How to Overcome E-Commerce Challenges In 2021

There’s no beating around the bush: the online store market is busy going through significant changes. With them come shifting e-commerce challenges that you will need to address. Estimates show that by 2040,  95% of purchases will be online, so now is the time for retailers to face e-commerce challenges & find solutions. With consumers increasingly relying on online shopping, e-commerce is opening doors of opportunity to many entrepreneurs.

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Without creating concrete plans to overcome them now, you run the genuine risk of being overtaken by your competitors this year. To help you avoid that, I want to share a few simple tips for meeting e-commerce challenges in 2021.

This post outlines a few of the most significant e-commerce challenges you will face this year. And I provide simple solutions and suggestions to meet these challenges head-on and get you back on track for business growth.

How You Can Overcome E-Commerce Challenges in 2021

Attracting the Perfect Customer

One of the biggest e-commerce challenges is attracting your target consumer. Especially mobile shoppers have a myriad of options to choose from these days. If they are looking to buy any item, they will research all options before making their decision.

If consumers have several options, how do you make sure they pick you? How do you go about finding that perfect customer that wants your product, at your rate, and to the places you can ship?

Solution: 

Partner with companies that help you target your customers. Online marketing is preferred over traditional marketing because it focuses on your target audience. While this might not happen overnight, with A/B testing, finetuning, and analysis – your products could be showing up to potential customers on different social media platforms.

Customer Experience

Another of the e-commerce challenges you need to overcome is providing the best possible user experience. Customer experience or user experience is key to a successful e-commerce website.

Shoppers expect a similar if not the same experience as one they would get in a brick-and-mortar store. The website’s flow, the segmentation of the website, and the personalization of products based on the shopper’s preferences are imperative.

Solution: 

There are several ways to improve the user experience. The most important would be to have a clean and simple website so that shoppers can navigate through it quickly. The next point would be to have clear CTAs (call to action) so that the shopper knows what to do.

Increased Competition

Another of the biggest e-commerce challenges online retailers face in 2021 is increased competition. In 2020, e-commerce experienced ten years’-worth of growth in just three months. Ad this year, we can expect even more brands to join the online shopping market. The competition will be fierce this year, and brands that don’t take steps now will be left behind.

This increased competition will make it harder for existing online stores to stand out and acquire new customers. Additionally, e-commerce backend expenses such as media, fulfillment, and tech will rise.

Solution:

To stand out from your closest competitors, you want to go back to the KISS principle basics (Keep it Simple, Stupid). Keeping it simple means ensuring your products are easy to find and buy and backed by top-notch customer service.

Brand Recognition

It shouldn’t surprise you to find brand recognition on this list of e-commerce challenges. Shopper retention will be one of the biggest challenges you will face this year as you navigate a saturated market. With so many new stores online, customer options have increased.

Price isn’t going to get your product brand to stand out; your brand identity is. Customers are looking for relatable brands. You will need to invest big in brand equity this year if you want to turn first-time customers into loyal shoppers.

Solution:

To build strong brand recognition, you need first to create a compelling brand. It would be best to have a clear understanding of who your customers are and what they want and regularly engage with them. This effort also means investing in a brand voice and image, create content that gets shared to drive awareness of what your brand stands for, and rewarding loyalty.

Converting Shoppers into Paying Customers

One of the biggest e-commerce challenges is to convert visitors into paying customers. Your e-commerce website might get a lot of traffic and many clicks and impressions. Still, you are not making the sales you anticipated. What can you do to generate more e-commerce sales?

Solution: 

The first and foremost would be to understand why your shoppers aren’t converting. Are you targeting the right audience? Maybe your site is not mobile-first or has other technical issues. Does your customer base trust you? Do you personalize your website for your customers? Always think from a shopper’s perspective and see if you are doing everything possible to make them paying customers.

Customer Loyalty

Another of the significant e-commerce challenges in 2021 is retaining your customers. Here are two facts you need to keep in mind. It can cost up to 5 times more to acquire a new customer than retaining an existing one. The success rate of selling to a current customer is 60-70% compared to a success rate of only 5-20% of selling to a new customer.

The above two facts are a testament to how vital customer retention or loyalty is. Once a customer makes a purchase or utilizes a service from a retailer, they must keep this customer for life. But what is the best way to retain existing consumers?

Solution: 

These are a few different methods to retain customers. The first is to provide excellent customer service. Consumers are always happy to purchase a great product. But they are ecstatic when customer service is equally outstanding.

Another strategy is to keep in touch with the customer via their preferred method. That method can be email, SMS, or blog posts. Find out what works best for your target consumer. Be sure to let them know about new products, sales promotions, and special coupon codes for being such loyal customers.

Meeting Consumers’ Expectations

As more people shop online for a wider variety of products in the coming year, it’s going to become even more critical to manage expectations. Managing user expectations is vital for increased retention and decreased return rates.

If you’re not upfront about price, product details, and expected delivery dates — and following through by meeting those expectations — you run the risk of losing customers to your competitors. And when there are so many new competitors entering the fray, it’s too big of a threat.

Solution:

Online shoppers expect full product information, including styles, colors, and sizes. This information will help reduce the risk of returns or negative feedback. You want to make the shopping experience as smooth as possible. You must be upfront about pricing and shipping costs, build trust, avoid common e-commerce design mistakes, and go above and beyond in terms of customer service.

Cyber & Data Security

Providing a secure online shopping experience is another challenge for many online store owners. When it comes to e-commerce, one of the biggest challenges faced is security breaches. There is a lot of information/data involved while dealing with e-commerce, and a technical issue with data can cause severe damage to the retailer’s daily operations and brand image.

Solution: 

Be vigilant and always back up your data. Also, you should install security plugins on your website to prevent it from getting hacked. There are several plugins out there. Pick one that works best for your e-commerce website. That way, you can quickly restore your e-commerce site if it does get penetrated.

Online Identity Verification

When a shopper visits an e-commerce site, how would the retailer know if they are who they say they are? Is the shopper entering accurate information? Is the shopper genuinely interested in your e-commerce products?

Correctly identifying your users is one of the significant e-commerce challenges online retailers need to overcome in 2021. If you do not have accurate details or information, how do you proceed? The simplest solution is to invest in online identity verification.

Solution: 

There are different ways to incorporate online identity verification. Some examples include biometrics, AI, single sign-on, one-time password, two-factor authentication, and so on.

Competition & Competitor Analysis

Here is a fact most online retailers overlook. The fewer choices you offer customers, the more likely they are to purchase something. Many consumers are overwhelmed by all the options that are out there. A simple search for something like headphones will give you thousands of options. How are you supposed to pick the best one?

From a retailer’s standpoint, how do you stand out from the crowd? How do you attract online consumers to your website instead of buying a similar product from your competitors?

Solution: 

Always do a thorough analysis of your competitors. Find out what products they are selling, how they generate leads, and how they keep in touch with their customers. The next step would be to make sure you stand out from the digital noise. From your branding to your e-commerce functionality, everything must be first-class and fit together. And finally, offer services or products that are unique and relevant to your customer base.

Price & Shipping

Another of the critical e-commerce challenges many online retailers face is shipping costs. We have all heard of customers that prefer to purchase products from places that have free shipping. E-commerce giants like Amazon provide such attractive shipping deals that customers seldom want to look at other sites. But how can a small online retailer like you reduce shipping costs?

Solution: 

While all e-commerce sites cannot eliminate shipping costs, always look to find options that work for your customer base. Would a subscription reduce the cost of shipping? Would a specific time of the month give them lower shipping costs? Or is there a carrier that is reliable but offers a cheaper rate? Be sure to do your research and find the best possible solution for your shoppers.

Product Return & Refund Policies

According to ReadyCloud, in 2018, 66% of online consumers checked a retailer’s return policy before purchasing. When an e-commerce site says “no returns or refunds,” it makes a shopper nervous and less likely to trust the retailer. When shopping online, customers want the flexibility of making a mistake that doesn’t cost them.

Solution:

Customer satisfaction is the most crucial factor for any retailer. Therefore, having a flexible return and refund policy not only helps with customer satisfaction. A simple return and refund policy also helps convince first-time or leery customers to complete their purchase.

Increased Acquisition Costs

This year, it will be even more challenging for e-commerce brands to attract new shoppers through PPC campaigns and media platforms. With the rise in competition, big brands expect to increase their advertising budgets throughout the year, forcing more online retailers to join the party.

Current estimations are talking about as much as a 20%+ increase in acquisition cost. This increase in expenses presents a significant challenge for many smaller online retailers.

There is an influx of businesses entering the online space, all injecting money into digital ads. There is no doubt you will need to deal with increased budgets to ensure you can stay competitive. It’s also now more critical than ever to manage these ads in real-time.

Solution:

You will need to implement a system that optimizes your campaigns in real-time. Include campaign types, targeting methods, and even customizing incentives to get you the returns you require. You need to invest in a multi-channel advertising strategy powered by AI technology.

Meeting E-Commerce Challenges

Nothing has propelled e-commerce like the conditions of 2020. While there have been many exciting and positive changes, there are still online businesses that struggle with the challenges that e-commerce brings. The solutions mentioned above can help any business overcome e-commerce challenges and move closer to their ideal customers and targeted sales.

2021 will be an exciting yet complicated year for e-commerce. While there is no doubt that sales online will grow, coming out on top will require a lot of work by manufacturers and retailers to bring about an optimal shopping experience.

Be alert to change and improvisation and open to new tools and methods. By meeting these e-commerce challenges, you can maximize consumer satisfaction and conversions. We are here to help.

Are E-Commerce Challenges Impacting Your Online Business?

Of course, we would be happy to help you meet any of these e-commerce challenges. We are experts at carefully crafting custom mobile-first websites and online stores to meet (almost) any budget.

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Here at PixoLabo, we offer a full range of mobile-first business website consulting and design services, including mobile-first web design and development, e-commerce solutions, search engine optimization, brand strategy and design, and business website hosting and maintenance.

If you are not sure how to meet these e-commerce challenges, don’t worry! Reach out and contact us. Our expert team will listen to you, answer your questions, and determine the best way for you to attract, convert, and retain loyal online consumers. That is one of our specialties, after all!

How Are You Meeting E-Commerce Challenges?

We would love to hear your feedback regarding the e-commerce challenges you are facing in 2021. Are you selling online? Have you encountered any of the challenges listed above? If so, how are you dealing with them? Do you have any other tips or e-commerce challenges you would like to share?

Please leave your comments below so our audience can benefit and grab our feed, so you don’t miss our next post! And help your friends and associates to meet the challenges of running their own e-commerce business by sharing this post with them.

Thank you! We appreciate your help to end bad business websites, one pixel at a time!

By Gregor Saita
Co-Founder / CXO
@gregorsaita