Top 5 e-commerce challenges and how to overcome them
E-commerce is expected to surge by 20 percent to become a $4 trillion market by 2020, according to Nielsen data. How can small online sellers capitalize on that double-digit growth?
Considering that Amazon is already responsible for 37 percent of online spending globally, as per Salmon research, it’s easy to assume the e-commerce juggernaut will have a big part to play in the predicted increase.
But for smaller businesses, the path to e-commerce success is paved with challenges—not least the struggle to keep pace with Amazon’s logistics and fulfillment capabilities and massive reach.
“If you do a search right now for a product that you want to find in Dublin, even if you say ‘Where is face paint in Dublin,’ the first result is probably going to be Amazon, which is a little bit sad because there are a lot of people out there who really could compete for that business and possibly provide a better consumer experience,” said Mark Cummins, chief technology officer at Pointy, an Irish startup that helps local retailers put their inventory online so they can be discovered via search engines.
He was speaking as part of a panel discussion on e-commerce trends at Dublin Tech Summit, held Apr. 18-19 at the city’s convention center.
Amazon wasn’t the only issue cited during the talk. The panelists pointed to five e-commerce challenges currently presenting problems for online sellers and suggested possible solutions for overcoming those obstacles.
#1. Listing inventory online
“When you hear about new e-commerce technology, you get a lot of interest in the glitzy things but sometimes the simplest things are the most effective,” Mark said.
“If you think of when the internet started, how many years did it take before shops had their opening hours online? Even something as simple as that took a while. Most shops now have their opening hours online but really the vast majority of stores still don’t have their inventory displayed online.”
It’s actually worse than that. A 2017 small business survey conducted by CNBC and SurveyMonkey discovered that 45 percent of small businesses don’t even have a website.
Pointy aims to change that by offering local retailers a way to automatically list all of their products online.
“We have a device that they connect to their barcode scanner or to their receipt printer in the store and whenever they scan something with the barcode scanner, we register that that product is available in that store, on a website that we create and maintain for them,” Mark explained.
The Pointy-powered pages are optimized for search engines so that when consumers search for products, they get results from local stores.
“It solves a practical problem and we’ve seen quite a good uptake from retailers,” Mark said, revealing that Pointy is on track to be used by 1 percent of U.S. retailers by the end of the year.
He added, “If you want to go and do something like on-demand delivery by PostMates or autonomous delivery, the basic starting place is you have to know what’s in the stores, so I think we’re the foundation for that kind of thing.”
#2. Providing bespoke personalization at scale
Panelist Kyle Price, eBay’s director of business development, EMEA, said that it’s not that customers are changing, it’s that the ways in which they’re being addressed have massively shifted, particularly in terms of personalization.
It’s not enough anymore to simply put a customer’s name in the subject line of an email, or use data to serve custom content that’s applicable to their purchase or browsing history.
“Bespoke personalization at scale is the next biggest challenge out there,” Kyle declared, citing free shipping as an example. “If people think they can get an item shipped for free and get it faster, they like that. But a lot of people are willing to make trade-offs and wait two weeks to get the item. And very soon we’re not going to want to select from five different shipping options—we’re going to want the retailer to know what I want and just give me that right option.”
Free shipping recommendations aside, artificial intelligence (AI) is currently helping online businesses to build the shopping experience around each consumer, serving up more relevant suggestions and enabling them to find what they want quicker.
Take HelloAva, a platform for personalized skin care that helps clients find the right products for their specific needs. Customers upload a selfie and fill out a questionnaire about their skin, including what products they’re interested in, any ingredients they might be allergic to and what specific conditions they want to address.
Then the platform’s algorithm offers educated referrals picked by aestheticians from a bank of 2,000 products and based on dermatologically-driven data.
#3. International expansion
A DHL report out last year named cross-border e-commerce one of the fastest growth opportunities in retail, predicting sales would increase at an average rate of 25 percent a year between 2015 and 2020. That’s twice the pace of domestic e-commerce growth.
But Shauna Moran, Shopify’s partnerships manager, EMEA, said it’s important for smaller businesses to do their research before diving into the pool of opportunities presented by cross-border e-commerce.
“When you’re going into a new market, you need to consider currencies, the way people buy, the way people shop, what’s applicable in that market, delivery costs,” she said. “Do the research, figure out what markets do you want to focus on and build it out slowly from there.”
Think about the language your chosen markets speak, too. No matter how great your support team is, your customers won’t be getting the help they need if your agents can’t communicate with them.
xSellco’s e-commerce help desk has a built-in feature that auto-translates incoming queries from a language you don’t speak into one that you do, so you can understand your customer’s message and quickly resolve their issue—without the need for multilingual agents.
#4. Lack of time and focus
“If you’re a corner store, a bicycle store, a convenience store, a pharmacy, e-commerce is a very small channel for you. It might only be a few percent of your sales,” Mark said, adding, “You can’t afford to go out and spend a lot on a solution and even if you can afford the solution, you can’t afford the time to maintain it or even just learn about how it all operates.”
That’s where the likes of Shopify and Pointy come in.
“Shopify is all about democratizing entrepreneurship and, at the same time, delivering emerging and exciting technologies to all different types of businesses,” Shauna noted of the cloud-based e-commerce platform. “We’re experimenting a lot with [AR and VR] and looking to build tools for our partners and our merchants so they can leverage all of these emerging technologies within their own store and within their own business, regardless of the size.”
That’s not the only way Shopify simplifies e-commerce for small businesses. The platform integrated with both Amazon and eBay last year, making it possible for users selling in USD to easily list their items on both sites and expand their reach.
“Democratizing those tools is something that we believe in very strongly,” Mark agreed. “We found that smaller retailers want something that’s very automated, very low friction. Almost a set-and-forget system.”
Almost half of retailers have seen an increase in “intentional returns” (customers who order multiple sizes of a product because returns are free or cheap) over the past year, according to a recent study by Brightpearl.
This has prompted some stores, including J.C. Penney, Victoria’s Secret, Best Buy, and Sephora to limit the number of items customers can return.
But with so much competition in e-commerce, online-only retailers have to be a little more lenient.
“We offer a 100-day return policy because we understand that one of the challenges in e-commerce is that with the vast selection and assortment of products online, people can get overwhelmed,” said Aimee O’Beirne, fashion data librarian at Zalando’s Dublin outpost.
Sizing is an issue, too, she added, because a size 40 in France is a 44 in Italy and a 10 in the UK.
“Again, brand on brand, sizes are different,” Aimee explained. “At Zalando, we understand that our customer wants to be looked after really well and perhaps will have to buy three pairs of jeans to make sure they get the correct fit. We understand that and we facilitate that as best we can.”
Remember, whether you sell on your own website or on multiple marketplaces around the world, your business is being measured against the best experience the customer has had online or offline. And while AI and other technological innovations are undoubtedly shaping the future of e-commerce, the basics will never change.
Customers will always expect fast, personal service.
Invest in creating an experience that your competitors can’t provide and your e-commerce business will reap the rewards.
Start providing faster e-commerce customer service today