Top Bottlenecks for E-commerce Growth
Blog: MattsenKumar Blog
20 years ago, it was tough to imagine that businesses will read millions of tweets and cater to thousands of customer calls daily. By putting customers at the helm of every process, the e-commerce industry has changed the way customers view themselves. Today customers are not only ready to pay more for a quality experience but are waiting to be dazzled by new things or experiences.
Challenges that E-commerce Players have addressed with Innovation
Even the most budding e-commerce store that runs on bootstrapped money is a change maker. Any business that adapts technology is a change-maker but the e-commerce industry is more about solving problems.
E-commerce stores have disrupted the retail industry. They have changed the way people acquire products/services and pay for them. By introducing multiple new and exciting features, online stores have made customers accustomed to benefits, they didn’t believe existed until they tried it.
A series of innovation and technological adoption has leveraged the E-commerce industry with the status of mass disruptors. From Amazon to Lenskart, every online store has improvised, acquired state-of-the-art technology and methodologies to create an exceptional customer experience hence the success.
Some of the Common Challenges E-commerce Industry Overcame
Reduction in fraud by customers: Sellers and marketplaces were having a tough time dealing with cases of fraud by customers. There were instances where customers order a genuine item from online stores and then replace it with fake or imitated products picked from the local market.
In the end, customers had both genuine products and their money refunded too. While delaying refund would have impacted the customer experience so the online stores decided to train delivery executives. By conducting training sessions for delivery executives, e-commerce stores turned return verification possible at the pick-up point. It solved the cases of fraud by customers with a good percentage. Both Amazon and Flipkart are planning to launch a similar campaign in India.
Top Bottlenecks for E-commerce Growth
Increased 3G/4G penetration in India, China, and Bangladesh has opened new doors for nascent e-commerce marketplaces. Today entrepreneurs from the remotest corners of India and China are running online stores quite effectively. The prominent e-commerce roadblock they face is cybersecurity challenges. A good number of threats is staring them into the eyes and often boggling their entire efforts in varied campaigns. Some of the top cybersecurity challenges include
Triangulation fraud: More like an advanced version of Phishing. To carry out a Triangulation Fraud, scammers create a fake storefront and record the credit card details. Then they place an order from the original store. Later recorded credit card detail is used by frauds to order items worth high ticket. Chargeback by the credit card owner, revenue loss due to products being shipped, and negative branding are some of the prime impacts of triangulation fraud.
Credit Card Frauds: Frauds often attack small websites only to steal credit card details. Later they use these cards for shopping on bigger websites. When accepting transactions online the liability of fraudulent transactions lies with the merchant. All transactions on e-commerce platforms are Card Not Present (CNP) transactions and are deemed less secure because the cardholder is not present with a card for cross-verification.
Fulfilling requisite compliances and establish a secure connection can help online stores avoid all such scams and duping events.
2. Cart Abandonment
Shopping cart abandonment is costing e-commerce players a lot of money. The increasing cost of customer acquisition goes waste when carts are abandoned. E-commerce players are willing to control the increasing abandonment rate and working on the factors. Once online stores have spent time finding out the reason why carts are abandoned, it gets easier to control it. Competitor benchmarking and customer journey mapping are two tools that e-commerce players can rely on for discovering factors leading to cart abandonment.
Controlling the cart abandonment rate is not a onetime exercise, it is a process that needs to be repeated for a specified period. Some of the fixes are long term and permanent; reverting these changes will impact the cart abandonment rate negatively.
Here’s a little insight into solving cart abandoned issues
Simplify Checkout Process: Everything on the Internet starts with a search, the journey from search to checkout involves many important steps like product discovery, research, comparison, and add to cart. It doesn’t make sense to lose a customer who has crossed multiple hurdles only to abandon the cart in the end.
Simplifying the checkout process is important because it can make or break the chances of a sale. With new customers the online stores need to be extra careful, asking them to create an account from scratch and fill in “first name, last name, email, and address” will kill the sale.
Bank upon Quality Catalog: E-commerce players can leverage the power of quality catalog to stop users from abandoning cart even when additional shipping charges are levied. When customers are influenced to stick with the product through quality and illustrative catalog, they willing to pay a higher price. A Statista study has proved that 84% of customers are willing to pay extra for quality customer experience.
3. Increasing Return Rates
The entire e-commerce system is made up of little entities like sellers, the marketplace, customers, suppliers, logistics, and customer support. It is a continuous cycle that relies on each other to make a product impact customer’s life positively. When products are returned they not only take away the opportunity of earning a profit but also devoid sellers and marketplaces of fund they initially invested.
Product return is a liability that takes money out of the e-commerce ecosystem. There are factors and elements, which when worked upon can turn this liability into an asset.
It is tough to estimate the actual loss of a marketplace since they just act a mediator between sellers and customers but here’s an estimation.
- Loss of commission charged on every sold item because the product was returned
- Loss of customer trust and negative impact on customer satisfaction score
- Increased complaints due to negligence of logistic partner while handling return shipment
- The failed opportunity of driving sales through returning customers and referral sales
Return rates can be reversed if stakeholders focus on reasons why returns occur. Here are a few reasons why customers return products
Low Quality or Misleading Images: 22% of all returns occur because the product looks different in real life, which is an issue that arises due to low-quality images. Low-quality images make it tough for customers to identify the correct product. Desperate sellers often use low-quality images to push their fake or imitated products. Such shady practices have led to marketplaces establish strict internal regulation for product images.
Misplaced Attribute Values: Attribute values are important because it helps online stores:
- With the proper categorization of products
- With sorting and offering better features to customers
- Assists with on-site search results
- Helps with the creation of theme-based bucketing
4. Customer Experience Management
Customer experience is no more a potential option but a must-do paradigm. By ignoring CX, e-commerce players can lose 86% of customers who are willing to pay extra for a quality experience. The growing importance of a quality experience is putting e-commerce stores under immense pressure to innovate or perish.
Omnichannel Experience: For a customer, omnichannel experience is made up of multiple individual touchpoints that converge at a point to help customers continue browsing from where they left irrespective of the platform they are currently on.
For organizations, omnichannel experience is a cross-channel content strategy that businesses use to meet users at the varied touchpoint. Omnichannel is one single route that allows organizations to assist customers at all steps of their journey.
For customer service agents, omnichannel offers them a bird-eye view of the customer journey. The bird-eye help agents identify the product or service the customer wants the help with. Designed innately, these bird-eye views assist agents to identify the channels a customer used for payment, raising queries, and receiving solutions.
In a hindsight, easiest ways of creating quality customer experience include
Faster Product Discovery: Product Discovery has an eminent role to play in increasing CTR and controlling return rates. When people can find relevant product fasters, they will make quick decisions and online stores will benefit.
When categories are clearly defined, both users and search engines can find products quite easily. By investing time in creating well-defined categories, online stores can save customer’s time and garner better results.
Through clearly established navigation between two pages, e-commerce stores can help customers decide between two products easily and buy the one that suits them best. Well-defined on-site navigation makes it easier for customers to visit pages like Home and Shopping Cart.
Multi-payment options: Amazon is passed that phase where it has to prove its worth. It is undoubtedly the first organization people think of at the mention of e-commerce. The organization is so popular because it understands the importance of customers and their journey. By facilitating a smoother on-site journey, Amazon is retaining customers and also gaining referral users. Amazon continues to offer an array of payment options to choose from like Credit card, Debit card, Wallets, and Cash on Delivery.
The E-commerce landscape is nascent but has a huge number of innovations in its satchel. From offering pay on delivery to allowing customers to try and return products almost instantly, the e-commerce sector has worked on every problem it faced.
While the ride has been full of breakthroughs but there’s a lot to do and accomplish. A set of challenges continues to pull e-commerce players down, focusing on them, and creating customer-centric products or processes can usher marketplaces towards greater success.