The 10 Biggest Challenges of Ecommerce

Ready to drill down into the top 10 challenges of ecommerce? Here they are:

1. Cyber security and avoiding ecommerce fraud
2. Targeting the right customers
3. Converting visitors into paying customers
4. Meeting customers’ high expectations
5. Offering high quality customer service and support
6. Creating customer loyalty
7. Competitive prices and shipping
8. Avoiding cart abandonment
9. Finding the right return and refund policies
10. Choosing the right tech partners

The only ecommerce challenge on our list to involve malicious intent, fraud is something online retailers need to be aware of.

Ecommerce fraud can take a range of forms: from someone using a stolen credit card to purchase goods, to so-called “friendly fraud” – where customers falsely claim the product bought online never arrived, and claim a refund via the issuing bank. (Who then, in typical bank fashion, claim that loss back from you – with a fee on top!)

Now, as the internet continues to evolve and offer ecommerce businesses more diverse routes to making money, so too are fraudsters changing with the times. Nowadays, emerging forms of ecommerce treachery include affiliate fraud, interception fraud, and even triangulation fraud.

To help safeguard you from ecommerce fraud, make sure your website’s payment system is up-to-date with the latest standards. One of the best defenses against online fraudsters is a strong online verification system. By asking your customers to verify their identity in ways only they know how – such as biometrics, a one-time password, two-factor authentication, and more – you can be sure it’s really them.

We have an in-depth guide on how to secure a website and how to spot ecommerce fraud if you want more information on this important topic,

It’s one of the first rules of business, and something every aspiring ecommerce store owner maps out in the executive summary of their business plan.

Who is your target audience?

This knowledge is instrumental to business success, and for obvious reasons: to sell effectively, you need to know who you’re selling to.

But in today’s day and age – where demographics, customer pain points, and market motivations are more fluid and flexible than ever before – understanding your target audience is plenty more perplexing than it used to be.

To combat this ecommerce challenge, map out a set of buyer personas. Though based, ideally, on real data, these are fictional “profiles”; archetypes of your ideal customer. Personas should include the customer’s pain points, goals, social media footprint, and where they go to for their primary source of information.

After putting your business’ unique personas together, put them into practice. Ensure any content you write, marketing emails you send, or search engine ads you put out are composed with this set of archetypes in mind.

Then, it’s time to start attracting those customers – something with which our detailed guide can help!.

While some slimy SEO agencies might tell you to focus on traffic as a key metric of site success, all ecommerce store owners know that people merely visiting your site doesn’t pay the bills.

They have to buy something, too. So how do you solve this age-old ecommerce challenge – and turn visitors into paying customers?

Well, the first thing to do is try and understand why your customers aren’t converting. Is it to do with your site? Misplaced 404-ing pages, an inconsistent UX (user experience), and even a single malfunctioning button can all be fatal to your attempts to turn a browser into a buyer. Be sure also to double-check your payment system is working, and that all the info on your store makes sense and is free of mistakes.

Alternatively, any issues with converting customers could lie with wider aspects of your ecommerce business’s positioning in the market. Are you targeting the right audience? Are you building a recognisable, memorable brand – and engendering trust in it?

Crack the case of why your customers aren’t converting, and – pretty soon – they will be.

In offering same-day shipping and a seemingly unlimited array of products to choose from, Amazon may have “revolutionized” ecommerce – and benefited the end customer in the process.

But that doesn’t mean it’s done retailers any favors.

In fact, the rising standards of convenience and quality ecommerce giants are now able to provide has only served to soar customers’ expectations. Which are easy to meet if you’re Bezos; not so simple for the average ecommerce store owner.

Herein lies the big ecommerce challenge for online business: how to meet (and surpass) those expectations without a big budget?

While the solution isn’t clear cut here, we recommend customizing the customer experience wherever possible. Personalization is already one of the cornerstones of ecommerce success – particularly when it comes to tailoring deals and discounts (i.e. through email marketing) to customers.

But as we enter previously uncharted ecommerce territory, the more you can make your offering relevant to the individual customer, rather than the masses, the more open your audience (and their wallets!) will be to it.

You’ll need to figure out a way to keep your regular customers engaged and loyal, too – more on that below!

With so many ecommerce businesses jostling for the same slice of the ecommerce market, there are remarkably few ways to differentiate your offering from your chief competitor’s. You sell super similar stuff, and your prices and policies are on a par. How can you stand out?

Customer service – that’s how.

And we don’t just mean responding quickly to customers calling to enquire (although that is part of it).

We’re talking about developing an empathetic, person-centric approach to customer service. That means responding with patience, warmth, and empathy to complaints – even the most grating ones – and acknowledging the pain points and frustrations of those looking to return or exchange goods.

Plus, customer support and service shouldn’t just be high quality – it should be highly convenient, too. The more ways you can offer customers to get in touch via the method that suits them (be it social media, live chat, phone, email, or through a contact form on your website) the more likely they’ll be to do so. And, ultimately, the more comfortable they’ll be dealing with your business.

So, if you haven’t already, implement live chat into your site. Or, if you don’t have the service resource, create a chatbot (like HubSpot’s, pictured) to automate it. Trust us – your customers will thank you for it!

Read our dedicated article on online customer service , and take a look at our customer service examples for more guidance.

The statistic that it’s more profitable to re-engage a current customer than acquire a new one is one that’s bandied around the internet ad nauseum.

But guess what? It’s absolutely true.

That makes customer retention vital. And, in turn, means that to savor sustainable success, your ecommerce business needs to find a way of cultivating that most elusive of attributes: customer loyalty.

So, how can you foster more engaged, involved customers? The answers are myriad. Our favorite, however, is content marketing.

Starting up a blog and posting regularly is just one of the ways you can add value to your customers – beyond simply providing them with a product or service they love. By creating content that’s relevant to your audience – and speaking in a tone they not only resonate with, but will come to recognize – means they’ll always find a reason to return to your site. (And potentially, to keep buying from it, too!)

Through content, you can also offer customized deals and discounts to re-engage lapsed customers – or to simply let them know you care.

If your business isn’t yet at the stage where you’re able to offer same-day delivery, don’t fret. Just 51% of all online businesses do – so the good news for small ecommerce businesses is it’s certainly not yet the norm.

The bad news? That pretty soon, it might be. With competition driving prices down and shipping rates going the other way, honest ecommerce businesses face an uphill challenge to compete. Is there a solution?

Well, you can start by auditing your current logistical setup. Are there any aspects of your current supply chain you could optimize to save cash? Could working with the right 3PL (third-party logistics provider) enable you to offer shorter delivery turnaround windows?

Would switching up your shipping carrier allow you to save money, or – better yet – offer free shipping? Looking to the customer, would a subscription model help you drive the prices of individual items down to compete with the big companies?

Alternatively, you could go the other way. And, instead of driving your prices down to compete with the lowest common denominator, lean into a more “premium” reputation: increasing your prices to convey the quality of your brand and service.

Are there two words more horrifying to the ears of online business owners than…”cart abandonment”?

Probably not. This ever-present menace remains one of ecommerce’s biggest challenges. So how do you combat it?

Start by auditing your checkout flow. Hire a couple of testers (don’t use friends or family: they need to be people without a pre-existing knowledge of your business) to “order” something from your site. Then, ask them to feed back on the process.

Was the checkout experience smooth and seamless? Simple? Did it inspire trust, and have a visual coherence, cohesiveness, and consistency with the rest of your website?

If not, try making the process easier by reducing the amount of information they’re required to input, and scaling back the size of your forms – or the number of steps needed to check out. Live chat tools – or automated chatbots – can help here too, by popping up to get the user unstuck at key friction points.

And, if all else fails and you lose that customer, why not go win them back? Via an intelligent approach to email marketing, you can target customers that didn’t finish converting with offers and discounts (on the very item they were contemplating purchasing) to lure them back in. Genius! Read more about abandoned cart emails here.

As we mentioned earlier, customer expectations are increasing. In the array of products they want to see, the prices they want to buy them at, the speeds at which they want them delivered at… and in how easy they are to return.

For ecommerce, this is one of the biggest challenges ecommerce will present. How do you find that balance between a simple, permissive returns policy – that is, one that’s attractive to the customer – yet one not so forgiving that it’s open to abuse by “friendly” fraudsters?

To strike this balance, honesty is the best policy. So be transparent about your returns policy – particularly its limitations – but avoid harsh phrasing all the same (“you must” and “you are required” are real mood killers).

When ecommerce businesses fail, a lot of the time it isn’t down to their idea or execution. It has nothing to do with their product or marketing strategy. Often, failure isn’t even down to that business’ people – but instead, the people they choose to partner with.

Whether it’s a misfiring tech platform or picking the wrong agency or consultant to help grow your business, the consequences of choosing bad partners can be dire.

Fortunately, this ecommerce challenge has an intuitive solution… pick the right one!

This is, of course, easier said than done. But no matter the platform or tech you’re selecting – be it a CRM system, inventory management software, email marketing tool, or shopping cart solution – ensure you’re doing your due diligence.

It’s important too, if possible, to pick tech that’s tailored to your specific industry. These partners have they’re fingers on the button of your sector and space, and know your pain points inside out – so they’re usually a safe bet!

As with any era, the years to follow will present a range of challenges: both new and age-old.

Ecommerce businesses are facing up not only to increasing pressures within the sector, but to wider societal, economic, and political forces. And, while technology continues to present opportunities for online store owners, it also creates a number of potholes and pitfalls along the way.

This article has highlighted our top 10 challenges of ecommerce to remain mindful of. And highlighted how, in each case, you can begin to leap these hurdles head-on.

So let us know how you get on in the comments, and – for more content relevant to your business and industry – check out the range of articles on Website Builder Expert. (This one, on how to sell online, is an excellent place to start!)