7 Top Challenges for Online Retailers

The world of online retail is booming: 96% of Americans shop online. Of course, retailers want to take advantage of this huge demographic, but that also means the world of online retail is more competitive than ever – and with that competition comes a slew of challenges. New retailers are seemingly popping up every minute, and consumers have their pick when it comes to buying new products online. In this competitive landscape, online retailers need to find ways to work past these challenges to stay relevant and appealing to customers. The following are the top challenges for online retailers that every business needs to be aware of.

Customers Have High Expectations

From the minute they go to your website to the moment they unbox their delivery at home, customers have high expectations. They want a seamless ordering and shipping experience. If an online retailer can’t meet those expectations, they are the ones who will lose out. Since the market is so saturated, a customer will quickly find what they are looking for with another competitor. One of the biggest challenges for online retailers is that they need to be on top of their game in all facets of business in order to stay competitive and keep customers happy. This means keeping items in-stock, providing fast (and ideally free or cheap) shipping, creating an easy-to-navigate website and checkout process, minimizing shipping errors, and having strong and responsive customer service.

Cultivating Multiple Channels of Communication

Customers need to be able to communicate with businesses as easily as possible. Of course, this is true of both online and traditional brick-and-mortar stores. However, it is particularly true for businesses with solely an online presence, since customers can’t physically talk to a sales associate. If customers (or potential customers) aren’t able to communicate with a representative from an online retailer, they’ll just move on to a competitor. This means online retailers have to create and maintain multiple channels of communication so that customers can reach out in whatever form is easiest for them – which can be challenging for online retailers to keep up. These channels can include emails, phone calls, live chats on the website, and messages and comments through different social media platforms. The team needs to have the right technology to manage customer inquiries coming in from different sources. Additionally, online retailers need adequate manpower to handle these communication attempts in a timely manner to maintain customer trust and loyalty.

Online Retailers Need to Pay Attention to International Customers

When looking at the top challenges for online versus traditional retailers, one of the biggest factors that stands out is the access to an international customer base. A 2017 report predicted that cross-border e-commerce sales would increase at approximately 25% per year between 2015 to 2020. Of course, for online businesses, the ability to reach an international customer base can be a benefit for sales, but it comes with a lot of unique challenges. Businesses dealing with international customers have to do their due-diligence to ensure they are fully equipped to do business with these segments of people in these various countries. This means knowing the currencies and delivery costs and procedures, having customer service reps that speak the right languages, and knowing any procedures or laws that need to be followed in different countries. These efforts can result in greater sales, but they require a lot of preparation from online retail businesses.

Maintaining Loyal Customer Relationships

One of the biggest challenges for online retailers is earning and maintaining the loyalty of customers. With so many options available to them, it is easy for customers to abandon their favorite online retailer the moment they find another that offers something more – whether that be better customer service, better selection of product, better shipping options, or something else. On top of that, since online retailers can’t cultivate a face to face relationship with customers, they will feel less of a personal connection to a business, making it easier for them to move on. In order to build customer loyalty, online retailers need to find ways to engage customers and create trust. This could mean creating a loyalty program, offering birthday rewards, publishing an “About Us” page with pictures of staff (to put faces to the business), and maintaining extremely good communication and customer service practices.

An Increase in Online Shopping and Returns

Dealing with returns from online shoppers has been one of the top challenges for online retailers. Online retailers who offer free or cheap returns are often able to attract customers, but this often means dealing with an increase in returns. This can be particularly true for clothing online retailers. Since customers aren’t trying items on in-store, they’ll intentionally order the same product in multiple sizes or different colors so that they can ensure they’ll get the perfect match for them. That being said, online retailers selling non-clothing products can also be majorly impacted by online returns. Online, customers have such a wide range of product options to choose from. They may decide to order more than they intend on keeping, and decide later what they actually want to hold onto. The big challenge for online retailers is having somewhat lenient return policies – since they are still competing against other retailers – while also putting practices in play so that they aren’t completely overwhelmed by returns. From a customer service angle, it is important to deal with returns swiftly, getting refunds to customers as soon as possible. It is also vital that companies are clear about their return policies in order to maintain customer trust.

Customers Still Desire In-Store Shopping Experiences

Sure, online shopping has boomed over the past few years, as it makes it easy for customers to get exactly what they want without having to leave their home. However, that doesn’t mean customers have completely ditched the brick-and-mortar shopping experience. Physical stores still provide an irreplaceable experience that customers can’t get online. They give customers the opportunity to test out or try on products, as well as interact with sales associates face to face. While there is only so much that retailers who solely sell online can do, they must find ways to make the customer experience remarkable so that they keep coming back – despite the lack of a physical store.

Staying Competitive

One of the biggest challenges for online retailers is staying competitive in a market that continues to get more and more crowded. Many of the factors mentioned above – including offering exceptional customer service, establishing multiple communication channels, maintaining free or cheap shipping and returns, and creating loyalty programs – can help online retailers stay competitive. However, in order to rise above the competition and truly shine, online retailers need to put in the extra work. One of the top ways this can be done is by analyzing customer data and doing proper research into competitors and the market. Look into what customers are buying, and decide where you can expand your product offerings. Truly listen to customer feedback, and implement changes based on what they are commenting on. Look at what services and products competitors are offering, and see what you can do to top it. These actions will help online retailers bring in new customers, maintain customer loyalty, and stay relevant in this competitive world.

Frequently Asked Questions About Challenges for Online Retailers