There has never been a better time to run an eCommerce business. With US retail eCommerce sales in Q1 2021 amounting to USD 196.7 billion, the eCommerce sector is inarguably booming. This means more opportunities for both new and existing eCommerce businesses.

However, opportunities don’t come without challenges. While eCommerce sales are growing, so are the number of eCommerce players entering the market. The competition is fierce, and it’s more difficult than ever for new companies to enter the market and set themselves apart.

While these eCommerce challenges may seem daunting, there is always a way around. By implementing the right strategies, eCommerce businesses can overcome these eCommerce challenges and enjoy the ride to success.

Let’s discuss some major challenges of eCommerce and how you can overcome them.

Increasing and Evolving Customer Expectations

The number of people shopping online has increased drastically over the past couple of years. Research shows that all online shopping categories in the US are projected to surge after the pandemic, with accessories, jewelry, and self-care products expecting the highest spikes.

Certainly, the demand for online shopping is on the rise, and it comes with rising expectations. Modern-day online shoppers expect eCommerce brands to offer:

  • Free returns and shipping
  • Multiple payment methods
  • Personalized shopping experience
  • Reliable customer service
  • Intuitive and responsive mobile apps and websites

Catering to all these requirements can be one of the major eCommerce challenges for businesses. Furthermore, a significant level of uncertainty continues to surround the eCommerce sector. It’s impossible to predict the state of eCommerce, especially non-essential products, once the world becomes pandemic-free.

Ever-Increasing Competition and Market Saturation

There are more than two million online B2C retailers in the US, and this number is only going to increase. The pandemic has forced various brick-and-mortar store owners to start selling online, resulting in an influx of new online retailers in the market.

For eCommerce businesses, this means more competition. The market is saturated, and in order to succeed, companies need to stand out and set themselves apart. It’s essential to keep improving your offerings, marketing, and customer experience to maintain an edge over others.

And you’ll still need to battle with giants like Amazon, eBay, Walmart, and The Home Depot that have captured more than half of the US eCommerce market.

Thus, eCommerce brands need to find a way to stand out, and this boils down to how you present yourself in front of your customers. What makes you different from other eCommerce retailers out there?

Difficulty in Attracting Customers

Another one of the major eCommerce challenges companies are likely to face in 2021 is attracting customers and driving sales. Two main factors that make customer acquisition in eCommerce more difficult than ever.

First, eCommerce conversion rates are declining. The average eCommerce conversion rate in the US in Q3 2019 was 3.56% for desktop, 1.51% for mobile, and 3.48% for tablet. In Q3 2020, the figure remained almost the same – 1.68% – for mobile devices, but the conversion rates for Desktop and Tablet devices plunged to 2.59% and 3.41%, respectively.

Not that people have stopped shopping online, but they have become more conscious and selective. This brings us to the second customer acquisition challenge – increased selectivity. Customers have become increasingly aware of the brands they trust and shop from, making it difficult for new eCommerce businesses to get sales.

Therefore, eCommerce brands need to focus on building trust and credibility. You can do this by sharing customer success stories, offering seamless returns, and more.

Nailing eCommerce and Technical SEO

Ranking high on search engine results and getting high-quality organic traffic is the key to sustainability and business survival for eCommerce businesses. This asks for robust eCommerce SEO services implementations, which is one of the biggest eCommerce challenges faced by online retailers.

Google has different SEO guidelines for eCommerce websites, and these guidelines are always evolving. Furthermore, there are myriad signals and metrics that Google identifies to rank websites on search engine results.

And if you manage to overcome this roadblock, technical SEO will be your next challenge. An eCommerce store needs to be technologically sound that not only satisfies Google’s algorithm but simultaneously provides the best possible experience to consumers.

Implementing and Using the Right Technologies

Sales and marketing automation is on the rise, and eCommerce businesses need to adapt. However, it’s easier said than done. As an eCommerce development company, you need to oversee a plethora of operations, including sales, marketing, order management, inventory management, customer support, and the list goes on.

Manually managing all these tasks can have an adverse impact on your operational efficiency. It can increase your expenses and lead to errors and inconsistencies. The right technology and software tools are capable of resolving these challenges and automating most eCommerce processes.

However, not many eCommerce companies have technologically proficient teams, which can make it difficult to adopt, implement, and utilize technology.

ECommerce brands can address these eCommerce challenges by:

  • Deploying a tech-proficient team that specializes in leveraging technology to streamline business operations
  • Implementing the right software tools as per requirements, such as Customer Relationship Management Software, Inventory Management Software, Customer Helpdesk Software, etc.

Driving Customer Loyalty and Repeat Purchases

The importance of customer loyalty can’t be overstated. Here are two stats that showcase why driving customer loyalty should be a priority for businesses.

While customer loyalty is paramount for eCommerce businesses, it’s difficult to achieve. Customers nowadays have practically unlimited options, making customer retention one of the most prominent eCommerce challenges.

To overcome these eCommerce challenges, brands need to go beyond offering good-quality products and competitive prices. You need to provide exceptional customer service, personalized experiences, and special loyalty perks so that shoppers have reasons to return to you.

Getting the Pricing Right

As discussed, the eCommerce market is saturated, with more than two million online retailers in the US battling for customers’ attention. For new businesses, dropping down their prices is the only effective way to get easy attention and undercut their competitors.

However, when it keeps happening, customers get accustomed to low prices. In the future, if you wanted to increase your prices, customers would likely be unwilling to spend more.

ECommerce websites that sell generic products will have an even harder time. For example, Apple sells one-of-its-kind products, and it has never found the need to lower its prices. However, Android smartphone manufacturers have to continuously fight for prices as customers have too many options to choose from.

ECommerce businesses can solve this issue by implementing a dynamic pricing system. There are dynamic pricing tools that automatically update product prices based on industry, global, and local pricing trends.

Managing Product Returns and Refunds

Let’s face it. No eCommerce brand enjoys product returns and refunds. But that’s a part of the eCommerce game, as 60% of online shoppers look at a retailer’s return policy before making a purchase. Simply put, if you don’t offer a flexible and transparent return policy, you’re at risk of losing potential customers.

Moreover, product returns are on the rise. At least 30% of all products ordered online are returned, costing eCommerce businesses around USD 50 billion.

While returns are inevitable, you can reduce their likelihood by making a few changes to the way you operate. Some common reason why shoppers return products are:

  • Received wrong product
  • Received damaged goods
  • Product looks different

By addressing these challenges, online retailers can reduce the chances of product returns.

Ensuring Seamless Customer Experience

Customer experience is the Holy Grail of success as an eCommerce business. Almost 90% of customers will stop buying from an online store after a poor customer experience. Therefore, providing a seamless customer experience has become the top priority for most companies.

However, there’s a problem. Customer expectations are constantly changing. At one moment, customers want to be able to buy everything online. At the next moment, they want to buy the exact same product at the exact same price that they found online.

Thankfully, eCommerce brands can deploy several strategies to improve the overall experience of their customers. The easiest way is to have a simple, clean website that enables effortless navigation. The next thing you can do is have clear calls to action (CTAs) so that users know what they need to do.

Some other effective techniques to improve eCommerce customer experience are:

  • Delighting your customers with thank you emails, free gifts, loyalty programs, and referral programs
  • Surprising your shoppers by offering unexpected discounts and offers
  • Building a community to engage customers
  • Engaging customers on social media
  • Delivering personalized omnichannel customer experiences

ECommerce Challenges: Wrapping Up

ECommerce has always been a lucrative industry, and the pandemic has only made it bigger. But it doesn’t come without its unique set of eCommerce challenges. eCommerce companies need to overcome these challenges of eCommerce to set the foundation of a sustainable business.

So, which eCommerce challenges are you facing, and how do you plan to overcome them?