Running an e-commerce business can be very rewarding personally and financially, but store owners face many hurdles. As evidenced by the onset of the pandemic in 2020, some obstacles are unpredictable and out of the control of the business owner. That said, having a solid understanding of the potential issues your company could face in any given year can help you take on these problems when, or if, they occur.
This article is intended to help you navigate this new year by presenting a few predictions — and some helpful solutions — for what may be in store. Here are the 8 most important e-commerce challenges that await you in 2022.
Uncertainty
The Challenge
The future is unknowable. Will e-commerce sales continue to rise at the pace of previous years, or was the recent increase a temporary result of the pandemic? Are consumers hooked on online shopping, or will they return to brick-and-mortar stores post-pandemic?
Helpful Solutions
If you have a physical store, make sure your e-commerce and in-store shopping experiences are as similar as possible. This means providing the same levels of customer service and ensuring that your online and brick-and-mortar stores work together (think to buy online, pick-up in store). E-commerce store owners should add personalization tools and chat options to their websites and offer an augmented reality feature so shoppers can “try on” clothing and furniture before buying.
Competition
The Challenge
You aren’t the only one selling your type of product online. The more popular online shopping becomes, the more competition you should expect to have. And some of your competitors may be investing more in their websites than you are.
Helpful Solutions
Simply put, you must be better than your competitors. Offer more products, optimize pricing, improve the shopping experience, provide more personalization and make sure that your shipping/delivery options are at least as good as those of your competitors. Determine exactly who your customers are and what they want, and target them correctly.
Customer Loyalty
The Challenge
Keeping your existing customers is not only more cost-effective than acquiring new ones, but selling to current customers is also easier than selling to prospects — and loyal customers generally spend more. Remember: If your website no longer offers what your customers desire, they will shop elsewhere.
Helpful Solutions
Because making lifelong customers goes a long way toward growing revenue, maintaining customer relationships should be among your top priorities. Retain your customers by providing excellent service, communicating via their preferred methods, creating reward programs, and offering special deals, promotions, and inside information about new products.
Technology
The Challenge
E-commerce is powered by technology, and technology is always evolving. Does your business utilize the latest online retail technology? Do you know what tools or technologies are required to support a modern, customer-centric online shopping experience?
Helpful Solutions
Good technology is fundamental to e-commerce success. Technology can help you generate leads, boost sales and develop strong customer relationships, so be sure to monitor changes in technology. If you don’t have an IT person or department that can do this on a continual basis, consider partnering with a company that specializes in e-commerce technology.
Security
The Challenge
Without robust security, your site may be breached, and your customers’ personal information can be stolen. The resultant publicity can irreparably damage your brand’s image and your company’s reputation, virtually destroying your business.
Helpful Solutions
Select a secure web host and e-commerce platform. Ensure that your site complies with the latest payment card industry (PCI) standards and obtain an SSL certificate that encrypts data as it passes between your site and the user’s browser. Install security plugins that check for vulnerabilities to help prevent cyberattacks and firewall applications to prevent unauthorized access to your website. Back up your data daily; while this won’t prevent a security breach, it will reduce the extent of the damage.
Inventory Control
The Challenge
The popular just-in-time approach means that inventory levels are kept close to zero. While this reduces waste and saves money in “normal” times, seasonal shortfalls and supply chain disruptions — such as occurred during the pandemic — result in businesses being unable to meet demand. When shoppers are willing to buy but you have no products to sell, you may lose your customers for good; at the very least, your brand takes a hit.
Helpful Solutions
Research and install inventory management software. Such software has tools to help you keep track of your inventory, ensuring that you have products available in the amounts needed to serve your customers. Good inventory software warns you when products are running low and alerts you when they are over-stocked. It lets you know when to reorder and tracks sales patterns, so you know when you need to stock up (e.g., during certain seasons).
Shipping Prices
The Challenge
Competing with Amazon’s free shipping on millions of products is extremely difficult. To do so, e-commerce companies must find ways to decrease their shipping prices.
Helpful Solutions
Raising product prices across the board lets you offer “free” shipping while maintaining consistent profit margins. Consider providing free shipping on orders over a specific dollar amount or offering shoppers a subscription program that includes free shipping for members. If shipping costs are lower at certain times, such as during certain seasons or months, pass the savings on to your customers. Try to lower your shipping costs by negotiating better rates or partnering with a lower-priced carrier.
Return/Refund Policies
The Challenge
Customers like the option to return items. This is especially true for online shoppers who lack the ability to try something on, feel its texture or see a product’s exact color before purchasing. While returns may not be good for your bottom line, having a no-return policy is worse — an e-commerce business with a strict no-return policy may find itself with no customers.
Helpful Solutions
Create flexible return and refund policies. This not only increases customers’ confidence when buying on your site but also improves your customer satisfaction rating. When accepting returns, be sure to note the reason, check the product’s condition upon receipt, promptly refund the customer’s money or credit the account, and restock items in like-new condition. Take the time to evaluate the reasons for returns; if a particular product is often returned for quality issues, then stop selling it.
CONCLUSION
While you cannot foresee all the challenges that will arise in 2022, you can prepare in ways that will mitigate potentially negative impacts. How? Plan ahead! Perform a thorough competitive analysis, upgrade your technology and security, and develop policies that will help you retain satisfied customers. Doing these things and doing them well should ensure that your e-commerce business not only survives but also thrives in 2022.
