The main challenges of e-commerce in 2023 and how to overcome them

E-commerce is an inevitable development due to the speed of development of the Internet and technology.

However, the COVID-19 pandemic has further accelerated e-commerce growth. Store closures and movement restrictions have led to more online shopping than ever before. According to Statista, this growth will continue until 2022, and the market will reach $8.1 trillion by 2026, an increase of 56%.

This development also presents some of the biggest e-commerce challenges for brands and retailers. Customer behavior is constantly changing, new competitors are entering the market every day, and data privacy laws are becoming more complex.

For proactive brands and retailers, these challenges are opportunities to strengthen their position and expand their customer base. In this article, we’ll explore the biggest challenges the e-commerce industry will face in 2023 and how to overcome them.

Challenge 1: Escalating customer expectations

Technological advancements mean that brands and e-commerce store owners must keep up with an increasingly demanding customer base. Consumers want a personalized and engaging shopping experience that is simple and convenient. They want to be able to track their orders, buy across multiple channels and receive real-time updates on the status of their orders and deliveries.

To keep pace, small e-commerce businesses must anticipate consumer expectations and meet those expectations. The best way to achieve this is indirect research and direct communication. For example, post-sales surveys, social media monitoring, and direct communication with support teams are all ways to gather information about customer expectations and complaints.

Businesses must understand buyers’ biggest pain points and design solutions based on their feedback. Some of these solutions include:

  • Self-service options. Self-service may include chatbots on the website or mobile applications that answer questions or assist with order-related inquiries. With 24/7 support, customers can always ask questions and get quick answers.
  • Various shipping and pickup options. Customers have different needs when it comes to delivery options. Some people prefer in-store pickup, while others may want free overnight or next-day delivery.
  • Different payment methods. Not everyone likes using credit cards online. Some people prefer to use other online payment services or use cash on delivery.
  • Simple checkout process. When customers check out, they shouldn’t fill out many fields with their personal information every time. Instead, they should have the option to save information for faster purchases in the future.

Challenge 2: Competition from direct-to-consumer brands

Direct-to-consumer (D2C) brands sell products or services directly to customers rather than using resellers or distributors. These brands have been around for a while, but they’ve come to the forefront during the pandemic.

According to Smart Insights, the D2C e-commerce market grew significantly in 2020, reaching $111.54 billion. This increase is not surprising given the supply chain delays, order delays and in-person retail closures caused by the pandemic.

For example, the SaaS industry is growing the fastest among D2C companies. Thanks to an accessible subscription-based pricing model, even customers on a budget can get innovative software. By cutting out middlemen, D2C brands can offer quality products at lower prices.

Since most D2C brands have small marketing budgets, they develop innovative marketing strategies. Strategies like influencer marketing, content marketing, and personalization help attract new customers and keep them loyal in the long run. Some D2C brands create online communities where customers can actively shape product development roadmaps.

To shape this roadmap, brands can take the following steps:

  • Create a reliable online presence and product catalog.
  • Regularly produce high-quality content to reach your target audience through various channels.
  • Provide a seamless user and shopping experience.

These steps can help gather valuable insights into customer needs and provide products and services that meet those needs.

E-commerce sales continue to grow, so businesses must understand their unique challenges to improve their strategies and customer experience.

Challenge 3: Cross-border trade

Cross-border trade underscores the progress e-commerce has made over the past few years and offers retailers new opportunities to grow their businesses by tapping into previously inaccessible markets.

However, this growth has come at a price for some online retailers. Some challenges include:

  • Cross-border delivery. This can be challenging – especially if a third party handles shipping. E-commerce businesses operating internationally should consider having a network of local warehouses rather than a single central headquarters. While they’re not cheap, a network of warehouses can simplify shipping, reduce the risk of lost merchandise, and reduce costs.
  • language disability. Most e-commerce platforms only offer support in their native language, although players like Shopify and BigCommerce are improving this can cause delays in resolving issues, such as customer complaints. Merchants who want to benefit from cross-border trade must provide support in multiple languages. Investing in multilingual customer support can significantly increase customer satisfaction and boost sales.
  • currency. In some cross-border scenarios, currencies differ between countries, making price calculations more complex and expensive for retailers. Partnering with a payment processing provider that can support transactions in multiple currencies can help businesses conduct cross-border transactions and foreign currency transactions.

Challenge 4: Consistency across channels

Improving CX also means ensuring a consistent experience across all channels. Omnichannel experiences require brands to be present on a variety of platforms, as long as those channels are appropriate for the brand’s target consumers. More importantly, brands must provide a seamless experience across channels.

Consumers should be able to easily shop across channels without issues or inconsistencies in customer service, product availability, pricing, content, delivery options, and more. This requires brands to understand their target audience, their motivations and how they make decisions.

To create consistency across all channels, companies should ensure that the following points are consistent:

  • corporate story;
  • messaging;
  • products and services;
  • Appearance, including logo, typography, layout, etc.; and
  • Interact with customers through different touchpoints such as phone calls and live chat and through different communication tools such as email and social media.

Challenge Five: Data Security

Data security is one of the biggest challenges facing e-commerce and will continue to exist in 2023.

Businesses have put a lot of effort into developing data-driven e-commerce services. These services help brands with shipping, retail management and multi-channel approaches such as buy online, pickup in store and buy online, ship to store.

However, the amount of data that needs to be processed and stored is enormous—from customer profiles and purchase histories to website analytics and inventory management data. Furthermore, all this data must be protected from cyber attacks, data breaches, viruses, hacker attacks, etc. Addressing these data security concerns requires an IT infrastructure capable of handling large volumes of data to ensure its security and privacy.

For example, when choosing a payment processor, businesses should focus primarily on compliance with the Payment Card Industry Data Security Standard, the minimum level of security for processing online transactions.

Companies can also benefit from the expertise and support provided by payment service providers who provide the following services:

  • On-site penetration testing to fraud detection. This test minimizes the risk of sensitive data breaches and gives merchants and their customers peace of mind.
  • Encrypt sensitive data. As hackers get smarter and security breaches become more common, companies need strong encryption algorithms to protect customers’ personal data — especially when it’s transmitted over the internet.
  • Tokenization of payment credentials. While encrypted credit card information prevents unauthorized users from accessing it, tokenization renders the information useless if stolen—effectively reducing the risk of fraudulent charges.

bottom line

In 2023, the e-commerce industry will continue to grow. Due to its fast-paced nature and changing business environment, we can expect more challenges in 2023. Consumer behavior will continue to change, data security threats will continue to rise, and the lines between physical and digital shopping will continue to blur.

However, businesses that keep up with these trends will be able to seize the opportunity to increase revenue and boost sales.

About the author
Robert Brandl has always been passionate about web tools that make life easier. That’s why he founded Tooltester, where you’ll find reviews and tutorials of the world’s best website builders, e-commerce platforms, and web hosting services.

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