Top E-Commerce Challenges Facing SMBs

The e-commerce market is growing retailers are struggling with the latest technology and facing challenges.

  • Innovative technologies, such as Augmented Reality as well as IoT (Internet of Things) commerce, have brought new challenges and issues for online-based businesses.
  • Conversion margins on eCommerce are low thus directing targeted traffic to your website is vital.
  • The explosion of e-commerce implies that competition is intense The process of processing orders can be overwhelming and the return policy of your business is vital.
  • This post is written for entrepreneurs in the e-commerce industry who are facing and solving common e-commerce problems.
  • Top E-Commerce Challenges Facing SMBs The industry of e-commerce has seen exponential growth in recent years, with the total sales of e-commerce projected to be $1.065 trillion in 2023. As an online business proprietor, you face different challenges than brick-and-mortar shop owners. Businesses that sell online have their own rules and regulations that must be followed and cybersecurity is the top priority to ensure that the data that is stored online is secure.

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We talked with industry experts about the difficulties small-scale businesses in e-commerce must deal with and ways to get over these obstacles. Here are the top 12 frequent challenges that owners of businesses in the e-commerce industry confront today.

What are the most pressing online-commerce-related challenges facing SMBs?

Every aspect of online commerce businesses have challenges and obstacles. Here’s a look into the top challenges and suggestions on how you can do to address them.

1. Cybersecurity

Victor Congionti, chief information officer and co-founder of Proven Data, knows that small-sized e-commerce websites need right cybersecurity practices and tools implemented.

“Small businesses that focus their attention in the e-commerce space need policies and procedures to create a solid cybersecurity framework for the organization,” Congionti stated. “In the case of a cyberattack, a small business cannot afford to have downtime in operations and sales, because every transaction is a marginal financial success that the business depends on.”

Since small businesses depend on this income, Congionti stated that entrepreneurs require a cybersecurity plan to ensure data is safe and secure , while ensuring that workers feel more empowered and able to put in place policies and technology to fight cyberattacks. Solutions like more stringent security controls for access and software for data security can help strengthen security against weaknesses and increase a small-sized business’s security risks.

Companies must establish an incident response plan that outlines what they should do in the event of a cyberattack added Congionti.

“In the case of a ransomware attack, the organization might not be able to access files and data that is necessary [for] providing service to customers, such as inventory reports,” he added. “Having a response plan can help the business reduce downtime in operations and continue providing service to clients through other means, such as phone sales.”

2. Competition

The competition can take many forms for small companies, but especially when it comes to e-commerce. You must keep up with the latest pricing trends products, goods and services that are all trying to compete for your customers..

“As a small business, you can overcome price competition by having a very clear company value proposition that consumers can’t get elsewhere,” said Calloway Cook who is the founder of Illuminate Labs.

The market for e-commerce has grown so saturated that standing out from the other online businesses can be difficult because of no responsibility of your own.

“Distinguishing yourself from your competitors is crucial to standing out and attracting new customers for your business,” said Harsha Reddy cofounder and CEO of Small Biz Genius. “This can be accomplished by making sure your website looks professional and is optimized correctly to suit today’s Google algorithm. Also, by providing a unique product or service, you can focus on a smaller demographic, making it easier for you to increase your domain authority.”

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3. Order fulfillment

It’s not necessary for everything to fall on the shoulders of small-business owners. There’s a chance that you’ll be overwhelmed by many more orders than you’re ready to handle by yourself. In this scenario outsourcing order fulfillment and shipping via e-commerce will reduce the burden and enhance the customer experience.

“Order fulfillment should be outsourced to a third-party fulfillment company whenever possible for increased efficiency,” Cook declared.

4. Customer experience

If you are primarily an e-commerce company or a company that is involved in some selling on the internet it is possible that you will have a difficult time trying to provide your customers with the same level of service you would offer in brick-and-mortar stores.

“One of the most overlooked areas of the customer experience in moving to e-commerce is pricing and customer segmentation,” said George Dunham, CEO of epaCUBE. “Customer experience is especially important when launching an e-commerce initiative, because customers expect to be treated as well or better online as they are face to face.”

Dunham stated that businesses are struggling to meet the demands of modern customers since it requires precise management of pricing, analytics , and segmentation of customers. Experiences that are successful for customers shopping online need the same, if perhaps greater transparency in the products, pricing, loyalty programs and so on, as is needed in a face-to-face buying.

“In a world where everything is happening online, your customers expect more, and they also know more about your products, prices and competition,” Dunham stated. “They expect to be treated the same way online as offline, so if they can get a certain price in person but can’t get that price online, they get frustrated and purchase somewhere else.”

5. Quality traffic on websites and visitors conversion

The process of designing, creating and operating an online store is a challenge however, generating high-quality converts is more difficult according Lisa Chu, owner of Black N Bianco. Lisa Chu, owner of Black N Bianco.

“To turn your traffic into converting customers, you must have a website that is modern, clean, user-friendly, trustworthy and virus-free,” Chu stated. “Every industry is different, so understanding your audience is crucial to designing a website that resonates with your audience.”

The creation of an successful business site is only the first step however. Optimizing the content of your site via search engine optimization is your next and perhaps the most important step.

Phillip McCluskey, commercial director of One Erth, said that the average conversion rate worldwide is below 3%. This makes the process of bringing targeted traffic to your website an issue.

“Extensive short-tail keyword research should be conducted to ensure you are optimizing your pages for relevant search terms,” he added. “It is likely that the competition for these terms when [they are] just starting out will not realize immediate web traffic; therefore, long-tail keyword research should be conducted to understand the relevant ‘what,’ ‘how,’ ‘who’ and ‘where’ within your niche.”

Shirley Tan, developer partnership manager at Yahoo Small Business, said that many companies used to follow their business on “if I build my online store, customers will somehow discover it” method. “Today, that is no longer the case. When there were fewer e-commerce stores, they may have been able to rely on a stumble-upon effect, but now the internet is too crowded and noisy. Therefore, engaging the customer and getting their attention has to be more meaningful and impactful.”

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To be able to stand out from the noise of the online market, Tan said e-commerce SMBs should know the people they’re trying to attract in order to build an client base that will become their primary source of revenue and loyal customers.

6. Visibility

What can you do to bring in the right traffic to your website and convert those visitors into buyers who can’t access your website? This is a serious problem for businesses that sell online and can make or break a company.

“If the company doesn’t show up on the first page of Google’s search results for relevant keywords, then it’s unlikely that prospective customers will find them,” said Michael Anderson, marketing and SEO expert for GeoJango Maps. “The best way to overcome this challenge is to invest in SEO. E-commerce companies should conduct keyword research, implement on-page SEO best practices, and work on building high-authority links to their website.”

Anderson stated that if all of the above are done properly it will lead to greater search visibility and improved the lead generation.

“For clothing businesses, influencer marketing works very well, but if your e-commerce business is based around a product that solves a problem, getting your website to rank on Google for keywords related to that problem through SEO efforts might be your best bet,” said Nicholas Rubright, digital marketing specialist for e-commerce market analysis company Zik Analytics. “Understanding your audience is key to figuring out which marketing channel will generate traffic that actually converts into sales.”

7. Policies on refunds and returns

A well-thought-out return and refund policy can be the key to success or failure. It sounds like a lot however it’s the truth.

“If you want your brand to stand tall, then customer satisfaction should be the first priority, and whatever you’re selling should be the same as what’s advertised,” said Syed Ali Hasan, digital marketing manager at Film Jackets.

In a perfect world it’s true that there won’t have a problem regarding the product you’re selling, however that’s not always the scenario. Sometimes, the buyer has buyers’ remorse, or the purchase was not as they thought they thought it would be.

“Be transparent and create a smooth, fast and easy return policy,” Hasan stated. “Make it easy to understand and not too strict, so the customer won’t have to go through hassles [to return an item].”

Rubright has stated that should you not have a clear terms and conditions for refunds and returns, buyers are less likely that you’re selling products worth the price. “When a site says ‘no returns or refunds,’ it makes the customer much more likely to think it’s a risky purchase or, worse, a scam, since online businesses can be less known.”

8. The right market to choose from

“The first step of any business is to find product-market fit, and e-commerce is no different,” Rubright stated. “Product-market fit is the degree to which a product satisfies market demand. The easiest way to find that fit quickly is to build a product that solves a problem you have.”

But, finding the best target market to sell your products isn’t always the most simple job. Rubright provided some tips about how to simplify it.

“If you haven’t figured out your ideal customer yet, I recommend making some assumptions as to what your target market is and running Facebook ads to this audience. When you finally do make a sale, try and understand everything you can about who bought your product, and find more of those people by any means necessary. Once you have product-market fit figured out, then you can figure out the best way to reach your ideal customers.”

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9. Growing sales and making sales

When you’ve decided on your product, get your website created and put your small-business marketing plan in place, the next thing to do is to generate sales. In the creation of an effective sales strategy in order to sell your goods and services appears to be a straightforward task but it’s not always as simple.

“To increase sales, e-commerce SMBs need to have the right product at the right price and ensure they are top of mind when the customer is ready to make a purchase,” Tan explained. “This traffic can be hard to get; to drive sales, it’s important a brand endears themselves to their customers.”

In addition to customers remembering you whenever they require something, and being confident about your products Your website is a major factor in the number of sales you get.

Tan suggested that you ask yourself these questions to assess the efficiency of your site’s website:

  • Does the layout of the website make it user-friendly?
  • Are the checkout procedures easy and quick?
  • Do you have coupons which can be used to customers who spend an amount in order to receive discounts?

“Website functionalities like these can greatly increase conversions and make the customer experience more enjoyable,” Tan stated.

10. Borderless e-commerce

Due to the rise of internet-based shopping websites Shopping has now become completely international. Customers can purchase products from businesses outside of their home countries. Therefore, online companies must be able to accommodate customers from any background.

To support a broad customer base involves providing information in multiple languages. According to the CSA Research 76% of customers who shop online prefer buying items with information in their native language. 92% of them would prefer shopping using their currency of choice and 33% would quit the cart if the price is solely expressed in U.S. dollars.

To increase your chances of a successful eCommerce business, make sure you use thoughtfulness and consideration when you are integrating different languages and cultural practices.

11. Augmented reality

The AR (AR) marketplace is predicted to grow to $198 billion in 2025. AR lets e-commerce companies let customers see what their item would look like within their environment. For example, if a person is looking to buy a sofa to put in their living room, AR can help them imagine the sofa in the room they are buying it in.

The visualization tool is often used to confirm the decision to make purchases, since they have greater confidence that it will look great at home.

If you think that the AR model is compatible with your product, maybe you should integrate this model in your online store.

12. IoT commerce

Internet of Things (IoT) commerce has been an increasingly popular method for consumers to buy digital items using IoT devices like cars, smart speakers and appliances, among other devices. In the present API economy businesses are able to speed up the process of delivering their product via new avenues. To adapt to this new method of shopping, online retailers should focus on their PIM so that they can respond with API requests and offer their products in unusual channels.

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