Seven Important Pains for On-Line Sellers

Seven Important Pains for On-Line Sellers
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by Sanjeev Kapoor 06 May 2019

E-commerce and online transactions are without doubt among the most important trends of our time. People are increasingly purchasing goods and services on-line, and this is expected to grow in the years to come. Amazon, the most prominent on-line shop worldwide has an annual turn-over that is already more than four times the turn-over of traditional retailers such as Wall Mart. At the same time, the on-demand economy and the unprecedented rise of smart mobile devices are driving an increase of on-line sales.


In this landscape, e-shops and on-line sellers are under pressure to drive traffic in their web sites, convert web visits to on-line sales and ensure that they can sustain competition from other on-line shops. Converting shoppers into paying customers and providing services that can retain these customers have always been two of the most challenging pains for on-line retailers. In recent years, additional pains have been added given changes in the ways on-line sellers advertise their products, service customers, personalize their e-shops, provide support for omni-channel e-commerce, reach to customers at global scale and more.

As a result, on-line sellers are currently facing some entirely new challenges.


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Challenge #1: Delivering Personalized Products and Shopping Experiences at Scale

E-shops are nowadays obliged to deliver personalized products and services, as this is something customers take for granted. Personalization is no longer limited to sending individualized e-mails or personalizing the navigation experience in an e-shop through recommendations and customer centric browsing features. Rather, personalization means providing customers with a wide range of options in order to let them select the ones that meet their needs. Such options may for example involve a variety of shipping choices (e.g., from free shipping to privileged “same day” shipping), as well as personalized products (i.e. build your own product) as part of a mass customization approach.  Providing such options at scale is easier said than done, as it requires complex service level agreements with other service providers, along with integration of novel supply chain technology and practices such as rapid communication of product lifecycle information across the value chain. However, on-line shoppers that will be able to provide personalization at scale are likely to be set apart from their competitors.


Challenge #2: Ensuring International Presence & Outreach in the Era of Globalization

On-line shops must nowadays operate in a global environment. This is no longer a matter of supporting cross-border payments and translating web site content in multiple languages based on some internationalization framework and related tools. Rather, e-shops that operate globally need to consider a much wider range of parameters that are peculiar to specific countries. Such parameters include the currencies used, the internet penetration in each target country, the navigation habits of the on-line shoppers, as well as the overall culture of e-shop users in a given country. The consideration of all these parameters is not a trivial task, as it requires a complete rethinking of the e-commerce content and workflow for each target country, beyond simple localization and cross-border transactions.


Challenge #3: Providing Omnichannel Services

In recent years the vast majority of retail customers take advantage of multiple physical and digital channels, rather than shopping in-store only or on-line only. As a result, on-line retailers are increasingly supporting omni-channel strategies in their efforts to acquire and retain customers. Nevertheless, the implementation of such strategies is challenging as it requires a host of different prerequisites, such as the need to establish omni-channel processes and workflows, as well as the need to deploy automated product information management software. In 2019, you have to go omni-channel, otherwise your churn rates are likely to increase, as your customers will leave you for competitors that offer effective omni-channel experiences.


Challenge #4: Focusing on the Right Channel

While an omni-channel strategy is essential, it’s also important to prioritize the channels that contribute to your sales the most. There are for example on-line sites that have only marginal contribution to the overall sales of their owners, simply because their products are more suited for sales through physical channels and conventional stores (e.g., bicycles, furniture, cars). Nevertheless, these companies must still invest on their on-line presence as they cannot afford to be without digital channels. Champions are expected to go one step further based on on-line tools that boost sales through the physical channels. For example, they can offer Augmented Reality and Virtual Reality tools that enable their customers to gain insights on how sold items fit in the physical environment. Developing such tools can be challenging, yet they are extremely useful for both merchants and customers.


Challenge #5: Managing Returns

Since the very early days of e-commerce, returns have been one of the major headaches for on-line retailers, as they break the normal commerce workflow and are associated with hidden costs (e.g., credit card commission fees for cancelled transactions). In recent years, intentional return incidents where customers order multiple sizes of an item with a view to test and eventually return them are on the rise. Therefore, retailers need to create and implement effective return policies that are appealing to customers, while at the same time comprising disincentives for intentional returns. This is certainly a management and organizational challenge for modern on-line retailers.


Challenge #6: Trustworthiness and Security

Despite investments in security and data protection measures, on-line customers still report cases where they abandon on-line purchase efforts due to lack of trust to a specific site or merchant. The ever-increasing complexity of cyber infrastructures and processes creates security concerns, which must be dealt with by on-line sellers. Most important, merchants have to find comprehensive ways (e.g., security badges, user friendly privacy policies) to communicate these measures to their customers, as this can lower trust barriers and boost sales. Likewise, on-line sellers need nowadays to invest more in regulatory compliance. The recent introduction of the General Data Protection Regulation (GDPR) for all companies operating within the European Union is a prominent example of such investments. Overall, security concerns are nowadays real, while being the source of several additional costs for on-line retailers.

Also Read: Cross Border Payment gatways to boost your business

Challenge #7: More Expensive, Yet Less Effective Advertising Costs

When it comes to promoting and advertising an e-shop, merchants have to invest in on-line campaigns such as Google ads, social media advertising and Search Engine Optimization (SEO). Unfortunately, these on-line costs are growing as relevant services become more expensive, while their effectiveness becomes lower due to the increased number of on-line merchants that make good use of them. Moreover, the complexity of some of these services grows. For example, SEO needs no longer to address conventional web search, but it rather has to deal with mobile and voice searches as well, as the latter account for a large portion of the total number of searches worldwide. The result: higher investments, higher complexity, yet lower return on investment and an overall challenging advertising landscape for on-line sellers.

 Also Read: E-Commerce Social and mobile Impact

E-Commerce in 2020 is by no means similar to what it used to be in 2000. New challenges, new stakeholders and an entirely different ecosystem ask for on-sellers to be smart, effective, innovative and creative. As soon as they can find novel ways to address modern challenges such as the ones listed above, they will be able to excel in the very competitive e-commerce landscape. This will be to their benefit, but also to the benefit of consumers as well.

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