Though the global ecommerce industry is growing, small businesses and popular brands alike face obstacles to success. From security breaches and shipping delays to identifying customers and building marketing strategies, no ecommerce business is immune.
Understanding these hurdles can help online business owners plan ahead. Learn about common ecommerce challenges and solutions for keep your business on track.
Top ecommerce challenges
- Choosing the right products
- Identifying your target audiences
- Positioning your products
- Developing effective sales and marketing messages
- Allocating digital marketing budgets
- Building a paid ad strategy
- Establishing social proof
- Designing a user-friendly online store
- Increasing conversions
- Increasing customer retention
- Providing good customer service
- Managing logistics
- Maintaining ecommerce site security
Here are some common ecommerce challenges and how to manage each:
1. Choosing the right products
In the crowded ecommerce space, choosing the right products is essential for standing out. Nik Sharma, CEO of brand strategy agency Sharma Brands, suggests considering market demand and marketing strategy at the outset. “The first thing that people don’t necessarily think about is, How are we getting eyeballs on the product?” Nik says. “The second thing is, What’s the use case of the product? How does it compare to other products that already exist in the same market or as a competitor?”
You can conduct market research to familiarize yourself with the needs and preferences of consumers in your target market and stay up to date with market trends and help identify products that meet customer demand.
2. Identifying your target audience
Online businesses can cast a wide net, potentially targeting customers around the world. Although this is a good thing, it can sometimes make it difficult to identify your target audience—and knowing your customers is key to building out your marketing and sales strategies.
Your market research will help you identify demographic factors common to individuals in the market for your product. From there, you can use buyer personas—fictional representations of a business’s ideal customers—to help you build out your marketing messages and customer acquisition strategy.
3. Positioning your product
A value proposition is a concise statement that communicates the value of your product and how it responds to your target audience’s needs. Nik uses a cooling moisturizer as an example. “I like to first validate what the hooks and the ideas are that’ll lead to the sale of the product,” he says. “The audience of people who would want to buy a cooling cream is probably very small, but then the audience of people who want to buy a solution to stop itchy feet is probably much bigger.”
The value proposition is an essential tool that can help convey this kind of broader message.
4. Developing effective sales and marketing messages
The next challenge is developing marketing messages that clearly communicate your product’s value and encourage online shoppers to convert to paying customers. Nik advises ecommerce businesses to create content that answers four questions:
- Why does the product exist?
- What are its benefits?
- If a consumer orders it today, when will it arrive?
- How does it compare with the other products that claim they do the same thing?
Nik says that effective messaging is clear, concise, and catchy. “It kind of reminds me of songwriting,” he says. “When you’re writing a song, you’re looking for that hook. When it comes to marketing, you want to explain things in a simple way and really have something that resonates.”
This kind of messaging is both memorable and persuasive. It’s also easy for consumers from a range of demographics to understand.
“One litmus test that I love to use is that if you have a product page, your grandma should be able to go there and fully understand what the product does,” Nik adds.
5. Allocating digital marketing budgets
New ecommerce businesses sometimes struggle to develop digital marketing strategies that efficiently allocate budgets across tactics. Overspending on one tactic and underspending on another can lead to lost sales. One common challenge is choosing between paid strategies (like placing ads) and organic strategies, where you don’t directly pay for ads (like social media marketing and some search engine optimization efforts).
Nik recommends starting with organic tactics when you’re not sure where to spend a limited marketing budget. “You have to build brand awareness and legitimacy with organic. I think that’s the easiest, cheapest, fastest way to do it,” he says. “A lot of times at first, it’s social media. You’re creating content on short-form social media platforms that give you reach without any pay, like TikTok, Instagram Reels, YouTube Shorts, etc. After that, it goes to the paid platforms.”
6. Building a paid ad strategy
Starting with organic content can help you when it’s time to start running paid advertisements. Armed with performance data from social media posts and web traffic, you’ll have a better idea of what resonates with your target audience. Nik recommends running social media ads that are a variation on themes in your most popular organic content.
“Paid advertising is just taking content and putting it in front of more people,” he says. “If you start with organic and validate what works, you’ve already got proof that there’s a good chance that it will work when it comes to paid.”
7. Establishing social proof
Establishing social proof, or the human tendency to rely on others’ opinions to make decisions, is another common challenge. “Social proof is a big one that a lot of people tend to forget,” Nik says. “If I’m launching this cooling cream and somebody Googles ‘Nik’s cooling cream’ and nothing exists, I’m already fighting an uphill battle.”
Nik recommends partnering with social influencers to establish social proof. “You don’t have to go pay a PR agency $25,000 a month to get you articles,” he says. “There are bloggers and social influencers that you can send products, and they’ll write reviews.”
To find potential partners, start with a simple search. “For the cooling cream, I would basically Google ‘best cooling creams,’” Nik says. “I’d email anybody who’s written about that and say, ‘I just launched this product, and we’re trying to break into the market. I would love to send you the product and see if you like it enough for a review.’”
8. Designing a user-friendly online store
To make ecommerce sales, you need an online store that converts website visitors into customers.
One of the most important aspects of your store is usability. To help you evaluate it, Nik suggests putting yourself in the shoes of a visitor to your ecommerce store. They need to be able to understand the store and checkout. Selecting an ecommerce platform with an intuitive interface and streamlined checkout process can help you design a user-friendly online store.
9. Increasing conversions
Make sure that users with varying degrees of experience can navigate your site and purchase products. This encourages customer progress through the sales funnel, a simple visualization of a consumer’s shopping journey, with web traffic and awareness at the top and repeat purchases at the bottom.
Nik also suggests using landing pages to boost conversions, observing that they allow you to develop content that meets specific customer expectations after the jump from a paid ad or organic link. “With landing pages, the second you click the ad you can go to a landing page that has that same creative,” Nik says. For the cooling cream example, he recommends a landing page that “still talks about itchy feet, and then everything on the page sort of ladders back up to that North Star point of solving for itchy feet.”
Designing landing pages that echo the sales and marketing messages can reduce bounce rates by providing a consistent narrative about product value.
10. Increasing customer retention
Increasing customer retention is another common challenge for online retailers. Here are three strategies that can help:
- Create a customer loyalty program. Customer loyalty programs recognize and reward your most loyal customers by providing incentives for activities like making purchases, referring other customers to your brand, or posting content about your company on social media platforms.
- Use email marketing. Email marketing can help you stay in touch with customers and boost retention rates. You can start an email newsletter, offer discounts or other promotions, and notify your customers of new product launches or future events.
- Solicit customer feedback. This can make your customers feel heard and valued, which improves customer retention and loyalty. You can also use feedback to improve the customer experience. Automate post-purchase survey emails or conduct a customer survey to gather customer input.
11. Providing good customer service
Providing quality customer service is essential to maintaining customer satisfaction. It can also be challenging for ecommerce companies, which often serve diverse customer bases and embrace multi- or omnichannel marketing strategies. Omnichannel customer service technology, or tools that help you help customers no matter where they are, can help you meet consumer expectations while selling on multiple channels. You can use customer service training to help your team understand techniques for handling difficult calls and minimizing customer dissatisfaction.
12. Managing logistics
Many ecommerce businesses face logistics and fulfillment challenges such as navigating supply chain issues and managing shipping costs. The fact that many customers expect fast shipping and generous return and refund policies can further complicate logistics. You can use supply chain management software to optimize supply chains and fulfillment apps to help you manage shipping and returns and reduce fulfillment costs. To maximize efficiency, look for tools that integrate with your existing ecommerce platform.
13. Maintaining ecommerce site security
Online store owners have different security needs than brick-and-mortar store owners. Although you don’t need to worry about shoplifting, you’re responsible for ensuring customer data privacy and protecting your site from cyberattacks.
Choose an ecommerce website provider that offers a free SSL (Secure Sockets Layer) certificate and built-in features to increase site security. You can also install security plug-ins, display trust badges to increase prospective customer confidence and deter hacking, and use online identity verification tools to prevent fraud.
Ecommerce challenges FAQ
Is the ecommerce boom over?
No. Online shopping retail sales continue to increase, and the market is forecast to reach 2.5 billion users by 2028.
What are the top benefits of ecommerce?
Here are three major benefits of an ecommerce business model:
- Large potential customer base
- Reduced start-up costs relative to brick-and-mortar retail
- Access to advanced consumer behavior analytics
How do you analyze the success of your ecommerce business?
Business owners measure ecommerce company success using key performance indicators (KPIs) such as total revenue, total profit, revenue growth, and customer acquisition rate.