Finally emerging from the bleak cavern of 2020 will come as a huge relief to most people, businesses, and industries. While there’s no guarantee that the coming year will be markedly better (though there are reasons for cautious optimism), we’re all hoping for the best.
Most is an important modifier here. It’s a persistent truism that disastrous circumstances for some ultimately benefit others, and we’ve seen that borne out again this year — most significantly in the world of eCommerce. Even as industries relying on foot traffic have withered to the point of suffering fatal damage, online retail has boomed.
This isn’t the product of cynical exploitation. It’s the simple result of brick-and-mortar retail losing its viability and people being stuck at home with little to do but indulge in retail therapy. All the money that would otherwise have gone to malls and department stores (already diminished due to the rise of eCommerce) ended up barreling towards the internet.
Consider, though, that we’re talking about the success of an industry — not of all the stores and organizations that comprise it. Online retail in general will continue to make huge sums of money regardless of what happens with the COVID-19 pandemic, but that says little about the plight of the average online seller. In fact, many such entrepreneurs face a difficult 2021.
In this post, we’re going to look at the biggest challenges in eCommerce that all brands will face in the year ahead. Those that can overcome these challenges will be able to reap the rewards, while those unable to adapt will struggle to survive. Let’s get started.
The 4 Biggest Challenges in eCommerce in 2021
1. Standing Out in a Saturated Industry
When it became clear that offices would need to shut down and remote working would become the new standard, the consequences were calamitous. The best many people could hope for was being furloughed and paid until things got better — but things still aren’t better for plenty of companies. Take a look at the movie industry, for instance. Since traditional cinema setups simply aren’t viable in current circumstances, huge chains such as AMC are on the verge of bankruptcy and might go under this year, leaving many thousands of people unemployed.
This is relevant in the context of eCommerce because it’s the driving force behind a huge wave of entrepreneurialism. More and more people have decided to escape conventional employment due to its lack of job security: after all, feeling that you can rely on getting paid is one of the biggest reasons to work for someone else. When it’s become clear that your employer will breezily discard you if times get tough, the risk of self-employment seems less of a concern.
Ecommerce is one of the most accessible routes to making money online, as absolutely anyone can contact suppliers (or use dropshipping services) and get selling within days. It’s also competitive, and that’s unlikely to get better now that the dominance of online retail has been further solidified by the shuttering of brick-and-mortar stores. Look for any given product online and you’ll find countless stores offering similar experiences. This is a challenge for sellers.
Any eCommerce brand that wants to excel will need to do everything it can to stand out, and this will mostly come down to brand management. Every facet of online activity at a business level must be carefully controlled. That means pulling out all the stops. Here are some suggestions:
Embrace social media (but carefully). Regardless of how you feel about social media, there’s no denying the vital role it plays in making (or breaking) online brands. If you can interact with your target audience in a compelling and personable way, you can establish your brand as memorable and attract followers to whom you can later market.
Produce high-quality content. Content marketing is a reliably-effective way to get noticed, but only if the work is excellent. There’s so much free content around that bland posts will go unnoticed. Sellers should look for gaps in the market (search terms that others aren’t addressing) and find ways to be different, ideally through personality.
Jump on PR opportunities. Whether it’s through HARO schemes (HARO standing for Help A Reporter Out) or buzzing hashtags, it’s possible to get PR attention without putting in too much effort. Timing is everything. Keep an eye out for chances to weigh in on hot topics, and it’ll work to your benefit.
Run finely-honed ad campaigns. Proactivity is vital in eCommerce, and advertising is a consistent generator of leads — but you need to do it tactically to avoid wasting money. Instead of advertising to everyone, narrow your focus (Facebook Ads is ideal for this, offering keen targeting options), and pursue specific trackable metrics.
Diligently track brand awareness. Your initial strategy won’t get the results you want. That takes time and iteration: on a regular basis, you must review performance to figure out what’s working (and what isn’t). And if you’re not tracking brand awareness, you can’t know how things are going — so choose the right tool and get to work.
2. Choosing the Right Software Tools
An old adage states that a bad workman blames his tools, and there’s some truth to that — but it’s also true that you’ll get a lot more work done (and achieve superior results) if you make a concerted effort to select and invest in the right tools for what you’re doing. After all, despite having a simple premise, eCommerce is a hugely complex industry to participate in.
We already touched upon the actions necessary for managing a brand reputation and alluded to how a brand tracking tool can make the workload far easier to handle. Trying to track brand performance for your target audiences manually would take a lot of effort, soaking up time that would be far better used for more creative tasks. Getting a good software foundation is vital.
The challenge here lies in selecting the right tools, because there are so many out there. When you pick a tool to govern something like your social media activity, you empower and hamper yourself based on what it can do. If it’s highly powerful, it can take your social impact to the next level — but if it’s very limited then it’ll see you fall behind other sellers using better tools. And even though you can switch to an alternative fairly easily, you can’t get that time back, and you’ll inevitably need to go through a learning curve as you move from one system to another.
Even if you leave aside quality, there’s the matter of scope to consider, because some tools are designed for startups and others are geared towards enterprise operations. That applies all the way down to the eCommerce CMS being used. While it’s true that sellers with limited aspirations should use low-cost platforms that focus on basic features (Wix being a good example, with Wix website pricing being notably low — this review explains more), those aiming to grow their stores as much as possible really need to invest in more powerful platforms such as Shopify or Magento. The better the features, the better the resulting website.
To look at it another way, the SaaS industry is bigger than ever before, and automation gets more useful and accessible with each passing day. Any online seller not taking full advantage of the best software resources at their disposal will be unable to compete — and if you want to get the best tools, you need to put time into research and careful consideration.
3. Consistently Getting Pricing Right
One key consequence of the saturation of the eCommerce world is the narrowing of profit margins. Every company that wants to grab some easy attention will simply undercut its competitors, and when that keeps happening it inevitably leads to consumers getting used to those low prices and being unwilling to spend more.
You might look at the demand for certain electronic products in recent months and doubt this process, noting that next-generation consoles have gone up in price and even the venerable Nintendo Switch is in high demand — but this isn’t really a counterexample. Instead, it speaks to the fundamental divide between unique products and generic products.
Most sellers (and it’s a large majority) rely on the latter, often through dropshipping services. Such products have polished production costs, making it hard to produce them more cheaply, and are sold so broadly that it’s hard to be the cheapest. Due to this, pricing them correctly is a tricky undertaking: go too low and you lose profitability, but go too high and you lose sales.
Any business that can produce unique products will have a much easier time, simply scaling its pricing in accordance with demand and what people are clearly willing to pay. Those with generic products should look to dynamic pricing software that can monitor what other sellers are charging and adjust prices on the fly to keep them competitive.
4. Keeping Up With the UX of Bigger Brands
Lastly, just as people get used to lower prices for staple goods, they also get used to improved customer experiences. Once you’ve added something useful to the eCommerce process, it’s hard to take it out without people getting frustrated — and since the biggest brands in the world will have the most comprehensive UX designs, keeping up is a mission-critical concern.
One great example of a vital element is the now-common live chat system. Since people go to grips with using chatbots and typing their queries instead of calling support lines, they’ve become accustomed to the improved convenience. Anyone trying to operate solely using slower means of support (like support ticket systems) will drive away their target consumers.
Then there’s the matter of varied fulfillment options. The click-and-collect system was already in popular use before 2020 began, but it became even more important when brick-and-mortar retail slowed to a crawl. People increasingly wanted options beyond just having things delivered to their doors (which isn’t always convenient), and using drop-off points was the clear solution.
More than anything else, small online retailers will need to provide options in 2021, allowing their customers to customize their buying experiences. And since dominant retailers like Amazon have drop-off points and next-day delivery, any seller without unique products to give them an edge will need to avoid falling too far behind the curve.
Final Thoughts
While the results of 2020 provided hope to the eCommerce industry that it could make it through the pandemic mildly scathed, many eCommerce brands will face major challenges in 2021.
The four challenges we’ve set out here — standing out, making smart software choices, getting pricing right, and matching the service and features of top brands — are certainly intimidating, and there’s no easy way to succeed. To have a chance, you’ll need to set a sensible budget and put everything you have into your business. Find a way to provide your customers with what they need and you will have a fighting chance of pulling through.
Want to learn about an e-commerce brand that succeeds? Check out our Ali Exppress Brand Bite.
