With one third of the global population who partake in online shopping, businesses planning to provide online shopping services should be mindful of the many factors and challenges of running an e-commerce business. Below, we have a look at six of the biggest challenges which e-commerce platforms face.
Maya Hamad, founder of Emoteyes, says: “With more businesses going online, it’s imperative that businesses take the time to understand not only their existing customer behaviours but to also understand why some customers still choose to not shop online”.
- Trust
Many customers often find it challenging to find a site which they can trust. In addition to deciding whether to trust that the products sold is indeed what they want, customers often have a hard time disclosing their personal information on the internet, such as their address for shipping and their banking details. According to an article published by Plytix, 75% of online shoppers will only provide their personal information to a site which they trust (Plytix, 2020). Many fear the risk of being scammed by unfamiliar sites. To build trust, e-commerce retailers should make sure that they are transparent with their information, a refund policy is in place, and that there are contact details available.
- Competition
With an ample amount of online stores to choose from, e-commerce retailers are in constant competition with each other.
With an average conversion rate of only 3% (Business News daily, 2019), online stores need to make sure that their products are different and more affordable from the rest. E-commerce companies also compete in their website design, as online shoppers seek sites which are user friendly. A study on online shoppers showed that 17% of them abandon their shopping cart if the checkout process is too long or complicated, while close to 50% do so if the prices are too high (Media Post, 2018).
- Social proof (also known as reviews)
E-commerce platforms need to keep up their reviews and ratings in order to get more customers. Just like word of mouth, people doing online shopping check the reviews and ratings of a product or online store before making a purchase.
Statistics show that on average, people read close to 10 reviews before making a purchase, and are more trusting of the business if the reviews were made within the last two weeks (Media Post, 2018). With social proof, consumers feel a lot more comfortable with purchasing from your online store knowing that others have had a pleasant experience with your services/products.
- Globalization and Localization
E-commerce platforms need to cater for consumers from all over the world.
In an article released by Plytix, statistics show that with 60% of consumers doing cross border shopping, e-commerce platforms should include features which allow consumers to shop in their local currency and language. With that being said, e-commerce businesses should know that over 70% of consumers prefer to do their online shopping in their native language, while 90% prefer to shop in their local currency (Plytix, 2020).
- Payment Methods
While some prefer cash-on-delivery, there are others who prefer to do payments with their digital wallets such as PayPal. To avoid an abandoned shopping cart and the loss of a potential loyal customer, e-commerce businesses should offer a variety of payment methods to cater for the preferences of different consumers.
- E-commerce Fraud
E-commerce platforms should take the necessary steps to avoid revenue losses or legal issues from fake accounts. In 2020 alone, e-commerce businesses experienced an increase in fraud attacks with more people moving to online shopping as a result of the pandemic. Within the first half of 2020, results show that there has been over a billion fraud attacks resulting in a revenue loss of over $140 million (Security Magazine, 2020).
To stay ahead in the e-commerce world, businesses should meet the expectations of online shoppers as much as they do with their consumers face to face. In addition to increasing conversion rates and meeting the shopping needs of their consumers, e-commerce retailers are in constant competition with who has more to cater their website visitors.
