The Most Common Ecommerce Challenges for Online Businesses & Their Solutions

The online shopping industry has been growing at an incredible rate, and so have ecommerce challenges.

Listen to ecommerce challenges while you work:

For example, the rise of digitalization has transformed the way 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. 

To help you, we created a list of common ecommerce problems and solutions you can try:

1. The need for online identity verification
2. Delivering an omnichannel customer experience
3. Outshining the vast competition
4. The need to revamp selling tactics
5. Shopping cart abandonment
6. Maintaining customer loyalty
7. The headaches of product return and refund
8. The struggle of competing on price and shipping
9. Competing against retailers and manufacturers
10. The heightened demand for data security

1. The need for online identity verification

When a visitor goes to an ecommerce website and signs up, you need to somehow be sure that this is a legit person who wants to buy. This way, you'll avoid fraudulent accounts or bots which could result in revenue losses (especially with cash-on-delivery (COD) purchases).

Solution: Take proper steps to verify online shoppers' information. Always send a verification link when a customer signs up. With COD purchases, an automated call could even go out to the customer, asking them to validate the delivery address. Also, use automation to identify fake phone numbers and email addresses and check whether zip codes match with the state/city.

And of course, look out for signs of suspicious activity. This could take the form of particularly high value or large orders. 

2. Delivering an omnichannel customer experience

One of the biggest problems an online retailer faces is achieving an effective omnichannel customer experience. Customers expect they can reach out to your brand through any number of touchpoints, such as your website, phone, email, social media, your store, and more. All of these touchpoints need to be unified.

In fact, according to ecomdash, any business that isn’t moving toward an omnichannel retailing strategy will likely be left behind.

Solution: To create an omnichannel strategy that works, think about potential customer needs, and implement the right customer experience technology. Here are a few steps to follow to solve ecommerce challenges of this type.

• Identify key channels first. How are your customers reaching out to you? What channels do they prefer? 
• Integrate these channels. Use customer experience technology to talk to customers via their preferred channels (like phone, email, live chat, video call, online help centers or in-app messaging).
• Maintain context. Use interaction history to inform conversations. Unified view features on CX platforms can offer this ability.

3. Outshining the vast competition

Ecommerce is one of the most competitive industries. Variations in different parameters — costs, service, supply chain operations, and more — can make a huge difference for customers. Getting and maintaining your customer base is one of the most tough-to-crack ecommerce challenges.

For example, if one of your competitors strikes a partnership with a delivery app, this may help them get a greater market share. And that’s even if your prices or products are better.

Solution: Conduct thorough research into competitors and the market to develop your digital marketing strategy. Invest in promotional offers to help create a better brand presence. Remember that online businesses with customer loyalty programs, on average, are 88 percent more profitable than those that do not offer these programs.

Also, invest in better customer service. Furniture retailer Dufresne saw positive results when they took a step into digitizing support and sales.

4. The need to revamp selling tactics

One of the most pressing customer service issues in ecommerce is catching up to modern customer expectations. Many companies lack the necessary insight into customer behavior and buying patterns.

Solution: 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 easier.

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.

Want to deliver digital experiences that resonate with your customers? Listen to this podcast on how to improve your service and grow your brand on Shopify and beyond.

5. Shopping cart abandonment

Shopping cart abandonment is a huge ecommerce business challenge. Even ecommerce giants are not immune to it.

For instance, when brick and mortar heavyweight Nordstrom started an ecommerce portal, they witnessed big opportunity losses of ecommerce sales from abandoned carts. The tedious and bug-filled checkout process was causing customers to flee mid-purchase. This ecommerce problem can’t be ignored.

Solution: Nordstrom had to come up with a new checkout design, turning checkout into a much easier two-step process.

Consider redesigning your shopping cart, too. Remove bugs or unnecessarily long forms. Offer instant help tools that customers can use if they get stuck. Visual tools can also help address customer queries during the checkout process. For instance, if a customer has trouble creating an account, your agents can initiate a cobrowsing session to show them how to do it.

Applying this simple solution can greatly improve your shopping cart conversion rate.

6. Maintaining customer loyalty

Without customer trust and loyalty, your business is bound to 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. This makes interactions less personable.

This ecommerce challenge can only be solved through time and effort. Across multiple transactions, eventually, the company can build this trust and loyalty.

Solution: First make sure your customer service processes are effective, from ordering online to shipping. Also, consider:

• Displaying your address, phone number, pictures of staff, customer testimonials, and credibility badges on your website.
• Creating valuable content.
• Making customer service a priority over profit.
• Asking for customer feedback.
• Refining loyalty programs.

Related: Your Ecommerce Information Center: Get free Shopify educational resources to help you grow your brand and forge strong customer relationships.

7. The headaches of product return and refund

One of the problems faced by customers in online shopping is returning items. A survey by comScore and UPS, showed 63 percent of American consumers check the return policy before making a purchase and 48 percent would shop more with retailers offering hassle-free returns.

But, when a product is returned, the business suffers a heavy loss in shipment and reputation. Shipping costs in this case have always been an ecommerce problem to sellers.

Solution: You can't avoid having good return and refund policies. But, you can build your policies carefully and communicate them clearly. Consider the following tips:

• Be transparent. Never hide your policy hoping customers will not see it.
• Use plain English. It's important for these policies to be understandable to everyone, regardless of cultural background or education level.
• Set expectations. Provide different options for payments and shipping.
• Educate staff. They need to know your return policies to assist customers effectively.
• Be prepared to face the music. If the product is shipped wrong, take extra effort to keep the customer happy.

8. The struggle of competing on price and shipping

Despite customer experience being the most important thing for consumers, online merchants frequently compete on price, too. Price competition particularly affects small ecommerce businesses, as mid-sized and large competitors can often offer products less expensively.

For example, giants like Amazon and Walmart generally have shipping amenities distributed across the country. Their warehouses allow orders to be shipped from the closest facility. That way, the cost of distribution decreases and the order arrives really fast.

Solution: This is one of these ecommerce challenges that can make or break a business. It’s hard to thrive in a competitive market, but you can still find ways to distribute inventory to fulfilment warehouses. You can also become an extremely resourceful shipper, or find some unique products consumers won't be able to find elsewhere.

9. Competing against retailers and manufacturers

Many online stores bulk buy products wholesale from manufacturers or distributors, selling them online. This is the basic 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. The same company that sells your products may also be your competitor. 

For example, ABC Garments sells to your online marketplace and directly to consumers on its website. Even some of the manufacturers create distributors, making the scenario worse.

Solution: You can’t stop manufacturers selling products directly to customers, but there are a few tactics to try:

• 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.

10. The heightened demand for data security

Security issues can lead to nightmare scenarios. Fraudsters may post spam and infect websites with viruses. They can potentially gain access to confidential data about your customers' phone numbers, card details, and more.

Consumers, though, don't care what you do, they expect you to protect them fully. Security shouldn’t be seen as part of ecommerce challenges — it should be a bare necessity. 

Solution: To make sure your site is safe, here are some ideas:

• Manage your own servers.
• Don’t use common FTP to transfer files
• Employ cybersecurity services or engineers
• Have effective verification processes (as we mentioned in #1)

Also, if any developer copies files in an open Wi-Fi network, passwords and other confidential data can be stolen. By constantly updating the shopping cart, you can minimize the risk of stolen data. 

Most content management systems store their data in the database. Developers should take backups at regular intervals, retrieving the data if stolen.

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The Definitive Guide to Ecommerce Customer Experience

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 not only address customer service issues but you may also find what makes your customers tick, and offer them an online shopping experience they'll remember.

What ecommerce problems is your business facing? What solutions have you tried? Leave a comment.