Electronic commerce (e-commerce) model helps in the marketing, buying and selling of merchandise or services over the Internet. It encompasses the entire scope of online product and service sales from start to finish. E-commerce tools include computer platforms, applications, solutions, servers and various software formats manufactured by e-commerce service providers and purchased by merchants to increase online sales.
E-commerce facilitates the growth of online business. It is categorized as follows
- Online marketing
- Online advertising
- Online sales
- Product delivery
- Product service
- Online billing
- Online payments
The 10 Most Common Challenges Faced by E-Commerce
- Finding the right products to sell
Shopping cart platforms like Shopify have eliminated many barriers of entry. Anyone can launch an online store within days and start selling all sorts of products.
Amazon is taking over the e-commerce world with their massive online product catalog. Their marketplace and fulfillment services have enabled sellers from all over the world to easily reach paying customers.
- Attracting the perfect customer
Online shoppers don’t shop the same way as they used to back in the day. They use Amazon to search for products (not just Google). They ask for recommendations on Social Media. They use their smartphones to read product reviews while in-store and pay for purchases using all sorts of payment methods.
Lots have changed including the way they consume content and communicate online. They get easily distracted with technology and social media.
- Generating targeted traffic
Digital marketing channels are evolving. Retailers can no longer rely one type of channel to drive traffic to their online store.
They must effectively leverage SEO, PPC, email, social, display ads, retargeting, mobile, shopping engines and affiliates to help drive qualified traffic to their online store. They must be visible where their audience is paying attention.
- Capturing quality leads
Online retailers are spending a significant amount of money driving traffic to their online store. With conversion rates ranging between 1% to 3%, they must put a lot of effort in generating leads in order to get the most out of their marketing efforts.
The money is in the list. Building an email subscribers list is key for long term success. Not only will help you communicate your message, but it will also allow you to prospect better using tools such as Facebook Custom Audiences.
- Nurturing the ideal prospects
Having a large email list is worthless if you’re not actively engaging with subscribers.
A small percentage of your email list will actually convert into paying customers. Nonetheless, retailers must always deliver value with their email marketing efforts.
Online retailers put a lot of focus on communicating product offering as well as promotions, but prospects need more than that. Value and entertainment goes a long way but that requires more work.
- Converting shoppers into paying customers
Driving quality traffic and nurturing leads is key if you want to close the sale. At a certain point, you need to convert those leads in order to pay for your marketing campaigns.
Retailers must constantly optimize their efforts in converting both email leads as well as website visitors into customers. Conversion optimization is a continuous process.
- Retaining customers
Attracting new customers is more expensive than retaining the current ones you already have.
Retailers must implement tactics to help them get the most out of their customer base in increase customer lifetime value.
- Achieving profitable long-term growth
Increasing sales is one way to grow the business but in the end, what matters most is profitability.
Online retailers must always find ways to cut inventory costs, improve marketing efficiency, reduce overhead, reduce shipping costs and control order returns.
- Choosing the right technology & partners
Some online retailers may face growth challenges because their technology is limiting them or they’ve hired the wrong partners/agencies to help them manage their projects.
Retailers wanting to achieve growth must be built on a good technology foundation. They must choose the right shopping cart solution, inventory management software, email software, CRM systems, analytics and so much more.
In addition, hiring the wrong partners or agencies to help you implement projects or oversee marketing campaigns may also limit your growth. Online retailers must choose carefully who to work with.
- Attracting and hiring the right people to make it all happen
Let’s face it, online retailers may have visions and aspirations but one true fact remains, they need the right people to help them carry out their desires.
Attracting the right talent is key in order to achieve desirable online growth. Also, having the right leader plays an even bigger role.
Retailers should be out there getting their name out within the online community by attending e-commerce conferences, speaking at events and networking. Employees want to work for companies that care about them and their future. Having a sense of purpose is key.
BARRIERS TO E-COMMERCE
5 Biggest barriers to e-commerce