STUDIO FIVE

The Challenges of Running an Online Store

Running an e-commerce business can be both rewarding and challenging. In today’s digital age, where online shopping is at its peak, countless businesses face crucial e-commerce risks. This blog post will explore 15 challenges and practical strategies to overcome them.

Whether you’re a seasoned entrepreneur or just starting your e-commerce journey, understanding and tackling these obstacles will help ensure the success and growth of your online business. So, let’s delve into crucial e-commerce risks and discover how to conquer them confidently.

Why E-Commerce Can Be Risky

E-commerce is seeing unprecedented growth. While online shopping has advanced significantly over the last several years, it has become an indispensable service in the aftermath of the global pandemic. 

According to Statista, revenue in the e-commerce market will reach US$ 4,173.00bn in 2024. Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.50%, resulting in a projected market volume of US$6,568.00bn by 2029.

While an e-commerce platform eliminates the possibility of customers taking products from the store floor, digital enterprises have several distinct issues and risks. These e-commerce risks include data theft, fraud, malware, and other security breaches, as well as problems with third-party platforms, data privacy laws, internet security laws, and customer service issues.

Defeating Crucial E-Commerce Risks

Folks, we hate to do this! We like all of you a lot, and the last thing we want to do is make you unhappy. Unfortunately, we have some bad news for you today. Many of you have or are considering building an e-commerce store in 2024. And part of that is anticipating a few crucial e-commerce risks! Just like in the brick-and-mortar world, only some things will go your way with online sales!

In a previous post, we outlined a few tips for starting your e-commerce store. Today, we want to help you further understand these crucial e-commerce risks and what you can do about them! While they may sound scary, you should not let crucial e-commerce risks prevent you from launching your online store! Let’s look at what you are up against and how you can improve that.

15 Common E-Commerce Risks

Here at PixoLabo, we have been building online stores for global clients for 20 years, which gives us insight into e-commerce stores in general and those pesky but crucial e-commerce risks in particular. To help you understand these challenges to overcome them, we used them in the following categories.

1 – Online Security

The number of Internet users is increasing globally, which means the chances of hacking and data phishing are also rising. To protect your e-commerce store and online presence, be sure to use strong passwords and employ multi-layered security systems. This includes installing SSL certificates and utilizing secure payment gateways to give your e-commerce consumers trust and transparency.

Security concerns can lead to nightmare scenarios, with spammers and viruses threatening your online presence. The potential for unauthorized access to sensitive client information, such as phone numbers and credit card details, is a real risk. However, by prioritizing data security, you can ensure your e-commerce customers feel safe and protected.

Security difficulties when customers use credit cards and enter personal information are a regular e-commerce challenge for online retailers. Conversely, consumers don’t care what you do; they expect you to safeguard them thoroughly. Security should be seen as something other than one of the problems with e-commerce. Instead, it should be seen as a simple thing that everyone needs.

Solution: Install an SSL (Secure Socket Layer) Certificate. Ensure to use encrypted payment gateways. Only offer trusted payment options, such as major credit cards and mobile payment apps.

2 – Inadequate Online Identity Verification

When a visitor visits an e-commerce website and signs up, you must ensure that this is a legitimate buyer. You won’t have to deal with fake accounts or bots, which could cost money when you buy things with cash on delivery (COD).

Solution: Take the necessary steps to validate the details of internet shoppers. When a customer registers, always provide them with a verification link. With COD orders, an automated call may be placed to the consumer, requesting that they validate the delivery address. Use automation to look for fake phone numbers and email addresses and see if zip codes are correct for the state or city they belong to.

And, of course, keep an eye out for any signals of questionable activity. This type of activity could be in the form of exceptionally high-value or huge orders.

3 – Intellectual Property

As you launch your e-commerce presence, you can be sure your competitors are observing. One of our crucial e-commerce risks is the theft of your intellectual property. Your website images, product descriptions, logos, videos, music, and products could be copied by others or violate someone else’s intellectual property. Once you launch your online store, it may be too late to protect yourself.

Solution: Trademark and copyright your products and technology as part of your launch strategy.

4 – Customer Disputes

This is probably one of the most common crucial e-commerce risks you will face: the unhappy customer. Unhappy shoppers can have a big impact on your e-commerce sales. Fortunately, most customer disputes are relatively easy to resolve. Since they revolve mainly around products or payment, be sure to clearly state your return policy and don’t charge your customers until their order ships.

Sometimes, you may encounter a consumer who is already having a bad day. They may vent on you and your store without really meaning to.

Solution: Respond quickly and politely. If you ignore customer complaints, they can fester online, becoming a much bigger problem.

5 – Shopping Cart Abandonment

E-commerce shopping cart abandonment is a significant problem for online retailers; even the biggest names in e-commerce aren’t exempt.

For instance, when brick-and-mortar heavyweight Nordstrom opened an e-commerce platform, it experienced significant opportunity losses in e-commerce purchases due to abandoned carts. Customer abandonment was blamed on a lengthy and bug-infested checkout procedure. This e-commerce dilemma can’t be ignored.

Solution:  Enabling a two-step checkout process can help you optimize your e-commerce shopping cart and make it more user-friendly. Consider revamping your shopping cart, too. Remove bugs or needlessly long forms. Offer immediate support tools that clients can use if they get stuck.

Visual aids during the checkout process might also help answer customer questions. For instance, if a customer has problems opening an account, your representatives can launch a co-browsing session to educate them on how to do so. Applying this simple solution will dramatically enhance your shopping cart conversion rate.

6 – Warehousing and Logistics

Selling your products online and getting payment is one thing. The bigger problem is getting their purchases to your customers. Timely delivery of their purchase and shipment tracking information is critical to keeping happy online shoppers returning.

Solution: One way you can avoid problems is by not shipping your own products. Especially if you are a small online store, you are better off working with a third-party drop shipper or fulfillment service.

7 – Customer Service

Another crucial e-commerce risk is customer service, or more precisely, the lack of it. Many of your online consumers can only complete their purchase and checkout process with little help, especially if you have spent time building an effective e-commerce site.

But some consumers need a lot more help. Don’t keep them waiting! If you are too busy to reach out, consider adding a chatbot to your site.

Solution: Address potential consumer concerens ahead of time, and make it easy to contact you.

• Offer multiple ways for customers to contact you, and respond in a timely manner.
• Create and regularly update a frequently asked questions page.
• Clearly state your shipping and returns policy.
• Keep your checkout as simple as possible.

8 – Lack of Consumer Trust

Your online store will struggle if it lacks client trust and loyalty. Obtaining and retaining clients, on the other hand, necessitates a significant amount of effort. One reason e-commerce businesses need help creating client trust and loyalty is that the seller and buyer frequently don’t know or can’t see one another.

As a result, interactions become less personable. Online retailers can only overcome this e-commerce problem with time and effort. Eventually, the organization will be able to create this trust and loyalty through many purchases.

Solution: First, ensure that your customer service processes, from online ordering through shipment, are efficient. Consider the following:

• Your website includes your address, phone number, staff photos, client testimonials, and trust badges.
• Creating useful content.
• Making customer service a higher priority than profit is the same as making profit a higher priority than customer service.
• Requesting comments from customers.
• Refinement of loyalty schemes.

9 – Client Disputes and Refunds

One of the major concerns with online shopping in the e-commerce business is that clients can now claim refunds on disputed items. The most common reason for a dispute is the non-receipt of the ordered item after the customer’s credit card has been charged. Some customers are charged twice; other times, the product’s description differs from what the consumer receives.

However, when a product is returned, the company suffers a significant loss in shipment and reputation. Shipping costs have always been an issue for sellers regarding e-commerce.

Solution: Having good return and refund procedures is crucial. However, you may need to craft and express your policies effectively. Consider the following suggestions:

• Avoiding the distribution of erroneous products.
• Make sure all things have been dispatched and delivered before charging the buyer.
• Use a unique tracking number for every order.
• Scanners that read barcodes reduce the possibility of payment-related mistakes.
• Be open and honest.
• Set your expectations. Provide a variety of payment and shipping alternatives.
• It would help if you educated your staff. Employees must be aware of your return rules to help clients successfully.

10 – E-Commerce Taxation

E-commerce taxation has always been a tricky problem for online store owners. You might not be including the appropriate sales tax in your sales, or you might not be paying fair shipping and/or import taxes, depending on your shipping destination.

But a Supreme Court decision changed all that. Up until now, e-commerce stores without a physical presence in a US state did not have to collect sales tax in that state. That has changed, and online retailers must collect applicable sales taxes in every state.

Solution: This article explains what every e-commerce entrepreneur needs to know to manage sales taxes with confidence.

11 – E-Commerce Marketing

Another crucial e-commerce risk is also the one most business owners overlook. Of course, you market your e-commerce presence to increase your reach and engagement. But search algorithms change constantly. If you want to support your long-term e-commerce objectives, update your marketing strategies accordingly.

Maintaining modern consumer expectations is one of the most critical concerns in e-commerce customer service. Many businesses need help with the required knowledge about how their customers behave and what they buy.

Solution: Conduct extensive research on rivals and the market to design your digital marketing plan. Invest in promotional deals to improve your brand’s visibility. Remember that internet firms that offer customer loyalty programs are 88% more profitable than those that do not. Customer loyalty programs make online retailers more profitable. Invest in excellent customer service as well.

Consider selling your items on well-known marketplaces like Amazon and eBay. These e-commerce platforms already have a vast network of purchasers, so pitching and branding your goods (and figuring out what works and what doesn’t) becomes more manageable.

Segment your data as well. Online retailers can use multiple factors and categories to group people for e-commerce: customer journeys, previous conversations, geographic location, browsing habits, referral pages, and more.

12 – Search Engine Ranking

Among the many e-commerce concerns, SEO and digital marketing for your company can pose a significant risk. Google’s algorithms are constantly changing, which substantially impacts your ranking. A low SEO score means less website traffic, leading to fewer purchases. As a result, you must also concentrate on your e-commerce business’s digital marketing.

Solution:

• If you need a good SEO expert to handle your internet marketing, your website traffic could stay high.
• Find the most appropriate keywords to market your products.
• Use the correct tools to find what you’re looking for.
• Create a solid social media strategy.

13 – Emerging Technologies

While emerging technologies such as augmented reality (AR), virtual reality (VR), and voice commerce present exciting opportunities, their integration poses a significant challenge for e-commerce businesses. Integrating these technologies requires substantial investments in infrastructure, employee training, and technology partnerships. Striking the right balance between innovation and practicality is essential to avoid the pitfalls associated with premature or disjointed technology adoption.

Integrating new technology into an e-commerce business holds immense potential benefits but has its share of challenges. These obstacles encompass substantial costs, a staff learning curve, the looming risk of data breaches, and the ever-present possibility of technological failures or malfunctions. Awareness of these challenges is paramount, and you must take proactive measures to mitigate them effectively while integrating new technology.

Solution: Consider adding e-commerce industry 4.0 technology, including the Internet of Things (IoT), artificial intelligence (AI), and blockchain, to enable personalized, secure, and convenient shopping experiences.

14 – Multi-Channel Support

Creating a seamless omnichannel shopping experience for customers is a significant challenge for every online store. Customers anticipate they can reach out to your brand through any number of touchpoints, such as your website, phone, email, social media, store, and more.

All of these touchpoints need to be unified. Creating an omnichannel customer experience in retail allows companies to communicate with customers on all channels. Any organization must move toward including an omnichannel retailing strategy.

Solution: To design an omnichannel strategy, consider prospective customer needs, and adopt the correct customer experience technologies. Here are a few procedures to follow to tackle e-commerce difficulties:

• Start by identifying the most important distribution channels. What methods do your clients use to contact you? What networks do they prefer?
• Integrate these channels well. Use customer experience technology to talk to customers via their preferred channels (such as phone, email, live chat, video call, online help centers, or in-app messaging) (like phone, email, live chat, video call, online help centers, or in-app messaging).
• Keep things in perspective. Use interaction history to inform dialogues. Unified view features in CX platforms can offer this capacity.

15 – Competition from Retailers and Manufacturers

Many internet retailers acquire in bulk from manufacturers or distributors and resell them online. This ability is the fundamental e-commerce business model. However, because of the low barrier to entry in e-commerce, product makers and retailers have also begun selling directly to customers. Your competitor could be the same company that sells your items.

Solution: Even though it’s impossible to stop manufacturers from selling their products directly to customers, there are a few things you can do:

• Give priority to manufacturers less inclined to sell directly to customers.
• To enhance sales, provide the goods at a reduced price or with additional features.
• Stating this in the contract limits the manufacturer’s ability to sell the goods directly to customers. This restriction will only be possible for some manufacturers, but working with smaller ones in this way is possible.

Dealing with Crucial E-Commerce Risks

Now that you understand what crucial e-commerce risks you need to anticipate, you can plan ahead. We already outlined the basic steps above, so follow them. Many of you already maintain your e-commerce store so that you can handle this on your own.

But keep in mind that e-commerce platforms each come with their challenges. Therefore, dealing with these crucial e-commerce risks may require additional help from your web designer or developer. If you need a web designer or developer, here is a Guide To Hiring a Web Designer.

In conclusion, launching and maintaining a successful e-commerce store requires careful consideration and strategic planning. While many business owners are familiar with building an online presence and optimizing the shopping experience, they often need help with their progress.

With that in mind, we have addressed 15 crucial e-commerce risks and provided actionable solutions to overcome them. By implementing these strategies, business owners can overcome obstacles and enhance their chances of success in the competitive online marketplace. For further assistance and more detailed information, please do not hesitate to contact us.

Let Us Help You Defeat Common E-Commerce Risks

Do you want to defeat e-commerce risks and boost your online sales? Our professional e-commerce designers will gladly help you with these crucial e-commerce risks. We are experts at carefully building and maintaining mobile-friendly e-commerce websites to meet (almost) any budget.

Contact us if we are a good fit for your e-commerce web design needs! We offer a full range of consulting and design solutions for businesses and product brands.

And if you are still trying to figure out exactly how these crucial e-commerce risks will impact your e-commerce sales, don’t worry! Reach out and contact us. Our expert team will listen to you, answer your questions, and determine the best way for your e-commerce site to deliver the experience your visitors expect. That is one of our specialties, after all!