3 Challenges Facing Online Stores as Lockdown Measures EndShayna Wills
As cathartic and emotional as the easing of lockdown measures will be for people around the world, it will also present a whole host of new challenges.
An industry that has drawn significant attention and has experienced both the highs and lows of the pandemic is e-commerce. Although a sizeable number of e-commerce businesses are experiencing lower sales due to increased customer frugality, overall, the industry is thriving in response to the uptick in online ordering of everyday essentials and gifts. Even customers who hadn’t ever ordered online before the pandemic have made the switch with ease.
At a time when many countries are exploring ways to safely reopen, e-commerce finds itself at something of a crossroads. Will e-commerce merchants be able to stay competitive in the new climate?
Here are a couple of challenges that this industry is likely to face in the coming months:
The coronavirus pandemic has caused a unique saturation of the e-commerce marketplace.
Not only have a growing number of brick-and-mortar merchants recently taken their businesses online to maintain a revenue stream during the pandemic, but there are also more and more people who have had extra time to pursue alternative career options, side hustles, and passion projects—which in turn has led to more online storefronts opening up.
With the help of user-friendly e-commerce platforms as well as affiliate stores like Amazon and Etsy, launching one’s own e-commerce store has never been easier
Although some competition is a good thing, many existing e-commerce stores may find that they’ll need to change course to compete in this marketplace. The lag time means that many new stores will be hitting their stride or opening just as lockdown measures fully ease, and as a result, grabbing public attention as an existing online store is going to be a challenge. While many of these new stores will just be a temporary pursuit, some will be able to stick around for the long-haul due to their ability to offer exciting new products or explore innovative distribution methods such as drop shipping.
Standing out in such a saturated marketplace will largely depend on how well a store takes care of the basics. The cream will rise to the top in this new e-commerce environment, and stores that exude a sense of professionalism while making sure to cover the most important bases will be able to corral the largest customer bases.
Take fraud prevention, for example. By putting extra care into keeping your customers and their data safe, such as by integrating with a secure payment gateway and creating content that highlights your efforts to improve digital safety, you’ll be able to instill further confidence among your customers.
Many stores thrive off the idea of a competitive marketplace, but the dearth of cheaper and value-added online shopping alternatives could very well spell the end for numerous retailers during this difficult period.
Competition With Brick-And-Mortar
It’s not just the flurry of new online stores that could pose a threat to e-commerce businesses in the coming months, but the slow reopening of the rest of the economy.
Online stores that have experienced something of a boom since lockdown began may once again find themselves competing with retail brick-and mortar-stores as well as service and entertainment businesses that are likely to experience an influx in customer interest.
Even with social distancing measures in place, people will be excited about the prospect of shopping in person once again and may even feel encouraged to do so by their community or local government. Plus, brick-and-mortar stores offer people the opportunity to get products faster and increase their social interactions for the day—unlike with e-commerce shopping.
As mentioned, there’s also the pull of new experiences that will excite people the most and draw their attention (and finances) away from online shopping. For example, relaxed social distancing measures are starting to drive people to spend more time with loved ones or spend the day at a park or on the beach. At the same time, service-based merchants like bars and restaurants have already experienced a tremendous increase in visitors who have missed the dining out environment or bar scene.
Changing social distancing measures will be gradual, but each new step provides a new challenge for e-commerce businesses. It’s hard to capture the imagination of the public when they aren’t confined to their devices.
Financial Insecurity Among Consumers
On top of the tragic loss of life and hard months locked away from our loved ones, this pandemic has set the stage for unprecedented economic hardship for the vast majority of people.
Fortunately, there has been U.S. government support in the form of grants, mortgage payment freezes, and the furlough scheme—all of which have helped keep millions of families afloat. Unfortunately, though, in the face of extensive job losses, many have found themselves with almost nothing. As lockdown measures ease, so will these support mechanisms, and people may find themselves significantly poorer than they were prior to lockdown.
Don’t be surprised to see a new consensus emerge around saving. Being frugal with what little money one has will become the norm, and that leaves no room for frivolous online shopping. Even if your products are essential and of great quality, people may be discouraged from shopping with you due to their eye on saving and hesitation to pay shipping costs.
Plus, the threat of a second wave is always looming in the background, and many businesses are unsure whether they’ll have to re-close and begin lockdown measures all over again. With this uncertainty in mind, don’t expect people to exit their homes looking to spend, spend, spend just yet.
Running an e-commerce store has never been without challenge. It’s an ever-changing industry that was difficult for businesses to survive in even before the coronavirus. However, there is hope on the horizon. As online shopping becomes increasingly preferred by consumers, merchants should be aware that once the world recovers from the pandemic, the unique obstacles that e-commerce businesses are currently facing are likely to subside—and in fact, e-commerce could very well outpace brick-and-mortar.
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