Three challenges that ecommerce face and how to deal with them

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Profile picture for user Ángela de la Vieja

Ángela de la Vieja

The growth of electronic commerce continues to exceed all forecasts. In the portal specialized in studies Statista they already anticipate a huge growth of the sales in the electronic commerce in the whole world, which is anticipated to surpass the 1.3 trillions of dollars of 2014 to the 4.5 trillions of dollars in 2021.

But this growth and bonanza data do not mean that all ecommerce are permanent profit generating machines. All the actors in the universe of online sales face, to a greater or lesser extent, challenges that must be overcome in order to remain competitive, generate income and achieve profitability.

Price competition

All the marketing variables determine the way to compete, but the importance of the price in ecommerce is enormous. Many offer the same products from the same manufacturers at similar prices, which added to the ease of comparison that users have, make the competition very tough. And sometimes, it is decided only for a few cents...

The key to facing this challenge has two parts. First, you have to monitor the prices of the competition to understand the price positioning of each of the key rivals. Second, from the analysis of competitors, it is necessary to react with campaigns, offers or promotions in search of differentiation.

Rivalry with the manufacturer

Many manufacturers, increasingly, are launching their own online stores to sell directly to end customers. Their reasons are many: they want to avoid intermediaries, obtain higher margins, preserve the image of the brand, have direct knowledge of the client, etc.

This phenomenon of the manufacturer that sells online to the end customer is an unstoppable trend, especially since, in addition to the advantages perceived by the manufacturer, low entry barriers are also perceived. That is, it seems that any manufacturer can start selling online with almost assured success.

The key to an ecommerce is to seek strategic agreements with manufacturers, but not in terms of restrictions or rules of non-competition (which may be useful in the short term). An ecommerce can offer a strategic asset to the manufacturer: the purchase profile. This profile or pattern of consumption can become a negotiation variable, as is already the case in mobile telephony, where agreements between manufacturers and distributors are converted into products with a shared brand or exclusivity for early sale.

Returns and refunds

A survey conducted jointly by comScore and UPS (Pulse of the Online Shopper) for buyers in the United States reveals that more than 60% of consumers carefully check the return policy of an ecommerce before deciding a purchase. This clearly shows the importance for the customer of the ease in the returns.

The ecommerce are aware of the impact of a return. In addition to customer dissatisfaction, the cost of logistics can become a drag on the business, especially when the purchase is offered free of charge.

The golden rule to successfully face this challenge (and not put barriers to conversion) is to have a clear and transparent return policy.

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