AI in Retail

10 Biggest Ecommerce Challenges In 20229 min read

December 24, 2021 7 min read

10 Biggest Ecommerce Challenges In 20229 min read

Reading Time: 7 minutes

Ecommerce Challenges – Remember when the Titanic was sinking and the band continued to play? Well, retailers in 2021 are the band!

Ever since the World Health Organization declared covid-19 a global pandemic, there seems to have been a boom in everything ranging from the extra pounds in many people to the number of food channels on YouTube.

However, monthly retail sales volume is one among many things that have constantly been declining. In fact, in the United Kingdom, the Office for National Statistics has reported a 5.1% drop in retail sales due to covid-19 – the highest ever drop since its inception 30 years ago.

With forty-three retailers (including industry leaders such as Art Van Furniture and Lord & Taylor) filing for bankruptcy, 2021 is on track to have the highest number of retail bankruptcies in a decade, according to a report by S&P Global Market Intelligence.

However, if you are an e-commerce retailer, the pandemic can be a double-edged sword for you!

E-Commerce: Silver lining to the 2021 retail sector

While most retail sectors have taken a hit, one of the most intriguing changes taken place in 2021 is the shift to digital. With more people at home, the number of Google searches has multiplied and people have started using e-commerce to buy products they previously would have bought in physical retail stores. 

According to Sanjay Gupta, Country Head and VP, Google India, the silver lining to the whole situation is that businesses have squeezed four years of change into four months since the lockdown began, from a business transformation and skills perspective.

In Microsoft’s quarterly earnings report to Wall Street, Satya Nadella’s statement on digital transformation further fuels the argument that the e-commerce sector will thrive in the ‘new normal’.

“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning to sales and customer service, to critical cloud infrastructure and security—we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”

– Satya Nadella, CEO, Microsoft

By 2040, it is estimated that 95% of purchases will be made online, so now is the right time for retailers to face ecommerce challenges & find solutions for them. With consumers increasingly relying on online shopping, e-commerce is opening doors of opportunity to many entrepreneurs.

Furthermore, those ecommerce sale opportunities are growing at a rapid rate. However, as we all know, there’s no rose without a thorn!

10 Biggest Ecommerce Challenges in 2022 & Solutions to solve them

ecommerce challenges 2022
10 Ecommerce Challenges in 2022

1. Cyber & Data Security

When it comes to eCommerce, one of the biggest challenges faced is security breaches. There is a lot of information/data that is involved while dealing with eCommerce and a technical issue with data can cause severe damage to the retailer’s daily operations as well as brand image. 

Solution: Be vigilant and always back up your data. Post that, you can install security plugins onto your website to prevent it from getting hacked. There are several plugins out there, pick one that works best for your eCommerce website.

2. Online Identity Verification

When a shopper visits an eCommerce site, how would the retailer know if the person is who they say they are? Is the shopper entering accurate information? Is the shopper genuinely interested in the eCommerce products?

If you do not have the accurate details or information, how do you proceed? Well, it does become tricky. The solution would be 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.

3. Attracting the Perfect Customer

Shoppers have a myriad of options to choose from these days. If they are looking to buy a handbag, they do some thorough research before finalizing on one. If shoppers 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. Digital marketing is preferred over traditional marketing because they can target your ideal customer. 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.

4. Customer Experience

Customer experience or user experience is key to a successful eCommerce website. Shoppers expect a similar if not same experience as one they would get in a brick and mortar store. The flow of the website, the segmentation of the website and the retail 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 easily. The next point would be to have clear CTAs (call to action) so that the shopper knows exactly what to do. Here is a post that shows you 10 ways to improve user experience.

5. Customer Loyalty

Here are two facts that show the importance of customer loyalty:(a) It can cost up to 5 times more to acquire a new customer than retaining an existing one and (b) the success rate of selling to a current customer is 60-70% compared to only 5-20% success rate of selling to a new customer.

The above two facts are testament to how important customer retention or loyalty is. Once a customer makes a purchase or utilizes a service from a retailer, they have to make sure that they keep this customer for life. But how is this possible?

Solution: These are a few different methods that can be used to retain customers. The first would be to have excellent customer service – a customer is happy to have purchased a great product, but they are ecstatic when the customer service is on point. The next step is to keep in touch with the customer via a method that they like – be it an email, SMS or blog posts – be sure to find out what works best for your customer. The last point would be to let them know about new products, sales promotions and special coupon codes for being such loyal customers.

6. Converting Shoppers into Paying Customers

One of the biggest ecommerce challenges is to convert visitors into paying customers. An eCommerce website might have a lot of traffic, a lot of clicks and impressions but they aren’t making the sales they anticipated. What can they do to get more sales?

Solution: The first and foremost would be to understand why your shoppers aren’t converting – are you targeting the right audience? Is your mobile website working seamlessly? Do your online platforms face technical challenges all the time? 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. 

7. Competition & Competitor Analysis

Have you heard of a Jam Experiment? Well it has quite a controversial conclusion, which is – the less you offer customers the more likely they are to actually purchase something. A lot of people these days are fatigued by all the options that are out there. A simple search for something like headphones will give you thousands of options – how does one make a choice? 

From a retailer’s standpoint, how do they stand out from the crowd? How do they bring shoppers to their website, instead of buying a similar product from their competitors?

Solution: Always do a thorough analysis of your competitors. Find out what products they are selling, how they are generating leads and how they keep in touch with their customers. The next step would be to make sure you stand out – be it the colors you use, the topnotch functionality of your website or amazing user experience. And finally, offer services or products that are unique and relevant to your customer base.

8. Price & Shipping

We have all heard of customers that prefer to purchase products from places that have free shipping. eCommerce giants like Amazon provide such attractive shipping deals that customers seldom want to look at other places. How does one bring down costs for shipping? 

Solution: While all eCommerce sites cannot completely get rid of shipping costs, always look to find options that work for your customer base. Would a subscription reduce the cost of shipping? Would a certain 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.

9. Product Return & Refund Policies

According to ComScore, more than 60% of online shoppers say that they look at a retailer’s return policy before making a purchase. When an eCommerce 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 important factor for any retailer. Therefore having a flexible return and refund policy not only helps with customer satisfaction with it also helps with customers making purchases without being nervous. 

10. Choosing the Right Technology/Partners To Fix Your eCommerce Challenges

Choosing the right technology or partner will make or break your business. A retailer’s growth might be stunted because their technology is limiting them or because they have hired the wrong agency to help them manage their projects. 

There are a lot of aspects that need to be in place for a successful retail business, but a good technology foundation is crucial. 

Solution: Partner with, a unified Visual A.I. platform that is redesigning the future of retail commerce to fix all your eCommerce challenges. Using image recognition and data science, Vue helps retailers generate product, and customer intelligence, and combine these with market insights, to power growth.

Nothing has propelled eCommerce like the conditions of 2021. While there have been a lot of exciting and positive changes, there are still online businesses that struggle with the challenges that eCommerce brings. The above mentioned solutions are fixes that can help any eCommerce business move closer to their ideal customers and targeted sales. 

Related Article – Shopping cart Abandonment in Ecommerce – The Ultimate Guide

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