What Are The Major Challenges and Opportunities of E-commerce?
E-Commerce is the term used to describe the sale and purchase of various goods and services using electronic means. The Digital era has changed the traditional business approach; now, every business prefers to sell online to attract more customers and global reach.
Various Challenges of E-commerce are as Follows:
- Consumer Expectations: Consumers’ volatile behavior creates new challenges of e-commerce. Ever-changing likes, preferences, and interests make it difficult for ecommerce to make innovations and generate new ideas. For instance, you sell furniture; modern-day consumers demand customization in products; every other consumer would demand different colors, sizes, designs, and patterns. Ecommerce deals with mass consumers; it gets cumbersome to customize the same products for each customer.
- Shipping and Fulfillment: Due to competition among businesses, fulfillment is crucial for customer satisfaction and loyalty. When customers order a product from a domain, they want it to be shipped as fast as possible; delays and late shipping orders will cost you loyalty to your competitors. Additional shipping cost is another factor that adds to the problems of e-commerce. A consumer would not pay for extra shipping costs when buying beauty products online or any other without shipping charges from your competitors. Therefore, it’s vital for ecommerce to control their shipping and develop systems for fast and reliable shipping and fulfillment.
- Competition: Ecommerce has no boundaries; domestic, local, national, and global businesses across the globe have the same platforms to attract customers. Thus, making it the most significant problem of e-commerce – Competition. All businesses have their presence on the same social media and electronic platforms; it makes them transparent and open for customers to compare and choose from a wide range of services offered. To survive in this ever highly competitive and challenging environment is a massive task for e-commerce organizations. They are constantly on their toes to create more innovative, creative, interactive products to expand their consumer base and surpass their competitors.
Several Opportunities of e-commerce you need to know:
- Automation: Automation is the new trend in ecommerce. Hiring a large number of the workforce for small and straightforward tasks adds expenses for your e-business. Automating basic processes will help you reduce cost and workforce. The process will be easy to handle and maintain for you. Automation will also help you improve the customer experience. For instance, Chatbots understand customer queries and needs on your domain, help you reduce the cost of a customer service agent, and increase customer service as chatbots will answer consumer queries quickly.
- Social Media: Social media is the prospect of e-commerce to help ecommerce businesses on a large scale to attract customers. The social media platforms like Instagram, Facebook, Twitter allowed companies to have a global reach. Personalization has become a lot easier than before. There is always a scope to improve customer experience through social media. Every day new trends and social challenges help businesses gain a customer base with innovative and creative ideas. Social Media sites like Instagram are constantly providing tools and features for the benefits of ecommerce. You can get close to your customers, interact with them, understand their needs, and improve yourself. Some of the ideas to grab these opportunities for better prospect of e-commerce:
- Keep an Eye on Every Social Media Trend: follow trends and merge them with your brand vision or tagline to retain customers.
- Be Creative: think out of the box and develop new and witty ideas for everything happening around you.
- Appreciate your competitors to build a reputation.
- Viral content is the new marketing tactic.
- Customer Segmentation: Segmentation in e-commerce refers to the process of combining consumers with similar tastes, preferences. Consumer segmentation is one of the benefits of the consumer, in which you understand consumer behavior to target a specific audience; personalize consumer interaction and marketing. There are four types of consumer segmentation that help you develop a better understanding of your consumer and create innovative marketing campaigns:
- Demographic: refers to dividing your audience into people-based differences, including family, age, income, sex, occupation, marital status, occupation, etc. Organizing customers based on demographic segmentation will help narrow down the audience for you to target.
- Psychographic – this segmentation is similar to demographic; the only difference is they focus more on mental and emotional aspects. They categorize the audience in terms of beliefs, values, interests, likes, and dislikes.
- Geographic – As the name suggests, this type of segmentation divides the customer as per the local, national, and global location. This segmentation is beneficial for small businesses, who want to cater to the local audience. However, large ecommerce sites use this information to customize messages with local language and needs.
- Behavioral – this type of customer segmentation splits the audience on their behavior online; it may include; online purchase behavior, the benefits they are looking for, actions they perform on your domain, loyalty towards your company or that type of product, how often they look for that product. Behavioral segmentation is specifically used to create personalized messages like email marketing and customized content on your website.
Separating consumers on this basis is very useful to be specific to target your traffic. The consumers who live in the same area might not have the requirement of your product; splitting them with behavioral segmentation will narrow down your audience, thus helping you in marketing.
- Augmented reality: The gap between in-store experience and virtual shopping is one of the barriers of e-commerce; augmented reality can fill this. Consider, you can check how your clothing looks on you. Exciting, right! Providing in-store service to your customers would open doors of abundance for your business. Artificial intelligence and augmented reality use online data to offer virtual in-store experiences. E-Commerce giants like Amazon have developed a technology where customers can see how products look on them using mobile cameras.
- Data- one of the essential benefits of ecommerce is data. Data opens doors to various opportunities for ecommerce. Consumer behavior; tastes, interest, preferences, and buying behavior in the form of information is an asset of ecommerce. Analyzing and accurate assessment of data can be used to identify the precise customers for your business. Targeting the audience, exceptionally personalized for your business model, would boost sales and a high conversion rate. Collecting data provided by consumers online and offline will help you in the marketing process. If you know whom to advertise your products to, your time and cost would be reduced in the long run.