Like all sectors, the e-commerce industry faces a broad array of challenges. While some challenges are generic in nature, some are unique to the sector. Here are some of the major challenges faced by the e-commerce sector.
1. Cart Abandonment Rate
This problem is unique to the e-commerce sector. Did you know how many customers leave e-commerce sites before buying anything? If we go by research conducted by Baymard Institute, the number is a whopping 70 percent! Just imagine the sales an e-commerce company can make if seven out of every ten customers don’t just abandon their carts.
2. First Call Resolution Rate
When customers call e-commerce companies, they want the agent to resolve their issues or queries in the first call itself. If that doesn’t happen then it can hamper customer satisfaction. But how many e-commerce companies manage to provide the desired first-call resolution to their customers? For every Amazon or Zappos, e-commerce companies struggle to achieve the standard FCR rate of 75-80 percent.
3. Data Security
Are e-commerce companies susceptible to cyber-attacks and data breaches? Unfortunately, they are. As per the findings published in Threat Intelligence.com, more than half of e-commerce companies surveyed (54 percent) said that they had experienced at least one successful cyberattack, data leak, or instance of fraud.
4. Customer Turnover Rate
According to leading experts, the customer turnover rate in the e-commerce industry is about 20-30 percent. Compared to other sectors, the customer turnover rate is relatively high in the e-commerce sector. The high customer turnover rate is one of the major challenges for the e-commerce industry.
5. Personalized Customer Experience
In the retail and e-commerce sector, a majority of customers expect a personalized customer experience. As per Zendesk, more than three-quarters of respondents said they expect personalization. So, it is quite obvious that personalized customer experience results in greater customer satisfaction.
6. Agent Attrition Rate
The call center industry has one of the highest employee attrition rates. Call center agents quit due to various factors such as repetitive work, monotony, stress, health issues, lack of career advancement, and more. When it comes to the e-commerce sector, the employee attrition rate is relatively high compared to other sectors. Managing employee attrition rate in e-commerce call centers is extremely important.
7. Rising Competition
The e-commerce industry has been witnessing rising competition over the last few years. Even though a report released by Grand View Research projects the global e-commerce market to grow at a compounded annual growth rate of 18.9 percent between 2024 and 2030, all players in the industry will face cutthroat competition for market share. In such a situation, superior customer service can provide a competitive edge.
8. High CAC and Increasing Marketing Costs
Since the inception of the e-commerce industry, the marketing and advertising costs have always been on the higher side compared to many other sectors. But now it has risen by leaps and bounds. As per research, 85 percent of senior professionals in the industry are concerned about increasing marketing and advertising costs. It’s not surprising to note that when advertising costs go up, so does the cost of customer acquisition.
9. Cross-selling and Upselling Can Be Better
A study conducted by Forrester Research revealed that cross-selling and upselling account for 10-30 percent of revenues in the e-commerce industry. Although the number is not dismal, e-commerce companies can do a lot better. They have the advantage of a captive audience and they can optimize their platforms to target related and high-end products to their customers.
