Back in the day, you can sell just about anything and make crazy money. Competition was minimal, technology wasn’t as affordable as it is now and access to product was limited. Now, Amazon is a major competitor to everyone. China is opening up to the world and technology is now affordable. The e-commerce industry has become so fierce, that surviving has become a matter of concern. With internet fostering the birth of many newcomers threatening reputed players, the need for differentiating on the basis of customer service experience has become as critical in modern times. This article will discuss a few e-commerce challenges that players face. The information here is based on research by Cyriac(2015) and Assan(2017).
Challenge #1: Lack of Verification Measures
Once a customer signs up in an e-commerce portal, the portal is unaware about the customer except the information he/she entered. The credibility of the customer is questionable. This heightens when the customer issues a Cash-on-Delivery (COD) purchase because the business is unsure whether the customer is genuine or not. These have resulted in huge revenue losses for many e-commerce players.
Challenge #2: Selling the Right Product
Shopping cart platforms like Shopify have eliminated many barriers of entry. Anyone can launch an online store within days and start selling all sorts of products. Amazon is taking over the eCommerce world with their massive online product catalog. Their marketplace and fulfillment services have enabled sellers from all over the world to easily reach paying customers. Let’s not forget about Aliexpress. They’ve simplified product sourcing by giving access to Chinese manufacturers within a couple of clicks.
All of this has made it very difficult for retailers to source unique products unless you they decide to manufacture your own.
Challenge #3: Product Returns and Refunds
When products are returned because customers are unsatisfied with the product, it scars the business with heavy loss on shipment and reputation. Cost of logistics have always been an issue for e-commerce players especially for those who deliver for free.
Challenge #4: Customer Loyalty
E-commerce industry is an industry where the cost of switching is pretty insignificant. A lot of players have lost customers because their rivals have a better quality of customer service, or better discounts. Knowing that 86% of clients stop doing business with a company because of poor customer service, you need to ensure customer service is always a priority for your online business and part of your retention strategy. Customers demand consistent and seamless experiences across all channels, and players that refuses to deliver fail to retain customers.
Challenge #5: Achieving Long Term Sustainability
Increasing sales is one way to grow the business but in the end, what matters most is profitability. Online retailers must always find ways to cut inventory costs, improve marketing efficiency, reduce overhead, reduce shipping costs and control order returns.
Challenge #6: Choosing Right Technology and Partners
Some online retailers may face growth challenges because their technology is limiting them or they’ve hired the wrong partners/agencies to help them manage their projects. Retailers wanting to achieve growth must be built on a good technology foundation. They must choose the right shopping cart solution, inventory management software, email software, CRM systems, analytics and so much more. In addition, hiring the wrong partners or agencies to help you implement projects or oversee marketing campaigns may also limit your growth. Online retailers must choose carefully who to work with.