On the whole, the Web is buggy, but an online store cannot afford to be. Paul Graham, YC
In the era of the Internet revolution, the e-commerce industry is the brightest star! According to Statista.com, in 2015 retail e-commerce sales amounted to 342.96 billion US dollars and are expected to exceed 600 billion US dollars in 2019. The numbers clearly explain the power of the e-commerce industry.
This does not mean that all e-commerce businesses are making money steadily. Small and large businesses alike must deal with various challenges. Growing the business in e-commerce is the hard part. You have to take care of everything from website maintenance to customer service.
Below are the main problems faced by most e-commerce businesses:
1. A lack of online identity verification
When a visitor visits an e-commerce website and registers, the portal knows nothing about the customer except the information they entered. Whether the customer is genuine or not is questionable. This creates enormous revenue losses for a business when a customer makes a cash-on-delivery purchase and the information entered, such as the phone number, matches an invalid or fictitious address.
Solution:
This problem can be solved by taking appropriate steps to verify customer information. First, recognize the signs of suspicious activity, for example, if customers place very expensive or large orders, detect fake phone numbers or email addresses, check the postal code to verify whether it matches the state or city. In addition, when a customer registers, send them a text message or email to validate their authenticity. And when a customer makes a cash-on-delivery purchase, an automated call can be placed to ask them to validate the delivery address.
2. Competitor analysis
You can’t look at the competition and say you’re going to do it better. You have to look at the competition and say you’re going to do it differently. Steve Jobs
In this competitive world, too many competitors will offer the same products and services as you. Unless you have the best strategy that sets you apart from other competitors, it will become hard to survive.
Solution:
Carry out thorough and appropriate research on your competitors. Put your efforts into developing a strategy that lets you shine brighter than your competitors. Use social media platforms and blogs to promote your products. Invest in promotional offers; this will help increase web presence and customers.
« Les entreprises bénéficiant des programmes de fidélisation des clients sont en moyenne 88% plus rentables que les clients qui n’en ont pas. »
Do research to determine which new products are most in demand and remove old, unwanted items that are less searched for. By offering optimal and extraordinary customer service, you can even afford to stay one step ahead of your competitors.
3. Retaining the customer
No matter how attractive or enticing your website is, if you fail to win your customers’ trust and loyalty, the business will have to fight another day!
It takes a lot of effort for businesses to win new customers and keep the same customer for a long time. One of the reasons online businesses face difficulty in building customer trust and loyalty is that a seller and a buyer don’t know each other and can’t see each other when they carry out a transaction, unlike traditional shopping. It takes few transactions, time and enormous effort to build customer trust and loyalty.
Solution:
Customer service is what you and your organization provide. Customer loyalty is the result of the service. Shep Hyken
To retain your customers, you must provide excellent customer service. From the online order to delivery, you must make sure the customer is satisfied with your service. Many online retailers could sell the same product as yours. So you must identify your competitive advantage and nurture your customers accordingly.
A few simple ways to increase trust with visitors are the following:
- Display your address, your phone number and photos of staff, customer testimonials and credibility badges on your website.
- Add a live chat option to the site.
- Create blogs. Blogs often help e-commerce build a climate of trust.
- Make customer service a priority before profit. Always remember that it is always easier to keep an existing customer than to find a new one.
- Create loyalty programs. Since points aren’t transferable to other companies, the customer will certainly make their next purchases on your sites.
4. The headache of product returns and refunds
In a survey conducted by ComScore and UPS, 63% of American consumers checked the return policy before making a purchase and 48% shopped more with retailers offering hassle-free returns. This clearly shows how aware consumers are of the return and refund policy.
When the product is returned, for any reason, whether the customer is dissatisfied or the product was damaged, the business suffers a heavy loss in shipping and reputation. Logistics and shipping costs have always been frightening for online sellers who deliver the product for free.
Solution:
Returns and refunds are also part of excellent customer service. Therefore, it would be a big mistake to underestimate them. The best thing to do is to set up a strong return policy. The following points should be taken into account when designing the return policy:
- Never hide your policy. Be transparent.
- Use plain English that even laypeople understand. Not all of your customers who read the policy will be highly educated.
- Don’t use scary elements in the policy such as “you must”, “you are required”; a policy that is too strict can prevent the customer from buying the product.
- Describe what they can expect from you. Provide them with various options for payments and shipping.
- Inform your staff about your return policy. That way they can help customers quickly and efficiently.
- Be ready to bear the cost of your mistakes. If the product is shipped incorrectly, go the extra mile to make the customer happy.
5. Price and shipping competition
Online merchants often compete on price. Many sellers can list identical products on their sites. The product is identical but the only difference is the price. They try to sell the product to increase their market share.
Price competition badly affects small e-commerce businesses. Because mid-sized or large competitors often offer products at lower prices and with free shipping on almost all orders, while they couldn’t afford to offer the same at competitive prices.
Online sellers like Amazon and Walmart generally have the same shipping conveniences across the country. Their distributed warehouses allow large e-commerce companies to send orders from the nearest facilities. About 60% of orders are in the same area where the customer is located. As orders are shipped from nearby warehouses, the cost of sending the order decreases and the order arrives in a day or two.
Ultimately, every online shopper expects fast, free delivery at the lowest price.
Solution:
To survive in the competitive market, e-commerce businesses must spread their own inventory across distribution warehouses, become extremely clever shippers or find unique products to minimize this problem. Because in the end, every online shopper expects fast, free delivery at the lowest price.
6. Competition against retailers and manufacturers
Many online stores buy products wholesale from manufacturers or distributors to resell them in their online store. This is the basic business model for online stores.
Unfortunately, because of the low barrier to entry in e-commerce and other reasons, many manufacturers and product retailers are starting to sell directly to consumers.
The same company that sells your products may also be your competitor. For example, ABC Garments not only sells on your marketplace, but also directly to consumers on its website. Even some manufacturers are building distributors, which makes the scenario worse.
Solution:
While it is not entirely possible to prevent the manufacturer from selling products directly to customers, a few tactics can help minimize the problem. Here are tactics that could help the online seller:
- Prioritize buying from manufacturers who are less likely to sell directly to customers.
- Offer the product at a lower price or with an extra benefit to increase sales.
- Restrict the manufacturer from selling the product directly to the customer by applying strict policies and rules when concluding the contract. This will not be possible for every manufacturer, but you can deal with the smaller ones.
7. Data security problem
Web security problems can lead to a nightmare. Fraudsters send a lot of spam and can attack the web host server and infect all websites with viruses. They can access all your confidential data concerning your customer’s phone number, card details, etc.
Solution:
Manage your own servers and don’t use common FTP to transfer files. FTP is prone to theft. If a developer copies a file over an open WiFi network, they risk losing passwords and other confidential data to a thief. By constantly updating your cart, you will reduce the risk of data theft. Most content management systems store their data in the database. Developers must perform backups at regular intervals and recover the data in case of theft.
The final word:
Surviving in e-commerce, which is nothing less than a war, requires exceptional strategies. If you don’t want to fight, put extra effort into every aspect of your business. You must be ready to face challenges and growth at every stage of your business. In the end, it will have a better chance of flourishing.
Did you find this article helpful? Let us know, and if you would like to know how we can help your new business, or if you would like to learn more about our e-commerce website development services, do not hesitate to call us at 1-877-426-7272 or use our contact form in the menu above.
