments your company needs to make and assist in making them.
20. Ecommerce User Experience
This ecommerce challenge might come across as surprising – but the design and placement of essential elements, such as the navigation bar, tabs, etc., on your website can significantly impact your conversions and sales because your user interface contributes to the customer’s experience on your site. Users tend to be wary of ecommerce stores they cannot easily navigate.
Constantly improve your user interface design (UI,) utilize A/B tests to understand what designs your customers respond well to, and remove any unnecessary hindrances that hamper your users from fully engaging with your site.
According to Capgemini, 64% of consumers say that buying sustainable products makes them happy about their purchases (this reaches 72% in the 25-35 age group).
Retailers are now incentivized to market their goods and delivery services as having a low environmental impact due to the increased global attention on sustainability due to consumer demand.
Improve the efficiency of your supply chains and identify critical areas where you can reduce your carbon footprint for improved environmental impact.
Ecommerce Challenges Can be Opportunities
Surviving the fierce ecommerce competition requires outstanding strategies. Be prepared to address all possible ecommerce problems and focus on building a customer-centric culture.
This way, you may address customer service issues, find what makes your customers tick, and offer them an online shopping experience they’ll remember.
As with any era, 2023 – and the years to follow – will present a range of challenges: both new and age-old.
Ecommerce businesses are facing up to not only increasing pressures within their sector but broader societal, economic, and political forces. And while technology continues to present opportunities for online store owners, it also creates many potholes and pitfalls.
This post highlights the most common 21 ecommerce challenges online retailers face today and how, in each case, you can overcome these obstacles head-on. We are here to help!
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By Gregor Saita
Co-Founder / CXO