In the dynamic world of e-commerce, maintaining long-term commitments with customers requires strategic foresight and accurate anticipation of e-commerce challenges. This foresight enables solution providers to deliver tailored products and services that meet the specific needs of e-commerce businesses.
Recognizing this, we at Solvd, Inc., in collaboration with Censuswide, a renowned global research company, conducted comprehensive industry research. Our findings unveiled critical insights into the pains, needs, and challenges that e-commerce companies face.
This article will explore the critical e-commerce challenges set to shape the industry’s future.
Technology-Related Challenges
The industry has seen quite a few technological breakthroughs in recent years, and many stakeholders in e-commerce are still trying to adapt to these changes. Adopting new tech has always posed many challenges in e-commerce, as it means spending a lot of time and money and doing significant operational shifts. Here are the most important tech-related e-commerce challenges our research revealed.
1. AI transformation
Adopting AI and ML technologies is inevitable for modern businesses. According to Forbes, the AI market is expected to reach $407 billion within the next three years, underscoring the necessity of AI transformation for businesses striving to remain competitive.
However, AI introduces significant changes, presenting one of the biggest challenges for e-commerce businesses by affecting operations at every level.
Firstly, integrating AI with existing IT infrastructure is complex and costly. It involves addressing potential compatibility issues, bridging skill gaps, and providing comprehensive training for all staff members, from C-level executives to frontline personnel.
Next, there are ROI concerns. The initial investment in AI technology can be substantial, and the returns are often only realized after some time, posing a financial risk for companies.
Additionally, there can be a disparity between customer expectations and the current capabilities of AI. Managing these expectations becomes a critical e-commerce challenge, ensuring that AI implementation meets or exceeds customers’ expectations.
2. AR/VR adoption
E-commerce customers expect a state-of-the-art user experience and can switch to competitors even after just one poor interaction. Brand managers must strive to deliver highly personalized experiences to retain and impress customers.
One of the innovative features that can be implemented is setting up virtual fitting rooms using augmented reality c to deliver a tailored experience. However, working with AR/VR tech requires additional skills, training, and expertise that e-commerce companies may not already have in-house. And, of course, the cost of such integration can be substantial.
3. IoT and Blockchain
Although IoT and blockchain technologies have existed for some time, their widespread adoption still needs to be improved. Many respondents cite challenges such as the high costs, complex infrastructure requirements for IoT, and the need for a solid regulatory and legal framework for blockchain.
Addressing Technological Challenges
Many of our e-commerce survey respondents expressed a preference for partnering with tech-specific partners to manage AI adoption and AR/VR implementations. They value the ability to scale development efforts up or down as needed and seek partners with a proven track record of successful projects. By collaborating with third-party solution providers, they can focus more on enhancing customer relations, ensuring a seamless and personalized shopping experience.
Personalized user experience done at a large scale is no longer an oxymoron; it’s a reality that can be achieved with solutions like Adobe Experience Cloud and Solvd’s experts.
Operational Challenges
These e-commerce challenges present various operational hurdles that online businesses must address. Key issues include managing external payment gateways, establishing clear return and refund policies, ensuring credit card acceptance, optimizing conversion rates, and more. Addressing these challenges is crucial, as purchase-related operations are fundamental to the e-commerce customer experience.
1. Performance-related challenges
Our research participants identified factors that significantly contributed to poor user experience and decreased conversion rates that led to serious e-commerce challenges. These include downtimes, load-related issues, payment system errors, and website product listing errors on the digital touch points. Addressing these issues is essential for maintaining a seamless and satisfactory customer experience.
2. Dependency on Third-Party Products
Many e-commerce businesses rely on outdated platforms that result in tight dependencies that make transitioning to newer systems challenging and costly. However, these older platforms often struggle to handle increased loads and the growing demand for new technologies, potentially hindering business growth and customer satisfaction.
3. Mobile Accessibility
According to Forbes, the share of e-commerce sales from mobile devices is expected to reach a staggering 70% in 2024. Providing a seamless mobile experience and making all services and products mobile-compatible has long been a priority for e-commerce projects. Today, however, it is absolutely essential to make the mobile user experience engaging and high-quality. Developing highly functional and user-friendly mobile solutions and ecosystems remains a significant challenge for e-commerce companies.
Addressing Operational Challenges
Our survey respondents named AWS the most desirable and satisfying e-commerce cloud provider. Assisted migration to AWS is a viable solution for most performance and high load-related challenges for e-commerce sites. Companies like Solvd can provide their partners with end-to-end technical solutions and can also help address various performance-related and accessibility-related e-commerce challenges.
Strategic Alignment Challenges
This type of challenge deals with how companies adapt to changes in consumer demand, shifts in the overall e-commerce landscape, and increasing pressure from various regulators and authorities.
1. Privacy and Security Demands
E-commerce products deal with large amounts of highly sensitive data: transaction information, personal data, user preferences, and behavior statistics. This data must be protected and managed with the utmost care. Transparency is crucial, as users must be fully informed about what data is collected, how it is used, and provided with opt-out options. Moreover, it’s essential to comply with many governmental policies, such as the GDPR in Europe and payment regulations. For global companies, an additional challenge arises from the need to adapt to the financial regulations of different regions, ensuring compliance while maintaining consistent service quality across diverse markets.
2. Customer Retention as Primary Focus
According to CXIndex, 90% of businesses state that customer experience is becoming their primary focus, regardless of the industry in which they operate. For e-commerce businesses, customer retention is a significant challenge. According to research, retaining existing customers is five times less expensive than acquiring new ones, but in a highly competitive sphere such as e-commerce, it is also a tough nut to crack. Companies face a seemingly impossible issue: delivering highly personalized user experience while simultaneously doing it at scale. Moreover, businesses still have limited resources, so they need to prioritize. When customer experience and retention become top priorities, they must decide what operational aspects they will delegate or cut down on.
3. Switching to New Delivery Models
As customer expectations become increasingly sophisticated, businesses are expanding their delivery channels. Adopting an omnichannel approach—where brands and customers interact across multiple touchpoints—offers a solution to many customer-related issues. However, this shift presents significant challenges for e-commerce, ranging from costs to the need for staff reskilling.
Addressing Strategic Alignment Challenges
Our research highlights several strategies companies can explore to tackle these e-commerce challenges. For instance, custom developing and implementing Governance, Risk, and Compliance (GRC) policies can address pressing privacy and security concerns effectively. As an Adobe Bronze Partner, we provide our e-commerce clients with comprehensive access to the extensive resources of Adobe Experience Cloud. This ecosystem supports omnichannel delivery and customer experience management. To meet the critical challenge of maintaining exceptional customer experience, companies can also leverage end-to-end software and development solutions from third-party vendors like Solvd.
Today, Privacy and Security issues are best addressed holistically by creating an integrated GRC ecosystem. This approach helps drive quick results, allows for real-time insights and analysis, and helps tackle security and privacy issues proactively.
Conclusion
E-commerce is a rapidly evolving and fiercely competitive field where businesses encounter significant challenges across all operational areas. Our research highlights various issues, from the need for swift, cost-effective workflows to adopting new technologies while maintaining a primary focus on user experience without overlooking other critical business aspects. Grasping these current challenges is essential for developing the best e-commerce solutions that will be required in the future. Here at Solvd, we are fully dedicated to collaborating with e-commerce enterprises to address these challenges directly and effectively.
You can download the White Paper to explore our research’s figures, numbers, and insights in-depth. This offers a detailed analysis of e-commerce challenges and trends, as well as conclusions and predictions made by professional experts.
